By respecting all of these selection criteria, you will be able to make the most of the undeniable advantages offered by life insurance after 70 years.
Life Insurance After 70 – Compare Policies to Find One You Can Afford
Even if the taxation of the contract in the event of death is less advantageous, life insurance remains a good solution to increase your income or prepare your estate after 70 years. Taxation and related benefits: what are the particularities of life insurance after 70?
Taxation on the Death of the Subscriber
Remember that the tax authorities distinguish payments made on the contract according to the age of the subscriber at the time of payment: before or after 70 years.
While the Paid into the contract before the age of 70 is exempt from duties up to an amount of 152,500 euros per beneficiary (article 990 I of the General Tax Code), premiums beyond the age of 70 are taxed long before.
Enacted by article 757 B of the General Tax Code (CGI), the rule applicable to sums paid on the contract from the age of 70 can be summarized as follows for all contracts taken out since November 20, 1991:
- Exemption from duties on sums paid up to 30,500 euros. It is calculated on all contracts opened in the name of the deceased combined.
- Beyond this sum, inheritance tax depends on the degree of relationship between the subscriber and the beneficiary.
- Exemption from the part of representing the accrued interest.
Reminder: Paid before or after the age of 70 is fully exempt from duties when the beneficiary is the surviving spouse or civil partnership partner. The rule also applies to siblings who are single, widowed, divorced or separated, over the age of fifty, or disabled and constantly domiciled with the deceased for at least five years.
An Opportunity to Seize to Advantageously Organize Your Succession
Despite the popular belief that life insurance is no longer advisable after age 70, taking out a contract and paying premiums remains advantageous when you take a closer look. Indeed, even after 70 years, the paid-in is not limited. You can thus invest as much as you wish for the benefit of your spouse or PACS partner, who are totally exempt from duties, but also for the benefit of other beneficiaries subject to inheritance tax.
Life insurance after age 70 confers 2 advantages:
- It offers a reduction of 30,500 euros – what no other investment (booklet A and other booklets, etc.) will give you!
- It completely subtracts the interest obtained by the contract from the inheritance tax. What no other investment, whatever it is, allows you to do…
Tips for Optimizing Your Life Insurance After 70
To make the most of the advantages described above, certain precautions should be taken. Even if you already have one or more other contracts taken out before age 70, after age 70, take out another contract to simplify management in the event of partial withdrawals and not to mix up the applicable taxes. If you do not take this precaution, if you mix the payments before and after age 70, the withdrawal will be deducted in proportion to the paid-in under each of the two plans.
Life insurance, even after age 70, can be a way to enhance your assets and can be a source of regular additional income.
But in the current context of investments with very low returns, to succeed in your operation both in terms of inheritance and in terms of valuing your assets, you will have to be drastic when selecting and choosing a good contract. A “good” contract is:
- Reduced fees (no or very low payment fees and reduced management fees: 0.70% maximum).
- A good fund in euros (in the current context of falling bond yields, some insurers, thanks to sharp management of the part of the fund invested in equities and real estate, still manage to pay a revaluation rate that is sometimes significantly higher than the announced average by the profession and which should be between 1% and 1.3% for 2019).
- A selection of quality units of account to boost the performance of the contract by taking a limited risk (20 to 30% will be invested in these financial supports – heritage or flexible funds – to boost its performance.
- A delegated management offer at an affordable price. Managing one’s unit-linked contract oneself (in so-called “free” management) is not given to everyone since it requires time and a minimum of financial knowledge. This is why it is necessary for the insurer to offer its client a delegated or managed management method at an acceptable cost.