Analysis · Financial investments
Assurance-vie: how French life insurance is taxed on withdrawals, at death and across borders
Assurance-vie is France’s most widely used savings wrapper. It is neither a single investment nor an automatic tax exemption: its value depends on the funds inside it, the dates of each payment, the beneficiary clause and the tax residence of everyone involved. This guide sets out the 2026 rules for international readers.
Key points
- Withdrawals are taxed only on their gain portion; after 8 years an annual allowance applies for French tax residents.
- At death, premiums paid before age 70 fall under article 990 I (€152,500 allowance per beneficiary); premiums paid after 70 fall under article 757 B, with a single €30,500 allowance shared by all beneficiaries.
- For non-residents and international families, French rules are only half the picture: the tax residence of the insured and of each beneficiary, and any applicable treaty, must be checked.
What an assurance-vie actually is
An assurance-vie is a contract with an insurer. The policyholder (souscripteur) pays premiums, usually on the life of an insured person (assuré) who is generally the policyholder; at the insured’s death, the capital is paid to the beneficiaries named in the beneficiary clause. During the insured’s lifetime, the policyholder can withdraw money at any time.
The contract is a wrapper. Two families of investments can sit inside it:
- The euro fund (fonds en euros), managed by the insurer, with a capital guarantee defined by the contract. Depending on the contract, the guarantee may be net of management fees, so “guaranteed” does not always mean 100% of the amount paid in. Returns are not known in advance and may lag inflation.
- Unit-linked funds (unités de compte): UCITS, ETFs, real-estate vehicles or other eligible assets. They carry no capital guarantee; their value can fall. Some, such as real-estate or private-market vehicles, can also have limited liquidity.
Our long-standing view has not changed: the contract is an envelope offering a tax framework, within which many investment strategies are possible. Performance comes from the assets held and the total fees paid — the contract’s fees, the funds’ own costs and any management mandate — not from the wrapper itself.
Access to your money: withdrawals and advances
A partial or total withdrawal (rachat) returns part or all of the contract value. A withdrawal is not taken from one specific fund’s gains: each euro withdrawn contains capital and gain in the same proportion as the whole contract.
Some contracts also offer an advance (avance): a loan from the insurer secured on the contract, which bears interest and must be repaid. An advance is not a withdrawal, but it is a borrowing decision with its own cost and contractual conditions, not a tax device.
How withdrawals are taxed for French tax residents
Only the gain portion of a withdrawal is taxable. For premiums paid since 27 September 2017, the income-tax treatment depends on the age of the contract at the time of the withdrawal and on the total premiums you hold across all your contracts:
| Contract age | Total premiums up to €150,000 | Total premiums above €150,000 |
|---|---|---|
| Contract under 8 years | Gains taxed at 12.8%, or at the progressive income-tax scale if you opt for it globally | Same |
| Contract of 8 years or more | Annual allowance of €4,600 (single) or €9,200 (couple), then 7.5% | Allowance, then 7.5% on the share of gains linked to premiums up to €150,000 and 12.8% above |
- The €150,000 threshold is assessed on the premiums not yet repaid across all of a person’s contracts, not contract by contract.
- Social levies apply on gains in addition to income tax: 17.2% in the general case for life-insurance gains. On the euro fund they are usually deducted each year when interest is credited; on unit-linked funds they are generally collected on withdrawal or at death.
- Premiums paid before 27 September 2017 follow earlier rules; older contracts deserve a line-by-line review rather than a generalisation.
Sources: Service-Public.fr — Taxation of life-insurance income (checked 15 April 2026) · impots.gouv.fr — Withdrawals by non-residents (updated 26 February 2026)
Non-resident policyholders
If you live outside France, withdrawals from a French contract are subject to a compulsory final withholding by the insurer: 12.8% on gains if the contract is under 8 years old and 7.5% if it is 8 years or older, under the rates in force on 1 January 2026. A tax treaty may reduce this rate; a 75% rate applies when payments are made in a non-cooperative state or territory. People whose tax residence is outside France are not subject to French social levies on this investment income.
That is only the French side. Your country of residence may tax the contract under its own rules — sometimes annually, sometimes on withdrawal — and may not recognise the French tax advantages of the wrapper. Some insurers also limit new payments or new contracts for residents of certain countries. Before relying on an assurance-vie abroad, check how it is treated where you live.
