There is a life insurance contract adapted to each profile
Consumers are looking for various formulas to make the investments profitable, but, with the fall of the Livret A and the PEL (Plan Epargne Logement), a deep disenchant has been established. As the rates of pay were no longer those expected, they decided to migrate to other contracts. Life insurance was therefore popular with 38 million people in 2018, for 1,700 billion in outstandings and 22.4 billion in collections in the same year. This statistic is enough to show us how enjoyable this placement turns out to be. However, it is not only necessary to deposit a few euros to automatically obtain a good profitability, you must of course establish a strategy worthy of the name able to meet your expectations. The choice will also be impacted by your needs and especially your profile.
For French people who want secure and available savings when they want, life insurance professionals will tend to direct them to the euro fund. Thanks to this functioning, it can be recovered at any time, this flexibility is thus widely appreciated even if the rate of remuneration is articulated around only 2%. Others prefer to invest for the long term, so they do not intend to dip into their account regularly. They will naturally turn to Euro-growth funds. This format is popular because risk taking is limited while performance is generally attractive.
As you will have understood, life insurance really has the power to adapt to your desires, especially if these revolve around risks. French people are not afraid to bet money without being convinced that they can benefit from the desired profitability. These markets are complex to master, only the experts manage to juggle all the subtleties. In this context, they will quickly turn to eurodynamic funds. It should be noted that this investment becomes attractive since the rate is high compared to that identified for other solutions such as the Livret A which has not stopped falling for several years. For these contracts, you will have the chance to hope for practically 3%, which remains very appreciable while the sector is busy and impacted by the falls.
There is a fourth solution for those who wish to choose life insurance. Managed multi-management is accentuated by taking risks fully assumed. You evolve without any net, you are therefore master of your destiny, because an error can quickly become problematic in terms of profitability. However, it is essential to note that the units of account have real power, they offer a very nice stock market dynamics over a relatively short period. Of course, these professionals must imperatively dwell on the quality / price ratio of these investments which are thus impacted by the ups and downs of the market.
Life insurance remains the most attractive investment in terms of profitability
While certain solutions such as the ELP kept falling in France, life insurance has always had the arguments to convince taxpayers and invite them to save. Several strong points can quickly be listed, because taxation has the distinction of being attractive. Contrary to popular belief, if you choose controlled contracts, the investment is secure since it is quite easy to anticipate increases as well as decreases in the market. Certainly, the most experienced French will have the leisure to enjoy more meticulous forecasts, but this savings turns out to be profitable even in 2018. Professionals tend to share some advice, because they believe that the remuneration can largely be up to par requirements if the taxpayer decides to multiply the contracts. So, by subscribing to several formulas, you juggle with all the subtleties, which gives you the means to quickly make your investments profitable.
Of course, the drop in borrowing rates in 2015 allowed the real estate sector to experience unprecedented success. As a result, the French neglected by the ELP or the Livret A have changed their operating mode by investing massively in stone, but many have chosen to place money again on these formulas, because they are attractive. As we said, it is possible to make withdrawals according to your needs and another strong point must be listed. The latter revolves around the transmission, you can select the beneficiaries of your choice such as friends, family members … This is done outside the estate in the event of death.
Life insurance: very advantageous taxation
In the event of total or partial redemption
You are planning to buy your life insurance policy, what is in store for you?
First of all, in certain cases the interest will be exempt from taxes: dismissal of the subscriber or his spouse (married or PACS) with registration at Pôle Emploi, same for early retirement, invalidity or cessation of an activity self-employed (judgment of compulsory liquidation) of one of the members of the couple.
With regard to social security contributions (around 15%), they are withheld at source in these cases, except if disabled.
In all other situations of a total or partial redemption, interest is subject to taxation according to 2 situations:
- Redemption before 8 years : the beneficiary can either integrate this amount into their taxable income, or be subject to a lump sum: 35% before 4 years, 15% between 4 and 8 years.
- Redemption after 8 years : the choice is the same and the flat-rate deduction is then 7.5%, relating to products acquired beyond 4,600 euros for one person (9,200 euros for a couple).
In the event of an annuity
Have you opted for a contract termination in the form of a life annuity? A percentage of this pension, depending on age, is subject to taxation (in addition to social security contributions):
- 70% if the annuitant is less than 50 years old;
- 50% if he is between 50 and 59 years old;
- 40% between 60 and 69 years old;
- 30% from 70 years old.
In the event of death
In the event of death, the annuity or the capital granted to your beneficiary does not enter into his estate. Life insurance products not subject to social security contributions during the contract will be subject to settlement (based on 15.5%). Its taxation (contract established after 20/11/1991 and premiums paid since 13/10/1998) will be calculated as follows:
Contributions paid before age 70: contracts less than 152,500 euros up to date of contribution before the 70th birthday, exempt from inheritance tax.
If the share of death benefit received by a beneficiary exceeds this amount, a deduction is due and amounts to:
- 20% of the beneficiary's taxable net share of 700,000 euros or less,
- 31.25% on the net taxable share beyond 700,000 euros.
Contributions paid after age 70: contracts less than 30,500 euros up to date of contribution after the 70th birthday, exempt from inheritance tax. The contracts signed since 20/11/991, exceeding 30,500 euros, the contributions of which were paid after the 70th birthday, call for the settlement of inheritance tax (depending on the degree of kinship) for the portion above 30,500 euros. Capitalized interest is not taxable. In addition, the contributions paid must be declared for the ISF.
Tax reduction on contribution in case of disability or survivor's pension
Finally, a tax reduction equal to 25% of the insurance contributions paid annually (with a limit of 1,525 euros + 300 euros per dependent child) is provided for life insurance contracts if:
- disability savings ensuring an annuity paid to the insured in the event of disability (without the possibility of normal professional activity) and according to a contract with a duration of at least 6 years;
- survivor's pension ensuring, in the event of death, a payment to a disabled child who is unable to carry out a professional or minor activity without the possibility of normal vocational training;
- surviving annuity subscribed in favor of a direct parent or to the 3rd degree;
- survivor's pension taken out in favor of a dependent, living under their roof, holder of a disability card, with or without family relationship.