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Wealth Insurance


Wealth insurance: savings and retirement

Aims and benefits

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    Your dedicated adviser will guide you on

     Risk analysis

     Placement strategy

     Advice if you need to make a claim

     Market intelligence

What do you want to achieve?

Wealth insurance allows you to build up a capital reserve over the long term. When the policy ends, the capital they have built up (known as the redemption value) is repaid to the policyholder in full.

Wealth insurance can also be used to supplement your income, for example when you retire and your income level is set to fall.

The current compulsory distribution-based pension system aims to pay a pension that is equivalent to 60% of the person’s final salary.

The increase in life expectancy will create significant difficulties for this system, since there will be a growing number of pensioners receiving their pensions for longer. At the same time,

there will not be enough people of working age to fund the costs of pensions through their contributions.

As a result, organizations will need either to increase the contributions paid by working people, or reduce the level of pension payments.

Supplementing your income with “capital” savings is therefore an essential precaution you should take, and as soon as possible. Wealth insurance is the most efficient way of saving if this is your goal.

Withdrawals can be made regularly or on an ad hoc basis. Some policies may also offer an annuity.

Wealth insurance is an excellent tool for transferring assets, thanks to an advantageous tax regime and a lot of freedom in the choice of beneficiaries.

When the policy is taken out, the beneficiary clause stipulates who will receive the capital if the insured person or policyholder dies.

A standard formula is offered (“to their spouse or failing this, their existing or future children, living or represented, or failing this, their heirs”) but it is also possible to choose the person you would like, or name several beneficiaries, even outside your own family, within the limitations of the law (for example, it is not possible to disinherit your children entirely or transfer an excessive share of your assets through life insurance).

The beneficiary clause can be amended at any time, provided the named beneficiary has not sent their acceptance of the clause to the company.

Wealth insurance is a medium- and long-term savings product.

Wealth insurance can be used to save and grow your capital, for yourself or your family. The capital remains accessible throughout the life of the policy.

It is important not to confuse this with term insurance: this guarantees the payment of a capital sum to their beneficiaries when the policyholder dies, but the premiums paid are unrecoverable.


Advantages for the policyholder:

The tax situation is more advantageous after you have held the policy for eight years. That’s why it is beneficial to take out a policy, even if you are only able to save a small amount. The aim is to “save the date”. The policy can be funded later on.

There is no tax to pay unless you make a withdrawal.

If you do make a withdrawal, tax will be payable on the portion that corresponds to the capital gain you have made, except in certain circumstances (such as redundancy), depending on how long you have held the policy for and whether you have chosen the withholding tax (PFL) or marginal tax (TMI) option.

Before the policy is eight years old:

PFL rate:

  • 35% if you make a withdrawal before the policy is four years old.
  • 15% if you make a withdrawal after four years but before the policy is eight years old
    If the TMI rate is lower than the PFL rate, this will be the better option.

Once the policy is eight years old:

  •  The tax position is more favorable.
  •  The PFL rate is reduced to 7.5% but the withdrawal benefits from an annual capital gains allowance of €4,600 for a single person or €9,200 for a married couple.

Different rules apply, depending on the type of investment mechanism.

For funds in euros, whether they have been taken out based on a single or (since 2011) multiple underlying investment mechanisms, they are deducted annually based on the level of capital gain.

For other mechanisms, based on units of account, social security deductions are taken when a withdrawal is made or the policy is terminated, notably when the policyholder dies.

The overall level of social security deductions is currently 17.2%, following an increase of 1.7% on January 1, 2018.

However, there are still some specific policies known as “deferred profits” policies, which make it possible to make withdrawals before the policy is eight years old, without any tax or social security deductions. The capital gain is deferred until the policy is over eight years old and therefore benefits from a lower rate and the annual allowance.

The capital invested in a wealth insurance policy is an integral part of your assets and is therefore included in the calculation of the amount of solidarity wealth tax (ISF) payable.

Some specific policies also allow the capital invested not to be included in the calculation of ISF.

If the beneficiary of the policy is a spouse or civil partner under a PACS, no inheritance tax is payable on the capital they will receive when the policyholder dies.

The tax treatment for the other beneficiaries depends on the age of the policyholder when the premiums were paid:

For sums paid before the policyholder was 70:

After applying an allowance of €152,500 per beneficiary, the capital has been taxed at 20% up to €700,000 and then at 31.25% (i.e. above €852,500) since July 1, 2014.

Note that capital transfers are not included in the deceased person’s estate.

For sums paid after the policyholder was 70:

A single allowance of €30,500 applies, regardless of the number of beneficiaries.

Above this amount, the capital paid is reincorporated into the deceased person’s estate.

Capitalized interest, however, is exempt.

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