Everyone wants to protect his family, especially the husband and children. For this reason, when we reach a certain age, we are interested in savings products aimed at securing the financial future of our half and/or offspring. Very often, the French turn to life insurance. A reaction that can be easily explained in light of the advantages of life insurance. However, other insurance policies exist to protect loved ones. If the French have less recourse to it, they are very interested in considering temporary death insurance. This product may actually be more convenient than life insurance. It must be said that the process of temporary death insurance is completely different. It is not about accumulating savings that the subscriber can redeem or pay out to the beneficiaries. It works like insurance and has the peculiarity, as the name suggests, of being temporary. To fully understand this insurance, before deriving benefits, you should know that this guarantee is generally contracted for a period of one or five years with the possibility of renewal. The subscriber pays the contributions, and if he dies while the contract is still in force, the beneficiaries he has appointed may be given a capital or an annual salary. If, at the end of the contract, the subscriber is still alive, the insurance company will keep the contributions without compensation.
The first advantage of temporary death insurance: financial shelter for designated beneficiaries. While building protection for your family can often be very expensive, this is not necessarily the case here. Some already save on life insurance or other banking products. Others invest in real estate. But the amounts involved must be large and generally capitalized over many years. By subscribing to this type of insurance, you contribute as you give, but in the event of a fatal accident even after a few days of registration, the appointed persons will be able to benefit from a capital or an annuity. So it is ideal for ensuring the financial security of her husband or wife, or even the study of their children, for example. Be careful, however, that dying by suicide or after taking drugs or doing extreme sports will not result in a capital payment.
Flexibility because death insurance can pursue several goals. As mentioned, it may just be a matter of ensuring the standard of living of those close to them. But sometimes, this insurance is required to be used as part of a mortgage. Sometimes the financing organization asks for a guarantee for the borrower. In addition, the company can also take out death insurance for one of its directors if it considers that his premature death could impair the business of the business.
Flexibility then because the term death insurance is personal. The member, of course, chooses the beneficiary(s) of the contract, but also determines the amount of the premium to be paid in the event of death during the term of the contract, specifically, the expiry date of the insurance. In addition, the insured can pay the contributions as he sees fit, in one form or another.
Finally, flexibility because the beneficiaries will also have the option to do in the event the insured dies during the term of the contract. They will be able to request the full repayment of the principal or demand the payment of the annual installments.
While the premium for life insurance in theory may be taxable, in reality, few beneficiaries have to pay tax when they receive a payment from this insurance. First, when the beneficiary is a husband/wife, married or in a civil partnership, he/she benefits from the full exemption. All other beneficiaries have a provision that varies according to the age of the insured when the premiums are paid. Before the age of 70 it reaches 152,500 euros per beneficiary. As a result, they are often exempt from taxes. If the amount received exceeds this limit, the discount rate is 25%, or even 31.25% if the capital exceeds 700,000 euros. Regarding the installments paid after 70 years, they consolidate the inheritance and the allowance is reduced to 30,500 euros. Thus, these exemptions and allowances allow most recipients of temporary death insurance not to pay taxes. For the insured, this is a good way to pass on their assets indirectly without being taxed. There are few inheritance products that offer such a mechanism for tax exemption.
(By the agency’s editorial board hREF)