Life insurance, transmission of a capital instrument

There are two types of life insurance products

Contracts of insurance in the event of life which provides for the payment of a capital or an annuity to a given date (or end of the contract) if the Subscriber's contract is alive. These contracts more often incorporate an insurance in the event of death of the Subscriber before the scheduled date. Capitalized savings will be then paid to a beneficiary previously designated; Death insurance contracts include a capital or an annuity in the event of death of the Subscriber and for the benefit of one or more recipient designated.

It is strongly recommended to provide beneficiaries alternates. Suppose that your children, your life insurance contract beneficiaries die before you. The formula "my living children or represented" will allow payment of savings your grandchildren on your death.

These contracts have two important advantages

The recipient (s) can be freely designated by the Subscriber. They therefore allow you to significantly improve the situation of your family, including your partner or partner of Packs that have no interest in your estate.

They do not enter the estate of the deceased person. It is therefore not in the calculation of the available quota and reserve mass. Nor are they subject to succession duties.

A double limit exists at this point. The first is the "portion" that prevents any person from completely disinherit his children. It is advisable to limit the amount of savings invested in life insurance to the available quota.

The second is related to "clearly exaggerated bonuses", which means that life should not represent too much of the estate assets.

The other determinant of life lies in its tax treatment. Indeed, if you fed them before your 70s, your life insurance contracts can be transmitted to desired persons, without any taxation, amounting to 152 500 euros per person. Beyond this amount, the taxation will be limited to 20%, regardless of the amount and the relationship with the insured, i.e. a rate well below the rights of succession. By adding this limit that of 156 357 euros, own the rights of succession, you can pass on to your children 308 857 euros tax-free. These advantageous tax rules are valid for the sums invested before the age of 70. For the premiums paid after age 70 benefits are more limited. The deduction is reduced to 30 500 euros for investments after this age.

Moreover, beyond this ceiling this are estate rights that apply and not the 20% reduction. On the other hand gains capitalized on the contract are transmitted free of inheritance. Only the sums subject to taxation if the ceiling is exceeded.