Life insurance is the preferred savings product of the French. It consists of saving and making your capital grow for a fixed period or for your entire life for yourself or for one (or more) beneficiary(ies).
The sums thus invested are paid back to the subscriber at the end of the contract, or to his beneficiary in the event of the death of the insured, valued by an interest rate defined in the contract. Life insurance is therefore a good means of saving both for carrying out projects and for transmitting capital to loved ones. What is life insurance and does it also concern seniors
Life insurance is a contract by which an insurer undertakes to pay an annuity or capital to an insured or to one or more persons designated in advance, in return for the payment by the subscriber of sums of money, called premiums. The capital due at the end of the life insurance contract corresponds to the premiums paid revalued at an interest rate defined in the contract. These premiums can be paid all at once when the life insurance contract is opened, in the form of regular payments (monthly, quarterly or annual) or in the form of payments at free intervals.
The rate of remuneration for life insurance depends on the contract signed. It may be a contract in euros with which the funds paid are guaranteed and increased by the interest provided for in the contract or a unit-linked contract where the funds invested take the form of shares, bonds, units in undertakings for collective investment in transferable securities, etc.; the sums thus capitalized vary according in particular to the evolution of the stock markets and are therefore not guaranteed. In this type of contract, only the number of units of account is guaranteed. Or finally it can be a multi-support contract, that is to say composed of both investments in euros and investments in units of account.
Note: life insurance products are subject to social security contributions (CSG, CRDS, etc.).
Admittedly, the earlier a life insurance contract is concluded, the higher the capital paid out at the end of the contract. However, life insurance remains one of the most attractive investments, even for seniors who want to invest their money later. The returns from life insurance are indeed much higher than inflation and the investments are more profitable than traditional savings accounts.
On the other hand, the interest capitalized in the contract is exempt from tax for the entire duration of the life insurance contract. It is the same tax treatment, after eight years, for redemptions or withdrawals of sums of money invested in life insurance.
Saving and growing your money through a life insurance policy is also interesting in terms of inheritance law. No other investment offers this advantage. The sums paid to the spouse or PACS partner by the insurer on the death of the contract holder are in fact exempt from these inheritance taxes.
For other beneficiaries, inheritance tax varies according to the age of the insured when the premiums are paid. For the amount of premiums paid before age 70 and after the application of an allowance of 152,500 euros per beneficiary, the capital is taxed at 20% within the limit of 700,000 euros, then at 31.25%. For premiums paid after the policyholder turns 70, a one-time allowance of 30,500 euros applies regardless of the number of beneficiaries. For sums that exceed this ceiling, the life insurance capital is taken into account for the calculation of inheritance tax.
The advantage of life insurance is the immediate availability of funds. Even if before the eight years of the contract, taxation is not very favorable in the event of withdrawals of money, life insurance nevertheless makes it possible to release liquidities to finance a specific project such as for example moving into a house of retirement for seniors.
