Succession: French people prefer life insurance, are they right?

To transmit their heritage, the French rely less and less on the will … and more and more on life insurance. A winning choice, since this savings product offers very competitive tax advantages.

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When it comes to sleeping your last wishes, you immediately think of a document: the will. However, to prepare for their succession, the French have less and less use. This is what the latest intergenerational solidarity observatory led by the ASAC-FAPS Savings Association with IFOP, and unveiled this Thursday May 15, evidenced. According to this study, the will gradually loses ground in inheritance practices: only 32% of French people questioned declare that they have written it or intend to do so soon, a decrease of 5 points compared to 2024. And this while more than 7 French in 10 (71%) declare that they intend to bequeath an inheritance.

Paradoxical? Not that much, because the French have understood this well: this transmission can take place by other means than the will, and in particular via a savings product such as life insurance, which remains the instrument favored by a majority of respondents (53%), far ahead of other solutions, such as banking booklets (20%), real estate (18%), the scholarship (5%) … Indeed, in addition to the possibility of saving and making its savings Long life, life insurance allows, via its beneficiary clause, to designate the person (s) of its choice which will inherit capital on its death. This with two major advantages: being able to choose your beneficiary (s) outside the family circle, and with a reduced taxation on the capital transmitted.

The capital of life insurance is transmitted excluding succession

As a reminder, the Testament makes it possible to organize the sharing of its goods during its lifetime, but the distributed heritage is then subject to inheritance tax, which depend on the relationship with the deceased. This relationship determines the reduction to which the heirs are entitled. It is only beyond this reduction that inheritance taxes apply. The surviving spouse or PACS partner is completely exempt from inheritance tax, and for a child, a father or a mother, the maximum reduction is 100,000 eurosif it has not been used as part of a donation in the 15 years preceding death.

With life insurance, which is transmitted out of succession, the spouse is always exempt from any taxation. But for all the other potential beneficiaries (children, brothers, sisters, nephews and nieces, third parties, etc.), taxation is more advantageous than in the context of a succession since the payments made by the subscriber before his 70 years benefit from a Defection of 152,500 euros which applies to each designated beneficiary. Our columnist Gilles Belloir, Director General of Placement-direct.fr takes the example of a couple who each subscribed to their own life insurance contract : “If each parent designates, for example, the three children as beneficiaries in equal parts, they will be able to send them up to 915,000 euros in complete tax franchise. A sacred advantage! “

After 70 years, this tax advantage decreases, because it is then a reduction of 30,500 euros which applies for all beneficiaries. A drawback which can be compensated by the exemption from taxation on the interest and earnings of the contract. Imagine that you want to invest a sum of 80,000 euros at the age of 70. On your death, your life insurance contract is valued at 140,000 euros. But for your beneficiaries, taxation will only apply on 49,500 euros (80,000 euros – the reduction of 30,500 euros), on almost three times less than your total capital. In other words, whatever your age, life insurance remains unbeatable to reward your heirs, within your family circle as outside.