What are the costs of life insurance


Contract highly appreciated by French savers who wish to build up assets, prepare for the future or their estate, life insurance is a contract capable of offering a perfectly correct return. In order not to impute this return, it is necessary to choose the best life insurance contract, namely a contract imposing a minimum of costs. Let’s take a look at all these costs and how to reduce them.

Life insurance entry and payment fees

When taking out a life insurance policy, the establishment with which you have taken out may impose entry fees. These entry fees apply specifically to the first payment. Because, remember, the opening of a life insurance contract is conditional on a first payment, as is the case, for example, for a PEL. The minimum amount of this first payment varies according to insurers and banks. Know that the entry fees for life insurance are not imposed by all establishments, a comparison is necessary.

Then we talk about remittance fees. These are fees which, as their name suggests, are applied to each payment. According to insurers, they can reach 5%, which is quite substantial. Once again, the life insurance payout fees are not systematic, it is possible to find life insurance free of charge charging the sums paid into your savings contract.

Our life insurance with no entry fees

Life insurance management fees

The management fees are calculated according to the capital invested and the gains generated by the interests according to the rate of return. They are billed annually, this is an important selection criterion when taking out life insurance.

The amount of life insurance management fees is highly variable. It will be different from one insurer to another, but also according to the mode of management. In general, it does not exceed 1%.

  • For free management of your life insurance contract, the costs vary between 0.3% and 1%;
  • For managed management or management under mandate, they are often closer to 1%.
  • If you opt for the fund in euros with a guaranteed capital, the management being simpler, the costs will be lower. On the other hand, with a multi-support contract which requires greater expertise, the management costs will be higher.

Be aware, this time, that it is not possible to find life insurance without management fees. On the other hand, it is quite possible, by comparing the offers, to find lower costs. Ideally, you can find a contract with management fees between 0.5% and 0.6%.

Our life insurance without mandate fees

Life insurance arbitration costs

Life insurance arbitration fees are only charged when you want to change your asset allocation. Clearly, if you wish to diversify your investment mediums for progressive investment, arbitration fees are charged. This does not concern the euro fund.

These arbitration fees can be charged in two ways:

  • A lump sum for each operation to different media;
  • An amount proportional to the capital invested in the financial media.

As with management fees, it is not possible to find a free life insurance. On the other hand, here again, you can perfectly well find a contract offering reduced fees to preserve your capital and not charge the return of the funds on which you invest.

Other types of fees

Entry, payment, management and arbitration fees are fees that are charged throughout the life of your insurance contract. Then, when leaving the contract, other life insurance costs will apply.

Life insurance inheritance costs

The taxation of life insurance is attractive if you are planning an estate. However, fees may apply depending on different parameters:

  • The beneficiary ;
  • The age of the subscriber at the time of the payments;
  • The amount of capital.

For payments made before the age of 70, each beneficiary of the life insurance policy benefits from an allowance of €152,500. For capital between €152,500 and €852,500, a 20% levy is applied. Beyond this amount, inheritance tax amounts to 31.25%. Note that surviving spouses or PACS partners are exempt.

For payments after 70 years, taxation is less favourable. The allowance this time is €30,500. Moreover, it is not applied for each beneficiary, but for all the beneficiaries of the life insurance contract. Beyond this amount, the capital becomes part of the estate and is subject to various fees. In addition, the taxation is different according to the beneficiaries. If it is a person who does not belong to the subscriber’s family, the taxation reaches 60%.

These life insurance costs are immutable and legal, comparing contracts will not get you a fee reduction. On the other hand, international tax treaties may provide for a tax exemption in France for life insurance for non-residents or specific methods for the calculation of inheritance tax.

Surrender and exit costs in life insurance

If you plan to build up capital to supplement your retirement income or benefit from available savings in the event of an unforeseen event, any partial or total redemption of your capital is subject to fees. These are scalable according to the redemption date. It is not the financial institutions that charge fees. It is, in fact, the taxation of life insurance.

The constituted capital is not taxed. Life insurance redemption or exit fees only apply to capital gains, ie interest generated by your contract.

The amount of life insurance costs in the event of redemption or exit depends on:

  • The date of subscription of the life insurance contract;
  • The age of the contract.

The taxation of life insurance for redemptions or exits concerning earnings from payouts are as follows.





Number of years held Earnings from deposits made up to September 27, 2017 Earnings from payments made after September 27, 2017
From 0 to 4 years old Integration of products with income tax + social security contributions of 17.20%
WHERE
Flat rate levy of 35% + social levies of 17.20%
Integration of products with income tax + social security contributions of 17.20%
WHERE
Compulsory flat-rate deduction of 12.80% + social deductions of 17.20%
From 4 to 8 years old Integration of products with income tax + social security contributions of 17.20%
WHERE
Flat rate levy of 15% + social security deductions of 17.20%
Integration of products with income tax + social security contributions of 17.20%
WHERE
Compulsory flat-rate deduction of 12.80% + social deductions of 17.20%
Over 8 years old Annual allowance on the share of interest up to €4,600 for a single person or €9,200 for a couple
THEN
Integration of products with income tax + social security contributions of 17.20%
WHERE
Flat rate levy of 7.5% + social levies of 17.20%
Annual allowance on the share of interest up to €4,600 for a single person or €9,200 for a couple
THEN
Flat-rate deduction of 7.50% + social security deductions of 17.20% for gains from the first €150,000 paid
WHERE
Flat-rate deduction of 12.80% + social deductions of 17.20% for earnings from payments over €150,000
WHERE
Integration of products with income tax + social security contributions of 17.20%

Why Choose Free Life Insurance?

The choice of a free life insurance necessary to avoid impacting your capital. All fees charged by insurance companies only reduce the return on your life insurance.

Let’s take the example of remittance fees. The financial institution charges you a deposit fee of 3%. You have chosen a euro fund with a yield of 2%. It’s hard to imagine the profitability of such a contract when your costs are higher than your return. Concretely, with such management fees for your life insurance, by paying 100 €, only 97 € will constitute your capital. If, to this, you add management fees, taking out life insurance has almost no interest if your only ambition is to build up capital and make your money grow. This contract will become interesting only if you wish to benefit from the advantageous taxation of a life insurance contract within the framework of an inheritance.

To find life insurance free of charge, you should preferably turn to online life insurance. The contracts offered are often free of entry and payment fees and among the best life insurance on the market. This does not prevent you from claiming attractive offers with attractive returns and a wide choice of financial supports.

Discover our range of life insurance

Contact a Meilleurtaux Placement advisor

Frequently asked questions about life insurance costs

Can life insurance costs be avoided?

Yes, but not all fees. You can take out a life insurance contract with no entry and payment fees, such as Meilleurtaux Liberté Vie. On the other hand, arbitration and management fees are still applied. However, it is possible to find contracts offering lower fees, in particular the life insurance contracts of Meilleurtaux Placement, by making a comparison of life insurance.

What are the recurring costs of life insurance?

The recurring costs of life insurance are the management fees, they are billed annually. If you have chosen life insurance with an installment fee, again this is a recurring fee that will be charged with each payment on your insurance.

How to calculate life insurance management fees?

Life insurance management fees are calculated based on the capital invested and the interest generated. Do not hesitate to ask your insurer to make you a simulation to determine their impact on your capital.

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