Macron tax reform or not, 90% of life insurance contracts are dusting at the bottom of the drawers. Big mistake! To be well managed, life insurance must be regularly monitored. Now is the time to review your contracts and make decisions.
Adjust the composition of your contract
In a turbulent economic environment, driven by increasingly short economic cycles, passive management of your savings is no longer suitable. In addition, your risk aversion and your wealth objectives are no longer the same as at the time of subscription.
Take stock – at least every six months – of the financial composition of your contract. And make adjustments if necessary. The most modern contracts allow arbitrations to be carried out in just a few days. Take the opportunity to have life insurance in perfect harmony with your investor profile.
Update your beneficiary clauses
A life insurance contract involves special attention to the transmission of the sums invested. The designation of the beneficiary (ies) of the capital on the day of the insured's death is an essential choice both in substance (choose the beneficiaries) and in form (write the beneficiary clause).
The drafting of the beneficiary clause must be deepened from the outset but above all updated regularly – at least once a year – because problems very often arise from a lack of follow-up of the clause.
This precaution will ensure that the planned arrangements remain adapted to your situation and take into account changes in the legal and fiscal environment.
Build up little taxed income
Contrary to popular belief, a life insurance contract is a liquid investment and perfectly suited to building additional income.
To do this, you need to make withdrawals, which insurers call “buybacks”. Fiscally the impact is very limited because only the gains contained in the withdrawal are taxed. By default, they are subject to the graduated income tax scale.
You can opt for a flat-rate withholding tax (35% between zero and four years, 15% between four and eight years and 7.5% beyond). In addition, after eight years, withdrawals benefit from an annual deduction on earnings of 4,600 euros for a single person and 9,200 euros for a couple. Take advantage of this for the end of the year.
Make payments, even after 70
Life insurance is an envelope that is perfectly suited to building up capital for the realization of a family or heritage project.
In a logic of succession, it also has many advantages. Reminder: after 70 years, only the premiums paid include the estate assets after an overall allowance of 30,500 euros.
To fully benefit from it, do not limit the amount of payments and start as soon as possible.
The contract will thus have a significant exempt capital gain potential which, in certain cases, will allow a very significant reduction in the tax base in the estate. And for more convenience, make your payments on a new life contract.