Insurance

Open life insurance? The best decision to make – April 2022 – News – Life insurance

Today, to invest your savings, you have dozens of envelopes and intermediaries at your disposal, and thousands of products and securities that you must choose in accordance with your objectives, your horizon and your risk profile. No wonder we get lost… Yet there is one very simple thing to do, almost automatically: open a life insurance contract. We explain to you why you will be delighted with this decision in 3 months, 1 year, 8 years and 30 years.

take date

Life insurance has many advantages, perhaps the most well-known being the tax advantage on earnings. When you make a partial redemption on your contract, the part of the earnings included in this redemption are taxed on income tax or are subject to a flat-rate discharge. And if the contract is more than 8 years old, you benefit from an annual allowance of 4,600 euros for a single person or 9,200 euros for a married or PACS couple, while the deduction rate can drop to 7.5% (for amounts under €150,000 per person).

This is the age of the contract. This means that if your contract is over 8 years old, the tax benefit will apply to all your withdrawals. Certainly, life insurance is in the field of the flat tax, but it continues to benefit from a derogatory tax regime.

Clear, having a life insurance contract for more than 8 years is a real tax loophole. Open a contract now, with a small payment, to set a date and enjoy it in 8 years.

Namely: for a payment of barely 100 euros, you can take a date and open a better rate Life Placement contract.

Discover our Suravenir Meilleurtaux Placement Vie policy

Pay your first savings

Setting up scheduled payments allows you to build up savings much more quickly. Just by pouring 50 euros per month on a life insurance policy, you get on 8 years a capital of more than 5,000 euros (with an annual performance assumption of 3%*).

Be careful to select a contract without entry fees. These fees chip away at a portion of every investment before you can even grow that capital. These payment fees, of 5% maximum, are legion on traditional contracts. In the example above, if you incur a 5% fee on paymentsyou pay over 8 years 240 euros in entry fees, plus 35 euros in loss of earnings because these 240 euros could have been invested and brought in interest. That’s nearly 6 months of savings gone up in smoke.

To know: on Meilleurtaux Placement Vie, you can make scheduled payments from 25 euros per month, with no entry fees!

Find out more about Best Life Placement Rates

Benefit from a safe return

The Livret A and the Livret Développement Durable (LDD) are at 1% yield, while that of the Housing Savings Plans (PEL) opened this year is below 1% (after tax).

Some “super booklets” still offer 2 to 3% but over short periods (from 3 to 6 months) and the promotion can only be used once. And the gain is taxed each year… They are therefore to be avoided.

In 2021, the average rate for funds in euros should be around 1.1%**. Even without the 8-year tax benefits, with the 30% flat tax, the yield would be 0.77% net. And in practice, not only is taxation often lower, but in addition, you can find guaranteed funds in euros that perform better than the average.

Find out about Best Life Investment Rates

Investing in paper real estate

With the fall in returns from funds in euros, policyholders who wish to maintain a correct level of return have no choice but to take an interest in the units of account available in their life insurance contract. But how to get returns without taking too much risk? By relying on real estate vehicles (SCPI-SCI-OPCI), which today present the optimal “return-risk ratio”.

These media offer a sizeable advantage: they allow you to invest in physical real estate, by limiting management and liquidity concerns and for a starting investment that can be much lower. The management company is responsible for renting and maintaining the real estate on behalf of unitholders! The other advantage is that these vehicles allow to pool the risks and thus reduce the rental risk.

Subscribing to these vehicles as part of life insurance allows the subscriber to avoid taxation of property income and real estate capital gains. It’s here soft taxation of the life insurance contract that applies. The fact of accommodating them in a life insurance contract also allows, unlike direct holding, to benefit from a management of entries/exits by the Insurer itself, which is a double advantage for the Client: reduced subscription feesand greater flexibility in the sale of shares.

Good to know: The Liberty life best rate contract is the best contract for investing in SCPIs and access to the best of business real estate with our selection of 20 SCPIs in the best conditions:

  • Period of enjoyment on the 1st day of the month following the investment.
  • 100% of the rents are donated for SCPIs with variable capital.
  • Accessible up to 50% of your payments.
  • 0.5%/year in management fees for the life insurance policy, which is one of the lowest fees on the market!

