Common points to the capitalization and life insurance contract
The capitalization contract is very similar in form to the life insurance contract. Indeed, the sums paid to the capitalization contract can be allocated to different supports:
– funds in euros, low risk and therefore less profitable,
– Undertakings for Collective Investment in Transferable Securities (SICAV or FCP), which are more risky and therefore often more profitable.
The capital can therefore be totally or partially secured depending on the media chosen.
To note : as for life insurance contracts, the capitalization contract is subject to social security contributions, either each year or when funds are withdrawn.
The advantages of the capitalization contract
One of the main advantages of the capitalization contract is that it allows an optimization of the ISF. Indeed, only the sums paid to the contract are declared while the interest does not enter the tax calculation. The capitalization contract therefore makes it possible to increase its assets without the risk of seeing it affected by the ISF.
In addition, the contract is not terminated by the death of its holder: it therefore retains attractive tax precedence in terms of income tax. Last advantage, and not the least: it is possible to anticipate its transmission by making a donation of this contract.
To note : the funds placed on the capitalization contract remain available and can therefore be partially or totally recovered, (most of the time without charge).
The disadvantages of the capitalization contract
The main disadvantage of the capitalization contract is that, unlike life insurance contracts, the latter is taken into account in the calculation of inheritance tax. It is therefore less favorable in terms of the transmission of assets. In addition, depending on the media on which the capital is invested, the capitalization contract may be sensitive to the stock markets and lead to losses of capital.
Why take out a capitalization contract
The capitalization contract is intended above all for savers wishing to gradually build up assets, insofar as it is neither capped nor limited in time. This contract is particularly advantageous for individuals subject to ISF since all the capitalized interest does not enter into the calculation of this tax.
»Life insurance: what to do with your PEP
»Mandatory terms of the life insurance contract
»Life insurance: payment deadlines
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