Life insurance

Life insurance is not a bank account: it is a contract where the insurer commits to paying a capital sum or an annuity. You are most often the policyholder (you pay the premiums), the insured (your life is the trigger), and the beneficiary during your lifetime. Three types of contracts exist: survival (restitutes the accumulated savings), death (protects your loved ones), and mixed (the most common, combining savings during your lifetime and protection for your beneficiaries).

The contract acts as a wrapper for several assets, which you can mix freely.

• The euro fund: the invested capital is guaranteed by the insurer and the interest credited each year is permanently acquired.
• Unit-linked funds: invested in financial markets or real estate, they offer higher potential returns in exchange for a risk of capital loss.
• The allocation between the two can be managed over time through rebalancing as your horizon approaches.

In self-managed mode, you choose your own assets and their weighting. In professionally managed mode, a manager allocates your savings according to your profile (prudent, balanced, or dynamic) and gradually adjusts the allocation as your horizon nears. In both cases, your situation, financial knowledge, and risk tolerance are assessed before subscription: this is the duty of advice regulated by the Insurance Distribution Directive (IDD) and MiFID II, which ensures the suitability of the contract and allocation to your profile.

Nothing is set in stone: you can fund your contract as you wish, pause and resume payments, rebalance between assets, and recover all or part of your capital through a partial surrender without closing the contract. Taxation only applies to effectively withdrawn gains, allowing the capital to grow as long as you do not request a surrender.

• Initial deposit upon opening, followed by flexible or scheduled payments
• Rebalancing between assets to readjust the allocation
• Partial surrenders without contract closure, full surrender to terminate it
• No justification for the use of funds required upon withdrawal

Gains are taxed at the time of surrender, depending on the age of the contract. Before eight years, they are subject to a 30% flat tax (12.8% income tax and 17.2% social contributions). After eight years, they benefit from an annual allowance of €4,600 for a single person, €9,200 for a couple subject to joint taxation, and then a 7.5% rate when premiums paid are under €150,000, or 12.8% beyond that. Opting for the progressive income tax scale remains possible if more favorable.

The beneficiary clause is one of the major benefits of the contract: you freely designate the person(s) who will receive the capital in the event of death, as well as a secondary beneficiary to replace them if necessary. Premiums paid before age 70 are transferred outside the estate up to €152,500 per designated beneficiary; after age 70, the global allowance is €30,500 and the gains remain subject to inheritance tax. This clause can be revised at any time: birth, marriage, divorce, or changes in your beneficiaries' situations.

Not all contracts are equal: fees on deposits, annual contract and fund management fees, rebalancing fees, potential surrender charges, and in managed accounts, management mandate fees. As a guideline, annual management fees are around 0.50% to 1% for unit-linked funds and 0.60% to 0.90% for euro funds, with the latter's performance communicated net of these fees. These costs reduce your net return: they should be assessed over the holding period and are stated in the Key Information Document.

Before signing, you receive the Key Information Document (nature of the product, risks, expected return, costs) and the contract notice, along with a withdrawal form template. You then complete an insurance proposal, or subscription form, along with the knowledge and suitability questionnaire. The documents required are simple: a valid ID, proof of address less than three months old, bank details (RIB), and depending on the amount invested, proof of the origin of funds. The contract takes effect after the initial deposit is processed, and you have 30 calendar days to withdraw. A false declaration can lead to the nullity of the contract.