Life insurance: “What is the lifespan of my contract?”

A reader wonders about the duration registered on its life insurance contract and its impact on the tax advantages of this savings product.

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Mohamed, capital reader, addresses the following question: “Hello, I have just taken out life insurance, and it is indicated on the contract a due date at 50 years. I always thought that the duration was 8 years. Is it my disadvantage? Thank you for your answer. »»

Hello Mohamed, and thank you for your question, which clarifies frequent confusion around the duration of life insurance contracts. Insurers can indeed include a due date, fixed to the subscription. But beware, it can be an indicative date only, certain contracts being tacit. You must therefore consult the general conditions, or interrogate your advisor.

You keep the possibility of withdrawing your capital at any time

If your life insurance contract is not renewable, it is on the due date that the insurer must return your capital to you, plus interest. But this date has no consequence on your ability to make withdrawals before! In reality, life insurance is a liquid and accessible placement at any time: you can make partial or total redemptions (withdrawals) without having to wait for the deadline indicated on your contract.

Where the duration of 8 years comes is at the level of the taxation of withdrawals. Unlike a widespread idea, life insurance does not end after 8 years, but it is from this duration that withdrawals benefit from a more advantageous tax framework. After 8 years of detention, you benefit from an annual tax reduction 4,600 euros for a single person and 9,200 euros for a couple On removed gains, which reduces taxation.

In other words, Mohamed, this duration is not a disadvantage, because you are in no way blocked for 50 years. You can recover your capital at any time, without waiting for the deadline, even if it may have a tax impact depending on the moment you make your withdrawal. If your project is to save in the long term while keeping a certain flexibility, life insurance remains the most suitable placement. Your contract will continue to operate after 8 years and you can optimize your withdrawals by taking advantage of light taxation.

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