Life insurance is an investment that appeals to many French people, and for good reason, it has many advantages. It is also quite possible to have several life insurance policies. What are the advantages of opening several contracts?
Principle of life insurance and its interest
The operating principle of a life insurance contract is as follows: you make regular or irregular payments, which the insurer places on the products of your choice (euro or unit-linked funds), for a more or less performing according to the degree of risk.
Good to know: 116.3 billion euros were invested in life insurance contracts in 2020 according to the French Insurance Federation. Subscribing to a life insurance policy meets several objectives, which are mainly as follows:
Having several life insurance policies: how does it work?
Unlike many savings products (passbook A, PEL , etc.), it is quite possible to open several life insurance contracts . You can have as many as you want and with no limit . The best time to open life insurance depends on the objective you pursue behind the opening of the contract(s).
Good to know: opening several life insurance policies allows you to benefit several times from the guarantee of the sums placed on it , offered by the Guarantee Fund for Personal Insurance (FGAP). This guarantee has a ceiling of €70,000 per depositor and per insurance company.
Carry out several projects
Life insurance can allow you to build up a pension supplement, save to pay for your children’s studies, prepare a real estate investment, etc. Opening life insurance by type of project can allow you to see more clearly and above all, to adapt your investment choices .
For example: around the age of 35, you take out life insurance to prepare for your retirement. You still have time ahead of you to have a more risky investment approach but with a higher return. Whereas if you need to release the sums in the nearer horizon, it is better to opt for funds with a lower return, but totally secure.
Adapt the placement according to the beneficiaries
It can also simplify things if you have many beneficiaries on your life insurance. Rather than having a beneficiary clause with complex distributions, opening life insurance by beneficiary will make life easier for them at the time of your succession , as well:
The beneficiaries will not be able to know the amount that the others will receive.
The formalities are shorter since it will not be necessary to wait for all the beneficiaries to have sent their supporting documents for the capital to be released.
Optimize contract performance while reducing risk
Spreading your assets over several contracts allows you to diversify the investment vehicles and optimize your earnings. Since all the possible investment funds for a life insurance policy are not available from a single insurer, opening several contracts with different insurance companies provides access to more media. Why not also take the opportunity to choose different types of management according to your contracts:
Optimize taxation in the event of redemptions
The taxation of surrenders on life insurance contracts becomes very advantageous from the age of 8:
If you choose the flat tax rather than the progressive scale of income tax, the flat-rate levy will be 7.5% after 8 years (12.8% beyond €150,000), after an abatement €4,600 .
Optimizing taxation on life insurance in the event of death and succession
Inheritance tax on payments made after age 70 on life insurance benefit from a less attractive allowance than those paid before: €30,500 for all beneficiaries against an allowance of €152,500 per beneficiary for premiums paid before 70 years.
