With rising interest rates, solid returns in 2023 and a very promising start to 2024, the sky is clearing for savers. A flexible tool with preferential taxation, life insurance is once again becoming attractive and the safest of banking investments. However, in a context of inflation, diversification remains the wisest course. Identify your needs, identify the different products available, negotiate your contract, go through a management company, monitor costs, generate long-term performance: L’Express guides you.
The most versatile banking product
Of all financial investments, life insurance is undoubtedly the most versatile. Its success with households – 40% of them have one or more contracts – lies in the following triptych. First point, its operating flexibility, which gives you greater freedom than other financial products. You make payments whenever you want, with the possibility of scheduling them (for example, every month) from your bank account. The only constraint: respect the minimum amounts provided for in the contract, from a few tens of euros to several thousand (a point to watch out for before committing). Just as freely, you can at any time – and without waiting eight years! – draw on accumulated savings. Another interest illustrating the plasticity of the envelope: the amounts invested are not capped. And you can hold as many contracts as you want. Finally, it remains possible to take out this investment at any age, even if after the age of 80, many insurers are reluctant. For minors, no problem, provided that the legal representatives (most often parents) do what is necessary.
Second advantage of life insurance: its financial universe sufficiently diverse to meet the majority of needs. In any contract, you have access to a secure support, the famous “euro fund”, in which savings (capital and interest) are guaranteed. Benefiting from an increasing yield for two years (around 2.50% on average for 2023), this support has once again become essential. But other choices are available to you through units of account, a term designating financial supports based on shares, bonds or even real estate assets, without capital guarantee this time. Enough to hope for a better valuation of your savings… in the medium-long term. Illustration: the average performance of the units of account will have been -12% in 2022 after +9.1% (2021), +1.1% (2020) and +13.1% (2019), according to France Assureurs. A yoyo reminding us that life insurance is long-term, a crucial point not to be forgotten.
This leads us to the third advantage of this envelope, its taxation. If you withdraw money from your contract, it will be taxed at a single flat-rate deduction of 12.80% for the first eight years (excluding social security contributions). Nothing advantageous here, but, after this period, thanks to an annual reduction on interest, you will be able to make significant withdrawals sheltered from the tax authorities (a variable amount depending on the weight of interest and capital gains in your insurance). life). Beyond that, the taxation reaches 7.50% (or 12.80% for those who hold 150,000 euros or more cumulatively across their various contracts).
An all-terrain tool
There remains the case of death, which is also favorable for passing on assets. The capital is then paid to the beneficiary(ies) designated in the contract, without integrating the estate of the deceased and, above all, according to an advantageous tax regime. Each beneficiary can thus receive 152,500 euros tax-free for the capital resulting from payments made before the age of 70, before being taxed at 20% on the following 700,000 euros (31.25% thereafter). Even for sums paid after age 70, the rule remains more favorable than transmission via any other investment.
With these three advantages, life insurance remains the ultimate all-purpose savings tool. But the market is cluttered with hundreds of contracts with very unequal content, both in terms of the financial offer and the fees taken in passing. The offers are also becoming more and more complex and the contracts contain dozens of jargonous pages. Vigilance, therefore.
An article from the special “Placements” section of L’Express, published in the weekly on April 11.
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