Make capital grow, speculate on the stock market or obtain additional income, for example in anticipation of old age… Life insurance fulfills all these goals. Savers have understood this well: more than 45% of households have had at least one contract, sometimes for decades. Problem: Over time, its quality may have decreased (selection of funds not renewed, less relevant advice, website never updated, etc.). In terms of the yield served, it is no longer necessarily as competitive as it was 5 or 10 years ago, as a certain number of companies have made a habit of abandoning their old envelopes in favor of the latest versions, which are lighter to promote. attract new customers.
For a long time, a disgruntled insured had no choice but to cancel his contract and go and place his balls elsewhere. In 2005, the Fourgous system authorized holders of a mono-subsidy (a single fund, in euros) to repatriate their savings into a multi-subsidy, provided with diversified funds (stock market, real estate, commodities, etc.), which is therefore more dynamic. The 2019 Covenant Act went further and allowed the transfer of any existing contract to another deemed more effective. “This at the same time as maintaining the tax prerequisite”, specifies Maxime Camus, general manager of Grisbee.
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A fundamental point when we know that this investment only becomes beneficial in this respect after eight years of holding: after withholding the inevitable 17.2% in social security contributions, the gains are subject to a reduced flat tax of 7.5%, and after a large annual allowance (4,600 euros for a single person or 9,200 euros for a married couple or PACS couple), which usually removes the tax due. The only concern, but a big one: the transfer of life insurance can only take place with the same insurance company (impossible to compete), and, the law clarifies, with the consent of the latter… Which, of course, removes great interest in the measure that was adopted . And explains why many transfers are blocked.
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life insurance transfers
(1) Estimated number. (2) Cases of simple transfers or from lodging establishments. (3) Cases of complex transfers or departures from places of non-accommodation. Sources: France Insurers, Capital. Number of transfers in 2022 (1) Legal deadline to meet Average transfer deadline (2) Maximum transfer deadline to expect (3)
The possible procedure
Any life insurance policy holder with whom he is not satisfied now has the right to ask his company to change it. This option is not accompanied by any condition on contract type (mono-support or multi-support), seniority of subscription, minimum payments or distribution network (insurance agent, mutual insurance company, online broker, association of savers …). However, the legislator has set three conditions: the new contract must be administered by the same company, it must offer risk-averse funds (not just a fund in euros) and its opening must be accepted by both parties, of course the insured, but also the insurer (which thus has the right to refuse the client’s request).
If the conditions are met, the transfer is carried out either by amendment or by entering into a new contract free of charge and within a period varying between 2 months (legal period that must normally be observed) and 6 months (maximum time noted). Notice to tax exemption fans: Until December 31, 2022, life policies for more than 8 years can also be transferred to a PER, provided there are more than 5 years from retirement. The operation gives you the right to deduct the transferred amounts from your income (up to a limit of 32,909 euros) plus an exemption for contract gains of up to 9,200 euros (18,400 euros for a couple), i.e. double the usual rejection.
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The traps that await you
The reasons that insurance companies give to justify a refusal to transfer are many and varied. In particular, there is the coup of the new contract, which would not correspond to the profile of the insured’s father, that of the collective contract (signed through an association), which, if transformed into an individual contract (concluded directly between the insured and the insurer) , would risk a tax requalification due to a subscriber change, and therefore the transferred amount is subject to tax.
Changing distributors, for example from an online bank (Boursorama, Fortuneo, etc.) to a specialized broker (Altaprofits, Assurancevie.com, etc.), also poses a problem. “Insurers are reluctant to strip one distributor in favor of another,” explains Stefan de Quelen, CEO of Meilleurtaux Placement.
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It is also impossible to access the insurance company’s top-of-the-range contracts, which are available for more than 100,000 euros stake, and which come from a standard contract that is only topped by a few thousand euros. In general, asking to take advantage of a contract that pays much better than yours (or charges much less) will rarely be seen in a good light…
Tips for a successful life insurance transfer
It is sometimes enough to protest loudly and clearly on the phone, then send a letter, text of the Pacte Act in support, to convince a recalcitrant underwriter to carry out the requested transfer. Threatening him to inform the Prudential Control and Resolution Authority (ACPR) about the block or to seize the insurance broker (Mediation-assurance.org) can also be effective. However, avoid rushing if you are invested in volatile media, especially the stock market.
In fact, as in the case of PER, the money will only be reused on the new contract when the funds from the old life insurance have been completely resold by your account administrator: beware of capital loss if you start the operation at the wrong time , in other words right after a drop in prices! Transfer must even be prohibited in certain cases.
For example, if your contract, which is very old, comes with a guaranteed return of 3 or 4% (current rates struggle to reach 1.50%). Or if you are totally allergic to risk, knowing that most insurance companies, such as Suravenir, Spirica or Apicil, have limited access to their funds in euros, requiring a minimum of savings – from 20 to 50% – or transferred for non-guaranteed media (equity funds, SCPIs, ETFs, etc.).