Find out more about Liberty Life Best Rates

Partially invest in stocks

With some very attractive performance over 5 years and 10 years, investment in equities is enticing. The problem is that 10 years ago, all individuals had fled the stock market after the crises of 2008 and 2011. They came back en masse in 2018 and 2019… only to recover from a new fall in the markets in 2020 The second half of 2020 and 2021 were then very prolific for equity investments, but the year got off to a bad start with the conflict in Ukraine and fears of hyperinflation.

Is it the right time to invest or should we wait? It is difficult, if not impossible, to know the answer to this question. Hence the importance of investing while minimizing risks and management concerns.

If you have a long time horizon, you minimize the importance of the entry point. Historically, the best performance of the CAC 40 over one year has been 60%, and the worst -40%. Bigger! Corn over 30 years, the annual performance of an investment in the CAC 40 is between 2% per year and 10% per year. It suddenly seemed much less risky. An investor who bought the CAC 40 index in 2007 would have achieved a performance of 90% today (excluding fees and taxes). It would however have suffered the subprime crisis, the Greek crisis, Brexit, the Sino-American conflict, the health crisis of 2020 and the Russian-Ukrainian crisis of 2022. It should also be noted that scheduled payments smooth the effect of the markets.

The M Strategy Allocation Vie arbitration mandate allows you to delegate the management of your life insurance contract to the experts of Meilleurtaux Placement. The strategic investment committee built around Marc Fiorentino manages your contract within the framework of this arbitration mandate. It combines independent and complementary expertise in asset allocation.

You have nothing to do ! Meilleurtaux Placement offers you to invest in an allocation managed by investment experts. An allocation built around the convictions that we share in our newsletters, with arbitration potentially every month to monitor the evolution of these convictions over time.

Discover the managed management of Meilleurtaux Allocation Vie

Invest short-term cash

Contrary to popular belief, the sums invested in life insurance are always available. Like a booklet. And even before 8 years, the taxation can be softer than for an unregulated booklet.

Example: for an investment of 50,000 euros yielding 1.5%** over one year (750 euros in interest):

  • On an unregulated passbook, the 750 euros will be taxed, whether or not you make a withdrawal, generally at the flat tax of 30%: i.e. 225 euros tax.
  • – On the fund in euros of a life insurance contract, there is no income tax until you make a withdrawal. So, potentially, the tax is zero. If you make a withdrawal, only the winning part of that withdrawal will be taxed.

For example, if you make a withdrawal of 10,000 euros, only 147 euros will be taxed, at the flat tax of 30% if the contract is less than 8 years old: ie 44 euros tax.

If the contract is more than 8 years old, the insured then benefits from a reductionof 4600 euros for a single person and 9200 euros for a couple, which applies to the interest to be declared to income tax. He would then only pay social security contributions (17.2%). That is 25 euros of tax to pay.

Whether your contract is 8 years old or less, life insurance is ideal for investing cash for a few months.

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Organizing your estate before age 70… and after

Life insurance, beyond being an investment suitable for making capital grow and preparing for retirement, is also an ideal tool for preparing for an estate. Thanks to the beneficiary clause, you freely designate the beneficiary or beneficiaries of the capital invested in the contract. You can therefore benefit whoever you wish, at the expense of other heirs (without, however, exaggerating and disinheriting a child).

Retail investors are advised to fill up on life insurance before age 70, to take full advantage of the reduction, of 152,500 euros per beneficiary on inheritance tax. Beyond that, the sums are taxed at the rate of 20%.

Once you have taken full advantage of the allowance of 152,500 euros per beneficiary, there is no longer any inheritance interest to be paid into life insurance…up to age 70. Because after 70you no longer benefit from the allowance of 152,500 euros, but you benefit from a new reduction of up to 30,500 euros per insured, all policies combined.

In addition, for payments after age 70, only premiums paid are subject to inheritance tax. Winnings, whatever their amounts, are exempt.

A new welcome carrot, especially since they are very rare after 70 years. Booklet, PEA, real estate, etc. no other investment offers an estate tax deduction after age 70. On good terms….

Find out more about our life insurance

Non-contractual communication for advertising purposes

*Non-contractual hypothesis. To obtain an annual performance of 3%, the saver must invest at least partially in units of account, which present a risk of capital loss.

** Revaluation rate for 2020 net of annual management fees, excluding social and tax deductions. Past returns are not indicative of future returns. To access the Suravenir Opportunites fund, each payment must include at least 50% in Account Units, which carry a risk of capital loss and are subject to upward and downward fluctuations in the financial markets. To access the Suravenir Rendement fund, each payment must include at least 30% in Account Units.

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