Announcements of 2025 returns for euro funds come at the start of 2026, sometimes with pleasant surprises. The best contracts display rate between 3% and 4%.
But be careful when reading these figures. Insurers communicate on rates of return “net of management fees”but not net of social security contributions. To understand the final amount credited to your contract, in “net, net”, you must take into account social security contributions.
Indeed, in life insurance, all gains are subject to social security contributionstoday set at 17.2%. Note that life insurance escaped the increase voted in the 2026 Social Security budget, which brings these taxes to 18.6% for many other investments. Whether you choose a fund in euros or in units of account (UC), you must pay this contribution of 17.2% on your winnings. The difference is in the timing of the collection, which can slightly change the yield.
Funds in euros: an annual levy over time
On funds in euros, social security contributions have been taken every year, automatically, since 2011. Concretely, when the interest is credited, often on December 31, the insurer withholds 17.2% and pays the sum to the State.
For example, you invest 10,000 euros in a euro fund with an annual return of 3% net of management fees. The first year, you therefore earn 300 euros in interest. But these 300 euros are immediately withdrawn by 17.2%or 51.60 euros, which brings your net gain to 248.40 euros. Your capital thus increases to 10,248.40 euros. The “net net” rate is therefore not 3% but 2.48%.
The following year, interest is calculated on this basis, and so on. Using the very theoretical hypothesis of an average return of 3% per year, your capital would reach 12,780.88 euros after ten years, the contributions having been paid gradually, over time.
Units of account: addition at exit
For UC, the mechanism is different. As long as you don’t make a buyout, no withdrawal social is not carried out.
Let’s take the same 10,000 euros again, this time invested in units of account with an average annual return of 3% (capital gain or dividends). As markets are volatile, this is a very theoretical hypothesis. The first year, you earn 300 euros which are not taxed over time. After ten years, your capital reaches 13,439 euros.
It is when you withdraw the invested savings in UC that social contributions of 17.2% apply, only on cumulative earnings which amount in our example to 3,439.16 euros, or 591.53 euros. Net of contributions, you therefore recover 12,847.63 euros.
Result: in this simulation, the UCs return approximately 67 euros more than a euro fund with equal return. A very slight advantage, due only to the fact that the tax is paid later.
All these details appear on your annual statementwhich you will receive in the coming weeks. Examine it carefully: this is the only way to know exactly how much your contract, “net-net”, brings in.
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