It is possible to open life insurance at any age. But it is important to be well organized, especially when the threshold of 70 is approaching. Indeed: from this age, the tax regime for life insurance changes. Decryption.
What is the maximum age to take out a life insurance policy?
Contrary to some popular belief, there is no maximum age to open life insurance. Young workers can take out a contract, just as much as seniors – more or less young. Life insurance remains a particularly effective tool for preparing a future succession. It is therefore natural that elderly savers favor this investment for organize the transmission of their heritage.
Note: if there is no legal maximum age to take out life insurance, it is possible that an insurer will limit the opening of contracts to savers under the age of 85. This is a recommendation from the French Insurance Federation (FFA). The latter asks its members to limit the membership of “elderly” clients.
After 70 years, is it worth taking out life insurance?
After 70 years, the sums paid into a life insurance contract do not benefit from the same favorable tax treatment as those paid before. The principle of an inheritance tax reduction for the beneficiaries of the contract is maintained, but it is limited to a total of 30,500 euros, for all beneficiaries and contracts combined. If the life insurance capital exceeds this limit, the balance is taxed as part of the inheritance.
Of course, once the threshold of 70 has passed, amounts paid before this milestone still benefit from the reduction of 152,500 euros per beneficiary. Previous placements are not impacted by crossing the 70th anniversary.
How to optimize payments as you approach 70?
After 70 years, the insured can cumulate an allowance of 152,500 euros per beneficiary (payments before age 70) and an allowance of 30,500 euros for all beneficiaries (payments after 70 years). This accumulation is important: in many cases of succession, the threshold of 70 years is therefore not a problem in itself.
But certain family situations mean that in the context of a significant succession, it is possible to optimize life insurance payments when the subscriber is about to turn 70. Before age 70, the interest of the subscriber is then to fund his existing contracts to reach the ceiling of 152,500 euros per beneficiary.
In addition to this advantageous tax aspect, life insurance remains after 70 years a preferred envelope. Even at an advanced age, the combination of funds in euros / units of account allows to obtain an excellent risk-return ratio, all savings products combined. And at the civil level, life insurance is an incomparable instrument, thanks to the freedom to choose the beneficiaries of your contract.