A life insurance policy is a valuable financial tool designed for medium and long-term savings. Whether it's to finance your children's higher education, prepare for retirement, or secure a peaceful financial future, life insurance plays a key role. Additionally, it facilitates the transfer of your wealth to your beneficiaries while benefiting from a specific tax framework*.
A life insurance policy stands out for its flexibility. From the moment of subscription, it offers a wide range of investment options. You can choose secure investments, such as the euro fund, or opt for more dynamic unit-linked investments, like stocks. This flexibility is not limited to the subscription: you can make contributions, occasional or scheduled withdrawals, and redirect your savings at any time through arbitrages. This adaptability allows you to effectively respond to changes in your personal, professional, and financial situation.
While keeping your savings available, life insurance encourages a medium and long-term savings objective. After 8 years, a favourable tax regime* applies to the redeemed capital gains, with advantageous tax options. It is essential to note that these capital gains are subject to a reduced flat rate tax or income tax, depending on your choice. Moreover, after 8 years of holding the policy, an annual tax allowance of €4,600 for individuals and €9,200 for couples filing jointly further enhances this specific tax framework. Note: The policy's opening date determines the starting point for the holding period. Additional contributions, highly recommended throughout the policy's life, will not have to wait as long to reach tax maturity*.
Life insurance is not limited to savings management. It proves to be a valuable estate planning tool. The ability to freely choose your beneficiaries in the event of death enhances the flexibility of your policy. Depending on the timing of contributions, different tax allowances may apply*.
Your beneficiaries are subject to a new tax on premiums paid, with a reduced allowance shared among them on your investments after the age of 70 in the event of death. The tax base for life insurance contracts is based on the total premiums paid or the residual amount when the contract balance is below the sum of the premiums paid (in cases of capital losses or withdrawals)*.
If you are considering making payments after the age of 70, it is advisable to open at least two contracts, one of which, to the extent possible, should be intended for inheritance purposes and on which you plan not to make any withdrawals. Indeed, the uncertainties of life do not always allow us to keep savings for inheritance purposes, so a second contract designed for your occasional financial needs will help manage the tax base in the event of death.
The capitalisation policy is a distant cousin of life insurance. Like life insurance, it offers investment flexibility and a specific tax framework. Its unique feature lies in the ability to transfer the entire policy during your lifetime through a gift, which is not possible with a life insurance policy. The tax-free transfer of latent capital gains resets the tax counters to zero while maintaining the investment’s seniority. Your policy can also be transferred to your heirs upon your death, just like other movable or immovable property.
To fully benefit from the advantages of these policies, it is essential to subscribe as early as possible. Anticipating your savings decisions will help you build a larger savings pool, invested over a longer period to benefit from tax allowances and the security these products can offer. Do not hesitate to explore all the possibilities offered by your life insurance policy. Subscribe to a policy for each of your projects and make regular contributions to optimise your savings, secure your future, and ensure the financial protection of your loved ones.
