What is life insurance?
Life insurance is a contract that allows for diversification of wealth, notably through access to numerous investment options. It offers an opportunity to organize the transfer of assets within a favorable tax framework.
Definition and fundamental principle:
Life insurance is an insurance contract that allows the policyholder to build up capital over the medium or long term, while preparing the transfer of their wealth within a favorable tax framework.
This life insurance savings product offers the possibility to make premium payments that will be invested in various assets, with the objective of either building capital, receiving an annuity, or transferring assets to designated beneficiaries in the event of death.
The main objectives:
Life insurance serves to meet several key goals, combining savings, wealth transfer, and tax optimization.
Main Objectives | Description |
Medium- or long-term savings | Build up capital for future projects or retirement. |
Wealth transfer | Designate one or more beneficiaries to transfer capital outside of inheritance. |
Tax optimization | Benefit from attractive tax advantages during withdrawals or at the time of inheritance. |
Contract Operation:
Thanks to its flexibility, life insurance adapts to your subscription choices, payments, and investment options to best meet your wealth management objectives.
Subscription and Payments
- Subscription can be individual or joint (depending on the marital regime).
- Payments can be made freely or on a scheduled basis according to the subscriber’s needs and saving capacity.
Investment Options
- Euro funds: a secure life insurance investment with guaranteed capital. The life insurance rate is generally low but stable and set annually by the insurer.
- Unit-linked funds: various options (equities, bonds, real estate, structured products) offering higher return potential but without capital guarantee. These funds are subject to financial market fluctuations.
Contract Duration
- Flexible duration, with the possibility of partial or full withdrawal at any time.
- Recommended investment horizon of 8 years to optimize life insurance taxation and fully benefit from tax allowances.
Advantages of life insurance
This solution combines major benefits in terms of taxation, flexibility, and investment choices, thereby offering a privileged framework to grow and transfer your wealth.
Advantages of Life Insurance | Description |
Favorable Taxation | In case of withdrawal: annual allowance on the gains realized, reducing taxation. In case of death: partial or total exemption from inheritance tax within certain limits, facilitating wealth transfer. |
Flexibility | Possibility of partial or full withdrawals at any time, offering high liquidity. Personalized capital transfer through the beneficiary clause, which allows precise designation of beneficiaries.
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Diversity of Investment Options | Access to a wide range of investment options tailored to the subscriber’s risk profile and objectives, enabling a balance between security and return. |
Specific Use Cases
Life insurance adapts to different life situations, offering concrete solutions to prepare for retirement, organize wealth transfer, and ensure your family’s financial security.
- Retirement Preparation: Using life insurance as a supplementary income through scheduled withdrawals or an annuity.
- Wealth Transfer: Designation of specific beneficiaries to transfer capital outside of inheritance, benefiting from favorable taxation.
- Family Protection: Payment of a death benefit to designated beneficiaries, ensuring financial protection in the event of the insured’s passing.
Associated Risks
Like any investment, life insurance carries certain risks that it is important to understand in order to make informed decisions adapted to your profile.
Associated Risks | Description |
Capital Loss Risk | Related to unit-linked funds that do not guarantee the invested capital. |
Liquidity Risk | Withdrawals before 8 years may result in less favorable taxation. |
Market Risk | Fluctuations in financial markets can impact the value of unit-linked funds. |
Glossary
Term | Définition |
Euro Funds | Investment option securing the capital with an interest rate that is generally low but guaranteed. |
Unit-Linked Funds | Investment options without capital guarantee, exposed to financial market fluctuations. |
Beneficiary Clause | Provision allowing the designation of one or more persons who will receive the capital in the event of the insured’s death. |
Withdrawal | Partial or total withdrawal of the amounts invested in the life insurance contract. |
Regular wealth assessments are essential to adapt your financial strategy to life changes, seize new opportunities, and...
