Life Insurance Contract: if the deferred profit sharing would be the considered solution?

The december 15, 2020

Do you think that the life insurance contract may not meet your expectations because you can make regular withdrawals and therefore being taxed on the part of the interest generated?

Wealth A7 has a solution for you: the life insurance contract with the deferred profit sharing!
Let's start with some generalities:
Although the life insurance contract is the preferred savings vehicle for the French, how this legal envelope works is still not well known.
The life insurance contract makes it possible to meet an objective of valuing one's savings while benefiting from inheritance and tax advantages:

Also, in the event of partial or total surrender of the contract after 8 years, the subscriber of the contract benefits from an annual allowance of 4 600€ for a single person and 9 200€ for a couple subject to joint taxation.

One of the preconceived ideas that the French may have is that the funds placed in this medium are blocked for 8 years. There is confusion here between the liquidity of the contract and its fiscal maturity. In short, regardless of the age of the contract, this support is 100% liquid. Only the taxation varies before or after 8 years.

The contract with the deferred profit sharing, what is it ?

This life insurance contract works in every way like a classic contract with the difference that the interest generated by your capital will not be paid on your contract but on a secure medium, apart, and this until the eighth year of the contract.
Thus, during the first eight years, the withdrawals that you make will only charge the capital that you have invested and not the interest generated. Thus, you will not have any tax generated since, as a reminder, your initial capital is not taxed.

From the eighth year, the interest retained will be reinjected into your contract. On your future redemptions, you will therefore be subject to the taxation of a conventional life insurance contract of more than eight years. You will therefore be taxed at 7.5% for the share of income tax and 17.2% for social security contributions and will also benefit from the abatements mentioned above.
The downside of this type of contract is that the entry ticket is usually higher than that of a traditional life insurance contract.
In conclusion, don't let your money sleep on your livret A anymore, it's time to boost your savings!
Whatever your profile, your goals, Wealth A7 will always have a tailor-made solution to offer you! So don't hesitate any longer, contact us directly on our website, we will be able to advise you and assist you in managing your savings.


Article by : Eloïse LAUTIER

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