In certain cases, it is possible to benefit from a tax exemption on life insurance earnings. We explain everything to you!
Life insurance is a savings product. It is even the favorite of the French, for several reasons. Life insurance allows you to prepare a project, in the medium or long term, but also to anticipate retirement or an inheritance. After an initial payment, it is possible to continue, or not, to pay money regularly. The enormous advantage of life insurance is that it is, in most cases and depending on the type of contract taken out, a risk-free investment. The capital can be recovered at any time, although it is advisable to wait at least 8 years, and the capital gain is not subject to tax.
But, because there is a but, you should know that if you make a total or partial surrender of your life insurance, the gains made are taxed according to the duration of the contract. However, there are several cases of exemption which allow you to withdraw money from your life insurance without having to pay anything to the tax authorities, or even to be exempt from social security contributions. Indeed, it may happen, in the event of hard times, to have to dip into your savings to finance a project or repay debts.
Thus, this possibility is open to people who are going through a difficult phase of life to help them get back on track, by allowing them to recover their money easily and without additional costs. Drawing money from this account free of charge is therefore possible if you or your spouse (spouse or PACS partner only!) are made redundant, are ceasing to work following a judicial liquidation or are taking early retirement. Life insurance interest is also exempt from income tax if the outcome of the contract results from the recognition of disability (2nd or 3rd category) of the signatory of the contract or their spouse.
To benefit from it, two conditions must be met. The first is that it is imperative to make the redemption request before December 31 of the year following the event (unemployment, disability, etc.). The second (not to be neglected!) is to request the benefit of the exemption from the insurer at the time the life insurance contract is surrendered.
