What are the benefits of taking out life insurance?

According to the Ministry of Economy, one of the French people’s favorite investments is life insurance. Practice for financing projects, preparing for retirement or ensuring the patrimony of children, this last presentation has many advantages.

Thinking about his death is never easy or pleasant. Life insurance is usually related to this morbid idea, but it goes far beyond that. Une assurance vie is an investment that has many advantages, as well as in terms of security for the assets of a patrimony in terms of taxation. Hence the interest in turning to this option, if it suits your needs.

What is life insurance?

To understand what life insurance is for, one must first understand the principle on which it is based. This type of insurance is in fact a contract by which the insurer undertakes to pay an annuity or capital to the insured or his beneficiaries. To open a contract, it all starts with an initial verse, which can then be completely complete to your liking. These amounts are then invested by your insurer, either in risk-free products that guarantee interest (as part of a one-off contract) or in exchange-related products (as part of a multi-support contract), way to make money.

Life insurance can be used as a medium- or long-term savings product: you can withdraw or close it at any time. There is no age to take out life insurance.

Life insurance is not part of the estate

Contrary to the “classical” inheritance, which is governed by French inheritance law and which indicates that it is forbidden to disinherit one’s children, life insurance is paid out of inheritance, which means that it will not be taken into account. in the calculation of inheritance. It also means that you can choose whether or not you want to receive benefits when you need family members.

The beneficiaries will be mentioned in the clause of the beneficiary of the contract, which will have to be precise in their nature rights, to the share of the capital returning to each when there are several, as well as to the fees and conditions established by the subscriber.

The strengths of life insurance during an inheritance

This type of contract allows you to get interest easily, and therefore makes your money fruitful. But as part of a legacy, it is above all an excellent tool for the transmission of wealth, especially from a tax point of view. As the Ministry of Economy’s website states: “If the beneficiary of your contract is your spouse or PACS partner, you will not be liable for any inheritance tax.”

For the other beneficiaries (children, siblings …), there are two possible types of tax treatment:

For the most paid before 70 years: upon request for a reduction of EUR 152 500 by the beneficiary, the capital shall be charged at 20% for each beneficiary.

For the best paid after 70 years: a one-off rebate of € 30,500 applies regardless of the number of beneficiaries. Beyond that, the paid-in capital is reintegrated into the estate assets (i.e. the “classic” inheritance). However, capitalized interest is exempt.

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