Life insurance policies: Can we have several life insurance policies?

By Flinston
7 Min Read

Life insurance policies: As indicated by the 54 million open contracts, life insurance is an investment that is attracting an increasing number of French people. Some individuals only have one contract, while others have multiple. It is entirely feasible, and it offers several benefits! Let’s look at why acquiring several life insurance plans is appealing.

Life insurance: principle and interest

Life insurance policies: The operational premise of life insurance is as follows: you deposit specified sums on a regular or one-time basis, which the insurer then invests in various goods. You have the option of using units of account or euro monies. The return varies depending on the risks posed.

Subscribing to a life insurance policy accomplishes the following goals:

  • Prepare additional income for retirement ;
  • Build up savings , while making the money invested grow;
  • Pass on your assets while benefiting from privileged taxation.

It is possible to opt for several life insurance contracts since nothing prohibits it.

In contrast to other savings formulae such as the PEL, booklet A, and so on, it is feasible to keep several life insurance policies. You can have as many as you desire, and there are no maximum limitations. Then, when you open them, it is determined by your objectives.

It’s worth noting that by forming several contracts, you may take advantage of the Guarantee Fund’s guarantee of the funds contributed for personal insurance many times. This guarantee provides a maximum of 70,000 euros per depositor and insurance business.

What are the motivations for having several life insurance policies?

To prepare for the future of your children:

If you purchase back the contract after 8 years, you will benefit from favourable taxes. As a result, it is in your best interest to get life insurance for each kid from a young age. From the age of 18, he benefits from tax-advantaged capital.

To anticipate your projects:

Purchasing a home, funding a child’s education, planning for retirement… There are so many initiatives that should be saved in a different manner. The easiest and most prudent way to do this is to use a contract for each project, allowing you to select how much money to spend in each one.

If the length is brief, it is preferable to invest in support in euros. You choose security, understanding that you may need to withdraw the funds in the near future.

If the project is farther away, you might attempt to spend a bit more on account supports. This possibly allows you to profit from the possibilities and performances provided by financial markets in the future. The danger of capital loss, on the other hand, must be acknowledged.

To prepare for a transmission:

Without even mentioning the traditional succession, it is prudent to consider purchasing life insurance to transfer cash to a person of your choosing who is not necessarily a natural successor. Of course, the hereditary reserve must be respected.

If you’ve chosen to distribute different amounts to each recipient, having one contract for each individual is a good idea. As a result, the beneficiaries only know the amount of the value of the savings that is due to them at the moment of succession. Another benefit is that transmission takes less time. Indeed, the capital does not have to be transferred until all of the recipients have presented their supporting documentation.

To optimize the performance of your contracts:

Spreading the funds over many contracts lowers the risks. It is also a good method to diversify your media assets. The benefits may be larger. You may also choose from a variety of insurance firms based on the various investments you want to make. True, not all insurance firms provide all kinds of investments. This is particularly useful if you want specialised assistance. You may also benefit from many styles of management, such as:

  • Free management ;
  • Profiled management ;
  • Managed management .

It is also a way of spreading the risks you take

Having many life insurance plans allows you to avoid taking risks or restricting your performance to just one. The record decline in interest rates is placing pressure on insurers. So it’s a solid argument to choose that route.

By having many contracts with various firms, you secure your money in the event that one of them defaults.

Read more: Questions To Ask Before Signing Up For A Travel Credit Card

Optimize taxation on redemption and in the event of death and succession

Life insurance policies: In the case of redemption, bear in mind that taxes is only beneficial if you hold your life insurance for at least 8 years.

If you pick the flat tax rather than the progressive scale, the fee is 7.5 percent. It is, however, 8% higher than 150,000 euros after a decrease of 4,600 euros for a single individual or 9,200 euros for a pair.

Social security contributions are 17.2 percent on all life insurance redemptions, regardless of the date of payout.

In the context of inheritance after death, inheritance tax on payments made beyond the age of 70 benefit from a less favourable reduction than payments made before that age. They are 30,500 euros for all recipients, with a discount of 152,500 euros for previously paid premiums.