Appreciated for its flexibility, life insurance allows you to save for your personal projects but also to support the people of your choice upon your death thanks to the beneficiary clause.
What happens when you die?
outside of the estate
Life insurance is a product that allows you to pass on your assets insofar as this capital is excluded from the estate. By not being counted in the assets, it escapes potential creditors. Similarly, this money is not included in the calculation of the hereditary reserve, which requires bequeathing most of one's property to one's children or, failing that, to one's surviving spouse. Enough to leave considerable leeway to financially support other members of his family, or even outsiders.
The only limit: do not be too generous.
In order to prevent the spoliation of the forced heirs, the law provides that the life insurance contract may be reinstated in the estate by a judge if he considers that the premiums paid are manifestly excessive in view of the overall heritage.
Similarly, if this investment was subscribed to at a very advanced age, the sums concerned may be reclassified as an indirect donation and integrated again into the estate.
The right tax plan
If the legislation intends to prevent the immediate family from being disinherited through life insurance, there are also tax issues in the balance. Indeed, the other great advantage of this contract is to transmit a capital to his relatives without them having to pay the inheritance costs. Not everyone is in the same boat, however.
Your beneficiary will receive this money without having to pay any tax, as long as the premiums have been paid into the contract before October 13, 1998. Payments made after this date as well as the interest generated are also exempt from tax up to 152,500 euros , before being taxed at 20% up to 700,000 euros, then 31.25% for the fraction exceeding this threshold. By way of comparison, the allowance is limited to 100,000 euros per child in terms of inheritance tax, 15,932 euros for a brother or sister and 1,594 euros for a grandchild. The taxation of life insurance is therefore much more advantageous.
This is also the reason why the legislation has added an age limit to contracts opened since November 20, 1991. Therefore, the rules mentioned only apply to payments made before the subscriber turns 70.
If more than 30,500 euros have been invested in life insurance after this age, the excess will be subject to inheritance tax.
Another element: if the beneficiary is your spouse or your Pacs partner, he will escape any taxation.
Pay attention to the beneficiary clause
The French therefore have every interest in using life insurance to organize the transmission of their assets.
But be careful to write the beneficiary clause well so that the latter can be easily found and to designate several people in case some of them die in the meantime.
It is also wise to warn the interested parties or at least to inform your notary of the existence of the contract so that the capital can be given to the rightful person when the time comes.
Remember that several billion euros of dormant life insurance have still not been returned in France, despite the fact that insurers have a legal obligation to find the beneficiaries.
How to get your capital?
If you have been named in the policy of a recently deceased relative, you do not need to wait for the life insurer to contact you.
You can assert your rights directly with him.
You will need to provide proof of your identity, as well as a death certificate.
The process will of course be facilitated if you already know the number of the contract subscribed.
Once the documents have been provided, the company has 15 days to ask you for additional information.
Once the file is complete, it must then pay you the capital due, less any taxes and management fees, within one month.
In case of delay, the insurer will have to add additional interest calculated from the legal rate as penalties.
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Think you're the beneficiary of unsettled life insurance?
You have ten years from the death to enter the official association Agira, online or by mail, so that it finds the contract.
If the death is older, you can search via the Ciclade.caissedesdepots.fr service.
Succession
Life insurance
Economy
Saving
Taxation
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