Child life insurance: choice, interest and underwriting

Why take out life insurance for a child?

Life insurance for a minor child is a long-term savings operation that has several advantages. It allows:

  • to feed the contract at its own pace and without any ceiling;
  • to obtain a more attractive return than the A-book in so far as the duration of the investment allows higher risks to be taken in order to obtain a much higher average annual return;
  • to benefit from advantageous taxation after 8 years of detention. Deduction of 4,600 euros or 9,200 euros (for a married or married couple) on capital gains realized.

This type of contract allows the placement of money received by donation (a child can receive 15 years up to 100,000 euros by the parent, and 31,865 euros from the grandfather, without tax) or the succession, don manuel, but also as gifts use offered by parents, grandparents, godfather, godmother or even friends.

>> Also read – Donation to grandchildren

Good to know : Opening a contract to a minor child allows you to date tax by fixing the starting point of the detention period.

Minimum age and subscription procedure

As a minor child does not have the capacity to be a contractor, the contract cannot be signed. It is therefore the parents’ responsibility to sign the contract on behalf of their child and to manage it until he or she reaches the age of majority. The procedure varies depending on the age of the child:

  • For a child under 12, the consent and signature of both parents are required.
  • For a child over 12 years old, the consent, signature of both parents and the consent of the child are required. In the case of parental authority exercised by a single parent or guardian, the consent of the guardianship judge is required.

Emancipated minors (from 16 years old) can sign and manage their contract on their own.

Good to know : In order to be able to keep an eye on the management of the contract that raised the funds of a donation, and thus avoid wasting it, the grandparents can attach the contract to a private pact that allows them to organize the „Administration of capital and in particular to block withdrawals up to a certain age (which may not exceed 25 years).

>> Our service – Test our Life Insurance comparator

What type of life insurance to choose?

Even though euro funds now have only an average annual return of 1.3% in 2020, it is still well above 0.5% of the A book. But we can get even better.

Privileges multisupports contracts

This return can be improved by introducing a higher or lower percentage of units of account which, over time, can yield significantly more and the risk of loss is not mitigated by the duration of the investment. The longer the placement, the more the possible losses on the units of account can be offset by an increase. Signing a multi-media contract with both a euro fund and units of account seems to be the best long-term solution.

However, it is advisable to take a minimum of caution when subscribing to the duration of the contract and to secure the capital invested in collective investment undertakings (Sicav, FCP) and others support sufficiently diversified market actions, monétaires et obligataires et sur of various economic and geographical sectors and dependent on management objectives.

Privileged contracts with minimum fees

To do this, you need to control the level of entry fees. Contracts sold on the Internet are generally not a step.

It is also necessary to choose the contracts with the lowest annual management fees and those that also allow free arbitrage and free management options (Stop loss, automatic saving of capital gains, etc.).

Good to know: if the contracts under the private management mandate are generally not within the reach of all the scholarships, and also in the free management no lack of time or competence is possible, choose a contract of management pilotée, in management profilée or à horizon. made it possible to trust the insurer or management company that it has mandated to manage its contract.

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