What is the purpose of a beneficiary clause in life insurance?

The november 25, 2022

A life insurance is a savings investment that is particularly useful in terms of inheritance strategy. Thus, the beneficiary clause must be thought out when subscribing a life insurance policy:


What is it?

A life insurance can allow you to develop a capital but also to transmit it, there is in particular a special regime conferred to this savings product. For example, your heirs can benefit from a deduction of 152 500€ per insured person when you inherit if you took out the life insurance before the age of 70. However, if no clause is filled in or if it is erroneous, the sums contained in the life insurance policy will be added to the estate and will be transmitted according to the order of succession, which is why it is important to define it properly.


The different types of clauses

Freely drafted clauses

It is possible for you to write your own clause, this can allow you to choose a person outside your family or to decide the distribution of the sums between several beneficiaries.


Standard clauses

The pre-filled clauses are the most commonly used ones. They are clauses that can be used only for people who are related to you or your spouse. However, they can restrict your freedom since it is not possible to separate the amounts or choose a specific percentage.


Special clauses

Two other types of clauses are possible:

    The dismembered beneficiary clause: this clause is not very well known and yet it offers an interesting tax advantage. It allows you to pass on the quasi-usufruct to your spouse upon your death and to pass on the bare ownership of the sums to your heirs. In concrete terms, the spouse will be able to enjoy the capital and your children will only be taxed on the bare ownership. At the death of the second spouse, the heirs will have a claim on the latter's assets and will in turn benefit from the capital developed in the life insurance.

    The option clause: this allows the beneficiary to accept only a part of the life insurance, leaving the remainder to the heirs.


Is it possible to modify the clause?

It is possible to modify the beneficiary clause during the life of the contract. 

Please note: if your beneficiary is aware of his or her status, he or she may contact the insurer and accept the life insurance. As a result, you will no longer be able to modify the clause. This is why it is advisable to adopt a certain discretion with regard to this clause. It can even be drafted by a notary, so that it will not appear on any contract.


Do you have a question concerning the optimization of the transmission of your assets? Our wealth management advisors can help you with these steps, contact us!

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Article by : Darina Attanasio

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