Life insurance is an investment solution appreciated by the French. This product appeals in particular by its attractive rate of return and its tax advantage. However, it may happen, over time, that the subscriber of the account wants to change the contract. Indeed, formulas better suited to their needs may appear over the years, with better returns, better contract management and diversified investment possibilities. Therefore, rather than starting from scratch with a new account, it is possible to transfer the capital. Being able to transfer one’s life insurance contract to a more advantageous contract is a recent step. This contract transfer is governed by the Pacte law of May 2019. Decryption.
Life insurance: how to transfer your contract? / iStock.com – thodonal
How does the life insurance policy transfer work?
Taking out life insurance is, in today’s environment, one of the best ways to save money. However, until the promulgation of the Pacte law of May 2019, the surrender of the contract was necessary for any policyholder who was no longer satisfied with the terms of his life insurance contract. From there, he had to open a new contract with the insurer of his choice and start from scratch. However, it is now possible to change your life insurance contract by transferring the capital raised to a new contract, considered more advantageous. This process automatically results in the transfer of the tax anteriority of the old contract to the new one. It is nevertheless limited insofar as the change of contract must be carried out within the same insurance company, without the possibility of switching to the competition.
The conditions of transfer from one contract to another
To save more, transfer an old life insurance contract to a new one, with more advantageous terms (better returns, diversity of investments), is an option to consider. In general, all types of life insurance contracts, whether multi-support or mono-support, are eligible for a transfer, as soon as the insured person so wishes. This change inevitably leads to the establishment and signing of a new contract to adhere to the newly chosen terms. However, unlike a simple new subscription, the contract thus established receives, in addition to the entire capital in euros of the old one, its tax seniority. This transfer has no limit of amount, subscription network or age and may sometimes be billed by the insurance company.
Transfer your life insurance contract to a PER
Until December 31, 2022, holders of a life insurance policy have the option of transferring their capital to a retirement savings plan (PER). However, not all policyholders will be able to take advantage of this provision. Indeed, only those who are 5 years or more away from retirement can request this contract transfer. The advantage, in addition to the retention of the tax advantage, is that it is possible, in this case, to migrate to another insurance company. In addition, the transfer of a life insurance contract to a PER entitles you to a doubled allowance, a tax bonus, for any contract over eight years old.