Assurance Vie – The French prefer such a system, but how does it work? Life insurance is an accumulation product, an annuity product, and at the same time a powerful tax guarantee. Life insurance is an important product, but it is often misunderstood by the French and victims of prejudice. We will explain everything about how life insurance works. And if you want to go straight for a great life insurance policy, read our selection of the best life insurance policies.
Life insurance schemes suit the needs of almost every depositor. Especially since life insurance acts as a real “Swiss army knife” in investing. And you can invest at any age. The purpose of this article is to present life insurance from all angles.
Assurance Vie
Learn how life insurance works, its structure, features, very favorable tax treatment and many possible investment strategies.
Présentation Et Fonctionnement De L’assurance Vie
Life insurance is an important and extremely versatile product. Did you know that in addition to classic Euro funds, life insurance also allows you to invest in shares and real estate?
If you already have savings and want to consider more profitable long-term investments, how should you invest the money?
Your banking advisor (perhaps the bank you inherited from your parents or the one you joined for your mortgage) will definitely recommend investing in life insurance (AV), one of the most attractive tax niches in France. And he is not wrong! Life insurance is a great product that allows you to get a good return on your savings and not pay taxes on the interest earned.
It is the best savings product along with Equity Savings Plans (PEAs) for people who want to earn tax-free financial income (excluding the 17.2% social security contribution). However, unlike PEA, life insurance is not limited to stocks. There’s something for everyone in one life insurance policy, including guaranteed euro funds, shares and property.
Quel Régime Fiscal Pour Les Contrats D’assurance Vie Et De Capitalisation
Therefore, if you have the ability to save, your advisor is right to recommend life insurance. However, there is no need to rush. There are dozens of types of life insurance policies, and it’s unlikely that your advisor will be able to sell you the best one. So, take your time and do a little market research.
Choosing a good life insurance policy over a bad one can save you thousands of euros in the long run. But how to choose the right life insurance?
You already know what life insurance is and how it works, so you can compare.
The Eurofund is managed by an insurance company and mainly invests in European government bonds (eg French government bonds). More dynamic Euro funds also invest to some extent in shares and real estate.
Des Questions Sur L’assurance Vie ? Consultez Notre Guide
Eurofunds offer lower returns, but the principal amount is guaranteed. Thanks to the ratchet effect, your wealth will only grow every year. Find the best Euro funds here.
These are stock, bond, money market or real estate funds that allow you to grow your savings. Accounting units are exposed to the risk of capital loss. The risks are higher, but long-term gains are more likely. To learn more, we explain all about accounting units in this separate article.
Ludovic’s Note: The most common unit of measure is not necessarily the most efficient. For example, trackers are rarely offered as a unit of account in a contract, but they are a great stock investment product.
Make the distribution between supports yourself in the free management mode (you can invest 100% of the euro funds) or delegate it to your manager in the free management mode (account units increase or decrease depending on your profile).
Assurance Vie Et Succession
Note that you can “resolve” the contract during your lifetime. This means that you can sell a Eurofund and buy a CS, sell a CS and switch to a Eurofund (for example to lock in a profit) or switch from one CS to another. Therefore, life insurance is very flexible.
However, not all life insurance policies are the same. There are also contracts offering a wide range of units of account (equity funds, property funds, trackers, bonds, securities, etc.) and a good euro fund. And a very bad contract. That’s why you should choose your life insurance policy carefully (more on that later).
If you look at this diagram, it’s easy. At this point you should already have a good understanding of how life insurance works, but let’s continue. Then you will be invincible.
Life insurance is a popular savings product among the French. However, the product remains largely unknown and many prejudices about life insurance prevail. Therefore, it must be removed so that the product is properly absorbed and moves on. Here, we set the record straight on six common mistakes people make when it comes to life insurance.
Les Avantages Et Inconvénients De L’investissement En Assurance Vie En 2023
Your money is always available and you can partially or fully redeem (= withdraw money) whenever you want. Even after partial surrender, your life insurance policy will continue and you can continue to save money.
The famous eight-year period applies to more favorable taxation only after this anniversary. However, choose life insurance carefully, as transferability of life insurance is very limited or impossible.
That being said, it can be a huge advantage in probate as it can be passed on to your designated beneficiaries upon your death. You can transfer up to €152,500 per beneficiary tax-free. For example, a person with three children (or nephews or other beneficiaries of their choice) will not have to pay transfer tax on €456,000.
In fact, life insurance is considered “disinherited” and transfers outside common law are specifically allowed (friends, stepchildren, etc.), but be aware that customer-created beneficiary conditions are treated as confidential.
Meilleure Assurance Vie
Anyone can take out multiple life insurance policies, diversify available insurance companies/euro funds/accounts and benefit from a deposit guarantee of €70,000 per insurance company per customer. And there are no limits on payment.
Great contracts can be purchased from €100 at launch with no obligation to pay later. Self-proclaimed “luxury” life insurance policies that require high subscription fees (sometimes exceeding €100,000) are not necessarily the best option. Note that you can also purchase life insurance for the child from birth.
I often hear in the media that life insurance premiums are going down or up. This is ridiculous and shows that journalists do not understand this topic. The shortcut these journalists took was to reduce life insurance to Eurofunds.
Multi-benefit life insurance is not limited to funds in euros, but also includes investment funds (units of account). And these are funds whose performance (interest rates, profitability) increases or decreases.
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Therefore, the profitability of life insurance depends on what we invest in insurance and how we invest this envelope. It is not necessarily 100% Eurofund. There are also thousands of investment opportunities between a mutual fund and a mutual fund for the same life insurance policy, so performance will also vary.
If you do a redemption, you will only be taxed on the portion of the capital gain included in the redemption. And, as explained later in the article, a favorable tax regime is applied. Therefore, you do not need to declare anything unless you are withdrawing money from your life insurance policy.
Understanding how life insurance works also means understanding how to optimize life insurance taxes. By purchasing affordable life insurance today, you can use your savings faster and take advantage of tax benefits. Therefore, even if you do not currently have significant assets, do not wait to open a life insurance policy.
Capitalization Envelope: Life insurance gains are tax-free unless you surrender the life insurance policy.
Gérer Son Assurance Vie
First tax benefit: If you don’t withdraw money from your life insurance policy, you don’t need to declare it. In fact, if you cancel your life insurance policy, only the portion of capital gains included in the surrender will be taxable.
Therefore, the profit accumulates over time without any “tax friction”. This is why we talk about the capitalization envelope. This allows you to make more of your money available and take full advantage of compound interest.
In addition, there are other tax advantages when cashing out (partial or full redemption) and ultimately inheritance advantages. Let’s explain in detail.
Capital Gains Tax on Life Insurance: Income tax is exempt for 8 years after the purchase of life insurance.
Meilleurs Fonds Assurance Vie
The number of years of the contract is important, not the date of the amount invested in it. Therefore, it is important to open life insurance as soon as possible, even if you wait until the fourth (or even eighth) year.
In fact, if you redeem with a contract of more than 8 years, the amount including “interest” (the capital withdrawn is significantly greater) is less than €4,600 per person per year or the withdrawal is less than €9,200, tax free. In the case of a couple,
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