Buying life insurance is entirely possible for policyholders. It should be remembered here that this investment formula differs from the others in that it remains the preferred medium or long-term asset base for French savers. With a rather complex taxation, one can also envisage the subscription of a life insurance in order to constitute an inheritance for the purchase of a property. Overview.
How to proceed ?
We cannot say too much about it, it is a right referred to in article L. 132-23 of the insurance code redeem life insurance, totally or partially. To do this, you must contact your insurer by sending him a registered letter by post with acknowledgment of receipt including the latest situation and a RIB (Bank Identity Declaration). We encourage you to specifically study the terms and conditions in more detail on the blog titled as simple as possible Purchase of life insurance.
In theory and in practice, the insurance company with which you have concluded the contract has a maximum of two months from the receipt of the letter to make the payment into your account. Also, know that after the two-month period the unpaid sums produce the so-called interest at the legal rate, a bit like an unpaid invoice.
In the event of partial redemptions, we encourage you to make your own calculations for the taxable interest. In fact, from the elements provided by your life insurance company, it is quite simple to apply this mathematical formula as your insurance advisor is sure to do:
From the Partial Redemption Amount, subtract the total payments made to date multiplied by the Partial Redemption Amount that you divided by the Total Redemption Value of the Policy on the Redemption Date. This is :
MRP – (TVDR x MRP) / VRTCDR
Where MRP: partial repayment amount,
TVDR: total payments on the repayment date,
VRTCDR: Redemption value of the contract on the redemption date.
The legal framework for the redemption of life insurance
When you entered into your contract, the proposal made by your insurer had to indicate the surrender values during the first eight years at least. In addition, the deducted rents must be contractually specified and the savings acquired, if it is equal to or greater than 2000 euros, makes your insurance taxable to specify the exact surrender value. This reality of contracts leads many subscribers to terminate their savings beyond eight years.
Where sometimes the withdrawal gets complicated, most of the time when for processing reasons the insurance charges you operating costs that are too high compared to the amount withdrawn, you have to think about it. One of the tricks to avoid having these problems is also to proceed to arbitration.
If, as a good manager of your assets, you have carried out a real diversification and your savings are divided between different units of account (the fund in euros remains the least risky), a partial refund will be made automatically proportional to the value of the units of each investment. It is therefore a key element in your calculations.
Finally, there remains the question of the taxation of the sums collected. Therefore, we encourage you to read or reread this article from Figaro showing the tax table relating to the period in which you are making your withdrawal. Note that there are tax optimization solutions on this topic.