Multisupport life insurance offers a favorable tax environment compared to other investments such as the Securities Account or the Unregulated Savings Booklet.

The taxation applied to the life insurance policy depends on the type of transaction carried out: Total or partial surrender, annuity exit or death benefit.

Taxation in the absence of redemption

If you leave your money in the life insurance policy, the interest earned is exempt from income tax.
Taxation only occurs in the year of the insured's death or partial surrender.

With regard to social security contributions, interest earned on the fund in euros is subject to annual social security contributions as soon as they are entered in the accounts at the overall rate of 17.2% directly deducted by the insurer.

Taxation in the event of redemptions (total or partial)

With the application of the new law on taxation of life insurance, it is now necessary to distinguish the payments (and subscriptions) made before and after September 27, 2017.

The income tax option is still possible but it is only attractive if the investor's tax rate is less than 12.8%.

The macron law introduces a big novelty: a single flat rate (PFU) of 30%. This is the end of the famous sentence: "My money is stuck 8 years …". With this tax novelty, the saver will no longer have interest in blocking his money to benefit from a lower tax on capital gains. (except beyond 8 years for payments below € 150,000).

Seniority of the contract Taxation Between 0 and 8 years


30% on the capital gains decomposed as follows:

  • 12,8% flat-rate deductions
  • 17.2% social security contributions (CSG and CRDS)
Beyond 8 years


For payments less than or equal to € 150,000 :

  • 7.5% flat-rate deductions
  • 17.2% social security contributions (CSG and CRDS)

>> an overall rate of 24.7%

For payments over € 150,000 :

  • 12.8% on the capital gains
  • 17.2% social security contributions (CSG and CRDS)

>> an overall rate of 30%

The annual deduction of € 4,600 for a single person or € 9,200 for a couple is applicable to all contracts. It is applied in priority to the part taxed at 7,5%.

It should be noted that the law provides for a case of a flat tax exemption when the taxpayer has a reference tax income (RFR) of the year N-2 (for the fiscal year 2018, to take the RFR 2016) of less than 25,000. € for a single person and € 50,000 for a couple subject to joint taxation.

Payments (and subscriptions) before September 27, 2017

In case of partial or total surrender, only interest (capital gains or gains) are subject to taxation.

For a total surrender , interest is determined by the difference between the value of the contract at the time of redemption and all payments made on the contract.

For a partial surrender , the interest is determined by the proportion between the installments and the capital obtained.

Current situation for all payments made since 1 January 1998

Seniority of the contract Taxation Between 0 and 4 years old
  • 35% flat-rate withholding tax + social security contributions
  • Income tax: inclusion in taxable income
Between 4 and 8 years of age
  • Fixed-rate lump-sum withdrawal of 15% + Social security contributions
  • Income tax: inclusion in taxable income
Beyond 8 years of age
  • Flat-rate lump-sum withdrawal of 7.5% + Social security contributions after abatement of € 4,600 for a single person or € 9,200 for a couple.
  • Income tax: inclusion in taxable income after abatement of € 4,600 for a single person or € 9,200 for a couple.

Update on social levies

Interest is now taxed at the rates in effect at the time of the chargeable event and no longer the historical rate at the time the interest was generated.

The benefit of the "historical rates" system is maintained for the interest recorded during the first 8 years following the opening of the life insurance policies opened between 1 January 1990 and 26 September 1997.

Exceptional cases of non-taxation of capital gains

Regardless of the duration of the contract, interest is exempt from income tax when the repurchase of the contract occurs following:

  • A dismissal of the subscriber or his spouse or partner of Pacs, provided that the person concerned is registered as a jobseeker at Pôle Emploi

  • At the early retirement of the subscriber or his spouse or partner of pacs

  • The invalidity of the subscriber or the spouse or PACS partner (2 nd or 3 rd category of social security)

  • The cessation of a self-employed activity of the subscriber or his spouse or pacs partner following a judicial liquidation judgment

These exemptions apply to interest earned until the end of the year following the occurrence of one of the events mentioned.
Social security contributions are due and deducted at source except for the invalidity of the subscriber or his spouse (Instruction of the tax administration of December 28, 2007)

Taxation in the event of death

For estates opened from 22.08.2007 (TEPA law), the sums paid to the married or pacsé spouse (or under certain conditions to the brothers and sisters) are totally exempt from taxation and inheritance tax whatever the date of the payments and whatever the age of the contract ..

In the absence of a designated beneficiary, the sums (or securities paid) on the death of the insured are an integral part of his estate and are therefore subject to inheritance tax at the usual rate.

Life insurance contracts taken out October 13, 1998

Date of payments

tax system

Before 70 years
  • Up to € 152,500 per beneficiary: No tax
  • Between € 152,500 and € 852,500: Flat rate of 20%
  • Beyond 852.500 €: Flat rate of 31.25%
After 70 years
  • Up to € 30,500 (all beneficiaries): No tax
  • Beyond, taxation subject to inheritance tax (by relationship)
  • Exemption from interest and capital gains (only payments are subject)

Note :

We often hear that money must be invested in life insurance before the age of 70 because the taxation of life insurance after age 70 is less advantageous.
We would like to draw your attention to this remark, which may prove to be inaccurate if the amount of interest is very important and if life insurance represents a significant part of the deceased's assets.

Life insurance policies purchased before October 13, 1998

Date of the payments Date of the subscription of the contract Before the 20/11/1991 Since the 20/11/1991 Before the 13/10/1998 Exemption Exemption, if premiums paid before the 70 years of the insured Since 13/10/1998 Exemption up to € 152,500 per beneficiary
Flat rate of 20% then 31,25% beyond 852,500 € Exemption up to 152,500 € by beneficiary
Flat rate of 20% then 31,25% beyond 852,500 €

Taxation in case of annuity exit

The life insurance policy offers the possibility of taking out a life annuity and choosing this option during the life of the policy.
The annuity resulting from a life insurance contract is subject to taxation according to a fraction depending on the age of the annuitant at the time of the establishment of the annuity:

Age of Annuitant Taxable Annuity Fraction Up to Age 49 70% Age 50-59 50% Age 60-69 40% Age 70+ 30%

Note :

Do not forget to add the social levies on the payment of the annuity

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