With each budget, benefits of life insurance in matters of taxation and inheritance are in the hot seat. And the finance bill (PLF) for 2026 is no exception to the rule, since numerous amendments examined by the members of the Finance Committee of the National Assembly purely and simply requested the elimination of the tax loophole for life insurance and its inclusion in the estate assets subject to inheritance tax. So many proposals rejected by the deputies, Monday October 20.
While holders of a life insurance contract could have feared losing their advantages in view of the very degraded state of public finances, the government having already targeted numerous tax loopholes in the 2026 budget, quite the opposite happened. The deputies have in fact adopted an amendment tabled by the Right Republican group, which aims to “promote transmission and release savings towards younger generations”. More precisely, the measure intends to allow the subscriber of life insurance to transmit to his beneficiaries up to 152,500 euros completely free of duties, and without waiting for his death.
An early transmission regime limited to the year 2026
To take advantage of this mechanism, already voted on first reading of the 2025 budget last year, the contract holder will have to respect several criteria. Namely having made your payments before October 1, 2025 and before your 70th birthday. However, he must have reached this age by December 31, 2026. In other words, he will be able to benefit, provided he has made his payments before age 70, from the preferential life insurance regime at the time of inheritance.
Because as a reminder, upon the death of the subscriber, each of his beneficiaries can receive up to 152,500 euros without any rights to pay. With the advance transmission mechanism thus voted, “the allowances used would then be deducted from allowances of the same nature, if they still exist, on the date of death”. For example, if a beneficiary of the contract receives 100,000 euros under this system limited to the year 2026, only 52,500 euros (152,500 – 100,000) will be affected by the tax exemption on the death of the subscriber.
“The provision proposed by this amendment has a major advantage: it does not represent an additional cost for public finances. In fact, the sums transferred would in any case have been subject to exemption at the time of the holder’s death.specifies the explanatory statement of the reasons for the amendment of the Republican Right. Amendment which for the same reasons received a favorable opinion from the general budget rapporteur, Philippe Juvin (also Republican Right), on the grounds that “it costs nothing to public finances”. It now remains to be seen whether this amendment will receive the same reception in the Hemicycle, during the examination of the 2026 budget in public session.
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