What happens at death
In principle, the capital paid to a designated beneficiary does not form part of the deceased’s estate under French civil law. This is often summarised as “outside the estate”, but the summary is incomplete. The capital can be brought back into the estate or into the matrimonial community, for example:
- when no beneficiary has been designated, or none can receive the capital;
- when the policyholder dies without being the insured: the contract continues and its surrender value forms part of the policyholder’s estate;
- for married or PACS couples, when a contract funded with community assets is still running at the death of one partner, its surrender value belongs to the community, so half of it is added to the estate;
- when premiums were manifestly excessive in relation to the policyholder’s age and means, which heirs can challenge in court.
For tax purposes, two separate regimes apply depending on when the contract was opened and when each premium was paid:
| Premiums paid before 13 October 1998 | Premiums paid from 13 October 1998 | |
|---|---|---|
| Contract opened before 20 November 1991 | Not taxable | 990 I: €152,500 per beneficiary, then 20% / 31.25%, whatever the insured’s age at payment |
| Contract opened on or after 20 November 1991 | Before 70: not taxable · After 70: 757 B | Before 70: 990 I · After 70: 757 B |
A surviving spouse or PACS partner is exempt under both regimes. Other beneficiaries — children, siblings, unrelated persons — are taxed according to the rules below.
Premiums paid before age 70: article 990 I
Each beneficiary receives an allowance of €152,500, assessed across all contracts on the life of the same insured. Above that allowance, the levy is 20% on the taxable share up to €700,000 and 31.25% on the excess. It is calculated on the capital received — gains included — and deducted by the insurer before payment.
Premiums paid after age 70: article 757 B
Premiums paid after the insured’s 70th birthday on contracts opened since 20 November 1991 are subject to French inheritance duties, according to the family relationship between the beneficiary and the insured, but only for the fraction of premiums above a single €30,500 allowance. That allowance covers all contracts on the life of the same insured and is shared between the non-exempt beneficiaries in proportion to their share of the taxable premiums. It is not €30,500 per beneficiary.
The growth generated by those post-70 premiums is not subject to inheritance duties under article 757 B. The taxable premiums are then added to what the beneficiary receives from the estate, and the beneficiary’s ordinary inheritance allowance may still apply if it has not already been used.
Sources: Légifrance — CGI article 757 B (in force since 11 March 2023) · Légifrance — CGI article 990 I (in force since 11 March 2023) · BOFiP — BOI-TCAS-AUT-60 (30 March 2023) · impots.gouv.fr — How are life-insurance benefits taxed for the beneficiary? (international section)
Cross-border families
Whether French tax applies at death depends on residence. According to the French tax administration, the 990 I levy is not due when the insured was tax-resident outside France at the date of death, unless the beneficiary is resident in France at that date and has been tax-domiciled in France for at least six of the ten preceding years. Article 757 B follows French inheritance-tax territoriality rules, and an estate-tax treaty may change the outcome. Your country of residence may also tax the benefits. A beneficiary clause that works in a purely French situation can produce a very different result once one family member lives abroad.
The decisions that matter
- The beneficiary clause. Name beneficiaries clearly, with ranks and what happens if one dies first. Standard wording is not always suited to blended families, international families or a desire to split usufruct and bare ownership; complex clauses deserve notarial-level drafting.
- Payments before or after 70. Paying in after 70 remains possible and can be useful, because only premiums enter the 757 B base. Keeping pre-70 and post-70 money in separate contracts makes the tax history easier to follow.
- Old contracts. An older contract can carry a valuable tax history even if its fees or fund range are no longer competitive. Keeping a contract and continuing to fund it are two different decisions.
- Investments. The allocation between the euro fund and unit-linked funds should match your horizon, the cash you may need and the risk you accept — not the tax regime alone.
Risks and limits
- Unit-linked funds can lose value; the insurer does not guarantee them.
- Several layers of fees — contract, funds, possible management mandate — can absorb a large part of the return.
- Euro fund returns can fall below inflation.
- Tax rules change; the regimes described here are those in force in October 2026.
- For an international family, French advantages do not travel automatically.
