There are three main life insurance options in France for leaving a capital sum to your partner or children.

Assurance Vie

The traditional route for many French people and some expats is to take out assurance vie.

However, this is less a death policy than a tax advantageous investment product that offers a net return of around 3.5% pa.

The advantage of assurance vie is that you can draw down income against the policy, and only the growth element of the withdrawal is taxable.

The problem with such policies is that they do not necessarily ensure a large capital sum on your death. Thus, if you deposited into an assurance vie policy a sum of around €500 per month, it would probably take around 15 years before the policy yielded €100,000.

Accordingly, if you died unexpectedly early, your surviving partner would not receive a large capital sum.

Nevertheless, if you do arrive in France with a large sum of capital and want to know what to do with, it is no bad idea to take out such a policy for the tax and income benefits it brings.

That said, the tax advantages of this investment product are currently under review by the French government, so it remains to be seen just how long it retains its superiority over most other types of investments.

Provided you take out a contrat d'assurance vie en euros then your capital is guaranteed.

Those that do not guarantee the capital and depend on the performance of a share portfolio are called contrats multisupports.

Assurance Décès.

Death policies in France are known as assurance décès.

There are two types of such policies.

i. Assurance vie entière

This is a death policy that pays out a capital sum at the end of the fixed term of the policy.

So whether you die in two months or in twenty years, the insurer will pay out the sum for which you have subscribed in the policy.

The problem with it is that it is an expensive policy to take out.

Thus, for a lump sum of €100,000 a male of 60 years would expect to pay around €7,000 per annum. There is also often an age limit to these policies, as well as health checks.

ii. Assurance décès temporaire

A cheaper way of ensuring your partner or children obtain a fixed sum is to take out assurance décès temporaire.

These policies normally have a life of one year.

So, with this policy, you choose the capital sum you seek, which will be paid to the beneficiary in the event of death in the year.

A male of aged 60 could expect to pay around between €1,500 and €2,000 a year for a policy that would provide a capital sum of €100,000.

Once again there are age limits – normally up to 75 years – as well as a health examination.

Tax Relief

The lump sums payable under all these policies are neither subject to income tax or inheritance tax. In the latter case up to €152,500 per beneficiary.

You can read more about assurance vie at Life Insurance in France.