Assurance-vie: deposits, withdrawals and transfers, the basic rules

With a assurance-vie policy, there is no limit on the amount of contributions you can make. You can contribute in three ways: through fixed periodic premiums, through lump-sum payments, or with a single premium. A withdrawal, whether total or partial, gives you back money: the insurer must pay it within two months. Transferring funds between investments, on the other hand, moves your savings from one investment option to another without leaving the policy.

This page deals with French assurance-vie contracts. It does not cover social security contribution rates, annuity payouts, the maximum advance percentage, the execution time for a transfer, or withdrawals from abroad. Social security contributions and withdrawals from abroad each have their own dedicated page.

Payouts: no ceiling, three options

According to service-public.gouv.fr, "there is no maximum limit for payments into a assurance-vie contract." However, there is a caveat: premiums must not be excessive in relation to your financial and family situation.

There is no minimum amount required for an initial payment. The contract may stipulate one for each premium.

The fees, payment by payment

Fees are deducted from the value of the invested funds. Service-public.gouv.fr distinguishes four types:

• application fees fixed, paid upon subscription; ;
• entrance fees deducted from each payment, either as a lump sum or proportionally; ;
• management fees : deducted throughout the duration of the contract; ;
• arbitration fees : deducted from the transferred sums.

This page does not provide any fee rates.

Buyback: total or partial

The right to redeem belongs solely to the policyholder.

Several partial redemptions are possible, up to the surrender value. Partial withdrawals can sometimes be scheduled. Each year, the insurer informs you of the surrender value of your contract.

The 2-month period

After your request, the insurer must pay the sums within 2 months. Beyond that, they accrue interest: the legal rate plus half for the first 2 months of delay, then double the legal rate.

Buyout compensation

When the contract provides for them, they cannot exceed 5 % of the mathematical reserve. They are prohibited when the redemption occurs more than 10 years after the effective date of the contract.

If a beneficiary has accepted the clause

If the beneficiary accepted the clause on or after December 19, 2007, you must obtain their consent to redeem the share. For acceptances made before this date, you retain the right to redeem the share, unless you signed a document clearly stating your intention to waive this right (service-public.gouv.fr). The drafting of the clause is explained on a dedicated page.

The advance: a loan, not a buyout

Some contracts allow for advances. An advance is a loan from the insurer, which must be requested in writing and repaid with interest. It is limited to a percentage of the surrender value: the official sources consulted for this page do not specify this percentage.

For tax purposes, advances are not taxable. An unrepaid advance is deducted from the amounts paid and may be considered a partial redemption subject to taxation.

Arbitrate: change investment vehicle without exiting the contract

Service-public.gouv.fr defines arbitrage as the operation of transferring all or part of one's savings from one investment vehicle to another. Arbitration fees may be charged on the transferred amounts. According to the AMF (document dated April 6, 2022), these fees only apply to multi-asset contracts.

This page does not provide a timeframe for the execution of an arbitration or the number of arbitrations without fees: no official source consulted specifies them.

The supports

A single-asset contract offers only one investment option. A multi-asset contract combines several options, including a euro fund and unit-linked funds (economie.gouv.fr). According to service-public.gouv.fr, unit-linked funds carry a risk of capital loss in exchange for potentially higher returns. A multi-asset contract must offer at least one SRI-labeled unit-linked fund, one Greenfin-labeled unit-linked fund, and one solidarity-based unit-linked fund (mandatory for contracts opened since January 1, 2022, according to the AMF). The difference in risk between euro funds and unit-linked funds has its own dedicated page.

The two management modes

With self-directed investing, you choose your own investments, and you can switch to managed investing at any time. With managed investing, the insurer determines your risk profile (conservative, balanced, or growth) based on your objectives and investment horizon.

What the buyback changes for tax purposes

As long as you do not redeem your investment, the gains are not subject to income tax. Gains from a redemption are taxed in the year of the redemption. Every redemption includes a portion of capital, which is tax-free, and a portion of gains. This page does not provide the formula for this allocation.

This withholding tax is not final: the final tax liability is settled in your income tax return. After 8 years, the 7.5% tax rate (%) depends on the total amount of premiums not refunded as a lump sum, paid across all your contracts: above €150,000, the relevant portion is taxed at 12.8% (%). An annual allowance of €4,600 (single person) or €9,200 (couple) applies to gains from contracts of 8 years or more, for all contracts held by the same taxpayer.

Seniority is calculated from the contract's effective date, as indicated on the insurer's documents. Premiums paid before September 27, 2017, and the social security contribution rate are not covered here; please see the dedicated pages. Regarding social security contributions, there is a specific schedule: they are deducted annually from the interest earned on euro-denominated investments, and only upon redemption of unit-linked investments.

Numerical example (fictitious profile)

Situation. A couple holds a policy opened 7 years ago. All premiums were paid after September 27, 2017, and the outstanding premiums amount to €100,000 across all policies; the couple has no other policies. They wish to make a partial withdrawal, with a profit of €12,000. Assumption: this profit will be the same in one year.

Issue. The contract will be 8 years old in a year. Does the buyout take place now or after the 8th anniversary?

Strategy. Compare the income tax on both dates, without opting for the tax brackets. Social security contributions are not included in this calculation.

Result.

Difference: €1,326 in income tax between the two dates. This profile is fictitious. The figures illustrate the mechanism and do not predict your situation: your share of gains, your other contracts, and your other income will change the calculation.

What changes depending on your situation

• The seniority of the contract, starting from its effective date.
• The date of payment of your bonuses (before or after 27/09/2017).
• The total amount of your unreimbursed premiums, in relation to the threshold of €150,000.
• Your situation: single or in a couple.
• The presence of an accepting beneficiary.
• Fees, any buyback compensation and any advance payment.
• Your tax residence: this page does not deal with buybacks from abroad.

The rule depends on your situation. No results are guaranteed.