How OptiFi can help
OptiFi is an independent wealth-advisory firm in Nice. We review existing contracts — dates, premium history before and after 70, fees, fund range and beneficiary clause — and place them within your overall wealth, retirement and estate plan, including when your family lives in several countries. Recommendations are given within a written engagement.
Further reading
- Luxembourg life insurance
- Estate planning in France
- Investing your wealth
- Tax advice in France: wealth planning and tax-efficient investing
Sources and references
Official French sources, consulted in October 2026. Titles of French documents are given in English for convenience.
- Légifrance — CGI article 757 B (in force since 11 March 2023) — Inheritance duties on the fraction of premiums paid after age 70; single €30,500 allowance for all contracts on the life of the same insured.
- Légifrance — CGI article 990 I (in force since 11 March 2023) — Levy on death benefits outside the 757 B regime: €152,500 allowance per beneficiary, 20% then 31.25%.
- BOFiP — BOI-TCAS-AUT-60 (30 March 2023) — Official commentary on the 990 I levy: scope, tax base, 20% on the taxable share up to €700,000 and 31.25% above, territorial rules.
- BOFiP — BOI-ENR-DMTG-10-10-20-20 (30 March 2023) — Insurance contracts and inheritance duties: scope of article 757 B and determination of the taxable premiums.
- impots.gouv.fr — How are life-insurance benefits taxed for the beneficiary? (international section) — Summary table by subscription and premium dates, pro-rata sharing of the €30,500 allowance, residence conditions of the 990 I levy, exceptions to the “outside the estate” principle.
- impots.gouv.fr — Withdrawals by non-residents (updated 26 February 2026) — Compulsory final withholding of 12.8% (under 8 years) or 7.5% (8 years or more), treaty reductions, 75% for non-cooperative states, no French social levies for non-residents.
- Service-Public.fr — Taxation of life-insurance income (checked 15 April 2026) — Withdrawal taxation for French residents, €4,600 / €9,200 allowance, the €150,000 premium threshold and 17.2% social levies on life-insurance gains.
- impots.gouv.fr — Declaring life-insurance benefits as a beneficiary — Form 2705-A, filing deadlines and the role of the beneficiary after a death.
Frequently asked questions
Is the €30,500 allowance for premiums paid after 70 per beneficiary?
No. Under article 757 B of the French tax code, €30,500 is a single global allowance for all contracts on the life of the same insured person. It is shared between the beneficiaries who are not exempt, in proportion to their share of the taxable premiums.
How much can each beneficiary receive tax-free from premiums paid before 70?
Under article 990 I, each beneficiary has a €152,500 allowance covering all contracts on the life of the same insured. Above it, the levy is 20% on the taxable share up to €700,000 and 31.25% beyond. A surviving spouse or PACS partner is exempt.
Are the gains on premiums paid after 70 subject to inheritance tax?
Under article 757 B, inheritance duties apply only to the premiums paid after 70, above the global €30,500 allowance. The growth attributable to those premiums is not subject to inheritance duties under 757 B, although social levies on gains may still be due.
Is assurance-vie always outside the French estate?
Not always. Benefits paid to a designated beneficiary are in principle outside the estate for civil-law purposes, but they can be brought back in, for example when no beneficiary is designated, in certain community-property situations or when premiums were manifestly excessive in relation to the policyholder’s means.
How is a partial withdrawal taxed?
Only the gain portion of the amount withdrawn is taxable. For a French tax resident and premiums paid since 27 September 2017, gains withdrawn after 8 years benefit from an annual allowance of €4,600 (single) or €9,200 (couple filing jointly), then 7.5% or 12.8% depending on total premiums, plus 17.2% social levies in the general case.
Is my money locked in for 8 years?
No. A standard contract can be partly or fully surrendered at any time. Eight years is a tax milestone, not a lock-in period.
Can a non-resident keep or open a French assurance-vie?
A contract can often be kept after moving abroad, but acceptance of new contracts or new payments depends on the insurer and the country of residence. French withholding applies on withdrawals, a tax treaty may reduce it, and the country of residence may tax the contract under its own rules.
Does the euro fund guarantee 100% of capital?
Not necessarily. The guarantee is defined by the contract and may be net of management fees. Unit-linked funds carry no capital guarantee.
First published 30 July 2021; substantially revised in October 2026. This page provides general information only and is neither investment advice nor personalised tax or legal advice.