Taking out a life insurance contract as early as possible allows you to anticipate your savings and give them time to grow, gradually building up capital. Life insurance has many advantages to help you realize your projects, prepare for your retirement or pass on financial assets.
How to build up savings and grow capital with life insurance?
First option: you schedule regular payments. For example: you pay €50 per month on life insurance for 10 years, with an average return of 2%. With interest added to the premiums paid, you will end up with a capital of approximately €6,495.
Second option: do you already have capital and want to make it grow ? Life insurance is also a good investment upon payment of a single premium.
An investment in a euro fund offers lower average returns than unit-linked funds , but the money invested is 100% secure. By choosing this type of fund, your capital can only grow. It is however possible to use transfer options (fourgous) or programmed arbitrage to enter the units of account and hope for better returns.
Good to know: the interest generated by your capital invested in life insurance is not subject to income tax, as long as you do not surrender your contract.
What is the point of opening life insurance to prepare for retirement?
You can fund it at your own pace, depending on your savings capacity, through regular or one-off payments.
In the event of death, the life insurance capital is transferable outside of inheritance and the payment of the annuity can be deferred to the spouse.
With a view to building up a retirement supplement, it is recommended to choose a multi-support contract , to hope for better performance and grow your savings. It all depends on your investment horizon as well as the degree of risk you are willing to take on the financial markets. Do not hesitate to seek advice from your insurance company to determine the profile best suited to your situation and your savings plan.
For example: if the contract is taken out around the age of 40, you can invest up to 2/3 of your savings in diversified (but more risky) vehicles whose potential return is more attractive in the long term.
How to pass on your assets through investment in life insurance?
The life insurance capital does not enter into the estate. There are therefore no inheritance taxes to pay
It is possible to choose as beneficiary of the contract a person who is not a legal heir: partner, friend, distant relative, etc.
Certain life insurance policies allow you to favor your minor grandchildren
Life insurance can be essential for a couple living together. In fact, a cohabiting partner has no rights in matters of inheritance. Designating your partner as the beneficiary of your life insurance therefore allows you to protect them financially in the event of death.
Please note: if the policy subscriber dies before having designated a beneficiary for his life insurance, the capital will be reinstated in the estate assets (Insurance Code, article L132-11).
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