AXA Assurances
Agence 3B Assur
4, rue Alberti - BP 1736
F - 06016 NICE cedex 01
Tel +33 4 93 92 16 32
Mobil +33 6 73 04 60 57
Fax +33 4 93 13 48 67
E-mail: info@steenandersen.net
 
   

F A Q

 
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What is understood by “life insurance” in France?
 
  

Despite the name, life insurance is actually a savings product with a slight touch of insurance. Among the French, it is the preferred vehicle for saving tax and planning distribution of inheritance. The tax benefit is due to the fact that no tax is due upon return on the savings until the day the returns are actually withdrawn by the policy holder. After 4 years, returns can be withdrawn at a reduced tax rate, which is further reduced after 8 years. On top of this, inheritance duties can be fully or partly avoided through a life insurance scheme.

   
   
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What are the advantages of a life insurance scheme with AXA?
   
 
  • No commitments - you can pay as little or as much as you want into the scheme, at once, monthly or when there is room in your budget.
  • Your money is always available - you can withdraw your money at any time without paying any fees or dues to AXA. Alternatively, the insurance contract can be used as collateral for a loan.
  • Flexibility - your choice of underlying investment funds can be adapted at any time, if your personal situation or expectations for the financial markets change. The duration of the contract can be changed as well.
  • Safety - in case the policy holder dies before his 70th birthday the beneficiaries will always, as a minimum, receive the original sum invested, no matter what has happened on the financial markets.
  • Tax relief - after 8 years pay out of return on capital beyond 4,600 euro is taxed at 7.5%, compared with a normal tax rate of up to 52.5%. For married couples, the tax free limit is 9,200 euro. In addition, 10% is deducted as social contributions. Capital is always paid out without deductions. At the expiry of the contract, the balance can be converted into a life annuity of which only 30% is subject to taxation. (For clients who are yet to turn 70, 40% is subject to tax.)
  • Exoneration of inheritance duties - for amounts paid in before the age of 70, the first 152,500 euro are exempt of inheritance duties. This amount applies to each beneficiary! The balance is subject to 20% duty which in some cases could be a relief. For amounts paid in after the age of 70, 30,500 euro are exempt. The remainder is subject to normal inheritance duties with the important exception that all returns are exempt. Please note the beneficiaries need not be close family.
  • 100% legal - whether you invest your money on remote islands, in European countries without decent soccer teams or through a life insurance scheme with AXA, everything is to be included on your French tax declaration. Often people forget, which causes awkward moments when French tax authorities ask how a certain lifestyle, a new car or an extension of the house have been financed. If you don’t experience this awkward moment, your heirs may very well do. A carefully planned life insurance scheme will help you avoid this.
   
   
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How is my money invested?
   
 

AXA currently markets 11 investment funds starting with low risk investment in short-term euro bonds issued by EU governments. Each year a minimum return is guaranteed. For 2003 clients will receive a net return of 5% or more. Other options are equity funds investing in France, Europe or internationally. A real estate fund is also available. The offering is adapted and developed on an ongoing basis, so please ask for the latest update.
You as a client decide how to distribute your savings between the investment funds. At any time, money can be moved from one fund to another

   
   
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What happens if funds are withdrawn before contract expiry?
   
 
During the first four years, paid-out return is taxed normally, i.e. either you declare it on your tax return or you pay a once-and-for-all tax of 35% when making the withdrawal. After four years but before eight years, this rate drops to 15%. In both cases you should also calculate 10% social contributions.
   
 
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What happens if I leave France for good? 
 
  

The contract will still be valid, but pay-outs will be exempted from French social contributions. Amount paid into the scheme before the age of 70 will be exempt of French inheritance duties. Amounts paid in after this date will be subject to French inheritance duties with the exception of 30,500 euro plus all return earned.

   
 
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Can I take out a life insurance contract before moving to France? 
 
  

Yes. This is of particular interest in case you want to finance a property in France with a loan from a French bank. The bank will usually require some sort of insurance to make sure they get their money back, in case you die before the loan is fully repaid. A life insurance scheme would serve not only this purpose, but also help you create a nest egg for your retirement or other projects, but obviously you would need to have the cash available to pay into the scheme in the first place.

   
 
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Who is AXA and what do they know about investing? 
 
  

AXA is one of the world’s three largest investment managers with more than 900 billion euro under management.

   
   

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