The multi-support life insurance contract appeared about thirty years ago. The yield of contracts in euros is shrinking, insurers have been ingenious in expanding their offer to the stock market and real estate. The crisis has curbed the collection of an operation that no longer seems to be favored by investors.
It is a contract that offers the subscriber a set of supports allowing him to invest in the choice of money markets, stocks, bonds , real estate paper or simply a safe fund said funds in euros . An ideal tool for long-term management, it helps fill the gaps in pay-as-you-go retirement.
The supports offered by most multi-asset life insurance contracts are generally UCITS (undertakings for collective investment in transferable securities), ie SICAVs (open-end investment companies) or mutual funds ( mutual fund).
Formerly considered as a tax haven, life insurance is now heavily taxed during withdrawals, even subject to double taxation with a tax on capital gains and social security contributions.
Social security contributions on life insurance have not stopped climbing for fifteen years. While they were only 0.5% in 1996, they amounted to 15.5% in 2015 . They understand :
- The social levy
- The additional contribution
- The solidarity levy
In the context of multi-media contracts, the capital gain varies from one year to another and the performance can be negative . The legislator has therefore decided that social security contributions will be paid upon withdrawal.
The tax on the capital gain
Two options are available to the subscriber at the date of withdrawal:
- Opt for the mandatory lump sum , in which case the insurer will deduct the capital tax to be paid,
- Opt for the income tax return . The choice obviously depends on its marginal tax bracket.
Declaration on income
The subscriber has the opportunity to declare the capital gain on his tax return. It will be added to professional income and therefore taxed accordingly.
In the case of high taxation, it is preferable to opt for flat-rate withholding tax.
- Withdrawal before age 4: 35%
- Withdrawal between 4 and 8 years: 15%
- Withdrawal after 8 years: 7.5%
After 8 years, the levy applies after a deduction of € 4,600 for a single person and € 9,600 for a couple.
Attention to fees
Pay attention to the fees applied by intermediaries. As much as they are reasonable when the transaction is underwritten with a bank or an insurer, they can be very high when transactions are subscribed with wealth managers.
The sales charge is the fee charged on the amount invested. They range from 0.5% to 4.5% when the investment is made with a broker or wealth manager.
Note that some online brokers offer 0% fee contracts.
Beware of certain dubious practices on the part of some asset managers who do not hesitate to benefit from a double remuneration: at the entrance of the life insurance contract and at the entrance of the SICAV.
The management fees are almost presented by the various intermediaries. When taken from managed savings , their impact is nevertheless real on the yield of the operation.
Obviously, having multiple media requires regular monitoring of performance and in case of need or opportunity on the markets to make one or more arbitrations during the life of the contract . Some companies allow to make some free transfers a year. Others charge at the first arbitration. Inquire before signing especially if you plan to conduct a dynamic management of your investment.
Termination of the contract
A life insurance policy has a 30-day notice period during which any insured person can terminate without any fees or penalties. The insurer must then repay the sums paid in full within one month (see the general conditions). After this period, the termination will be made with a redemption with all the tax consequences that this implies.