“I want L’Oréal, LVMH or Air Liquide in my contract.” This is what some life insurance holders ask their financial advisor. “There is often, at the start, an emotional dimension linked to a particular company, especially among those who have had successful careers there,” notes Stellane Cohen, president of the online broker Altaprofits, a pioneer in the field with its product Titles@Life. The latter accommodates on average 10 to 15% of direct shares, most often in the securities of reassuring companies – large capitalizations, with a solid stock market performance – which are then held for several years, even decades.
“Most of the time, savers limit themselves to two or three shares in companies that make you dream, and this almost never exceeds 20% of the capital invested, confirms Emmanuel Narrat, director and founder of the Haussmann Patrimoine firm. They also seek to understand what they are investing in, which is difficult to identify in funds.”
Concretely, individuals opting for freely managed life insurance, over which they keep control, can choose, in addition to traditional funds, to purchase shares directly. Small subtlety to know in relation to a securities account or a stock savings plan (PEA): it is the insurer who acquires the securities for you.
This has three consequences. First of all, you will have to pay costs to pay this intermediary. Then, you will not be able to trade the security at a specific price since the insurer will buy or sell at the end of the day, at the closing price. And finally, you will not have the right to vote at the general meeting. So why go there, especially since the PEA is a more agile, less expensive and just as attractive from a tax perspective? “It is very effective for clients who have reached the payment limit of their PEA at 150,000 euros and who are seeking to prepare their succession,” responds Guillaume Lucchini, founding president of the independent firm Scala Patrimoine.
Talk to future beneficiaries
In fact, shares included in life insurance can be transferred upon death, without inheritance fees, up to 152,500 euros per beneficiary. To do this, you must have made your payments before age 70. But, even beyond that, the system remains interesting because capital gains remain exempt. “With a life expectancy, and therefore detention, of another fifteen to twenty years, this remains very attractive,” underlines Stellane Cohen. Be careful, however, to make it clear to your insurer, when you declare your beneficiaries, that they can inherit the shares. In fact, insurers almost always prefer to pay in euros the value of securities valued at the time of death, which can do a lot of damage if the period is unfavorable on the markets. It is also better to talk to your beneficiaries in advance in order to preserve any capital gains by selling the securities at the right time.
To implement this type of strategy, you must choose your contract carefully. Few general public life insurance companies offer this possibility and you obviously need to find out more. If applicable, the portfolio of stocks available varies greatly. “We only offer this option to CAC 40 companies,” underlines Xavier Prin, marketing and communications director at Boursorama. At Altaprofits, the choice extends from the CAC 40 to the EuroStoxx 50, including the SBF 120.
Some contracts such as Placement-direct Vie, Lucya Cardif, Linxea Spirit 2 or Netlife also include some securities listed in the United States. “Finally, there remains the possibility of Luxembourg contracts, which make it possible to open a dedicated internal fund, a sort of encapsulated securities account,” explains Guillaume Lucchini. Enough to access a considerable choice of titles. But this option is not open to all budgets since it often requires a minimum of 250,000 euros to subscribe. In all cases, be careful of fees, as the pricing of direct titles is often increased. Make sure the game is worth it.
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