In short…
The capitalisation contract is life insurance’s little-known twin: the same surrender taxation, the same €4,600 / €9,200 allowances after 8 years, the same 7.5% levy. What most people miss is that its apparent flaw — it falls into the estate, having no beneficiary clause — is in fact its weapon: it can be gifted during your lifetime while keeping its tax seniority. It is also the only contract of its kind that a company subject to corporation tax can hold, which makes it the reference tool for corporate cash.
- Surrender taxation identical to life insurance, €4,600 / €9,200 allowance after 8 years, then 7.5% + 18.6%
- Transferable by gift while keeping its tax seniority, ideal for bare-ownership / usufruct dismemberment
- Available to a legal entity, the only wrapper of its kind open to a company subject to corporation tax or a wealth-holding company
Simulate your capitalisation contract
The projection applies the taxation of a surrender after 8 years, identical to life insurance. Your data is neither stored nor transmitted.
Capitalisation contract simulator
Project your capitalisation contract, its gain and its taxation — the cousin of life insurance that can be passed on.
Results are provided for purely illustrative and educational purposes, based on the parameters you enter and simplified assumptions (2026 taxation, constant return, excluding inflation). They constitute neither personalised investment advice, nor tax advice, nor an offer to subscribe. Some investments carry a risk of capital loss. Before any decision, speak with an advisor.
Why the capitalisation contract is the blind spot of wealth saving
Life insurance dominates the saver’s mind: it is the French household’s leading financial asset, distributed en masse by the banking networks. Its cousin, the capitalisation contract, remains largely unknown to the wider public — not because it is inferior, but because it answers questions that mass distribution does not address: organised transmission, dismemberment, and the investment of corporate cash.
Throughout the life of the contract, the two wrappers are twins: the same surrender taxation, the same €4,600 (€9,200 for a couple) allowance after 8 years, the same 7.5% levy on the portion corresponding to premiums paid up to €150,000. A saver who simply grows a sum of money will see no difference in practice.
The difference plays out on death — and that is where the capitalisation contract reveals its singularity. Life insurance is settled outside the estate via the beneficiary clause. The capitalisation contract, by contrast, falls into the estate and is passed on under ordinary law. What looks like a drawback becomes, in the hands of an advisor, a lever for advance transmission and a corporate tool.
The 3 uses your bank adviser will not offer you
Lever 1 — the gift that keeps tax seniority
Unlike life insurance, the capitalisation contract can be gifted during your lifetime, in full ownership or in dismemberment, while keeping its tax seniority. In practice the recipient inherits a “dated” contract: if it has already passed the 8-year mark, their future surrenders immediately benefit from the allowance and the reduced rate, without starting from scratch. You thus pass on capital that is already tax-optimised, where most cash gifts force the heir to rebuild their own seniority.
Lever 2 — bare-ownership / usufruct dismemberment
You can gift the bare ownership of the contract to your children while keeping the usufruct, and therefore the income. The gift partly settles the duties, the usufruct valuation scale reduces the taxable base according to your age (the earlier you give, the lower the base), and on death the usufruct is extinguished with no further duties: your children become full owners free of charge. Unlike life insurance, no age threshold (the famous 70 years) changes the picture — the strategy stays consistent whatever your age.
Lever 3 — investing corporate cash
A company subject to corporation tax — a wealth-holding company, an SCI taxed under corporation tax — cannot take out life insurance, but can hold a capitalisation contract. It is the reference solution for placing a company’s surplus cash on diversified investments rather than leaving it idle in a current account. The taxation is specific: an annual flat-rate charge on a theoretical base, settled on surrender. For a director sitting on corporate cash, it is often the first optimisation reflex — and a subject mainstream advisers never raise.
Worked example — Henri, 67, retired notary in Aix-en-Provence
Henri holds €300,000 in cash and wants to plan the transmission to his two children while keeping an income. He takes out a €300,000 capitalisation contract, lets it grow at 4.5% net for 5 years to pass the 8-year mark, then gifts the bare ownership in dismemberment. Here is what the simulator and the strategy project:
| Step | Mechanism | Patrimonial effect |
|---|---|---|
| Subscription at 67 | €300,000 invested at 4.5% net | Capital at work, tax seniority running |
| Capital projected at 8 years | ≈ €426,000 | Gain capitalised free of tax |
| Bare-ownership gift | Usufruct retained, taxable base reduced by the age scale | ≈ 60% of value transmitted depending on age |
| On Henri’s death | Extinction of the usufruct | Full ownership to the children, no further duties |
Illustrative example — figures simplified for clarity and not contractual.
Henri keeps the usufruct, and therefore the contract’s income until his death, while having transmitted the bare ownership at a value reduced by the usufruct scale. The contract retains its seniority: his children inherit a wrapper already past the 8-year mark, immediately optimised for their future surrenders.
This case illustrates what life insurance cannot do: organise a transmission during your lifetime, gradual and reversible in its timing, without the cliff edge of the 70-year rule. The capitalisation contract is not just another investment — it is a transmission tool in its own right.
Capitalisation contract or life insurance: the real difference
During the life of the contract, none: the same surrender taxation, the same €4,600 / €9,200 allowance after 8 years, the same 7.5% levy. The difference plays out on death. Life insurance is settled outside the estate via the beneficiary clause (€152,500 exempt per beneficiary for premiums paid before age 70). The capitalisation contract, by contrast, has no beneficiary clause: it falls into the estate and is passed on under ordinary law — which opens the way to gifting and dismemberment during your lifetime.
What looks like a drawback is in reality a lever: the capitalisation contract can be given away during your lifetime, in full ownership or in dismemberment, while keeping its tax seniority. The recipient inherits a “dated” contract, often already beyond the 8-year mark.
The tool for gifting and dismemberment
You can gift the bare ownership of a capitalisation contract to your children while keeping the usufruct (and therefore the income). The gift partly settles the duties, the usufruct scale reduces the taxable base according to your age, and on death the usufruct is extinguished with no further duties. It is a very efficient mechanism of gradual transmission.
Unlike life insurance, there is no age threshold (the 70-year rule) that changes the picture: the strategy remains consistent whatever your age. For someone planning a transmission beyond 70, it is a particularly well-suited tool.
The only contract for a company subject to corporation tax
A company subject to corporation tax (a wealth-holding company, an SCI taxed under corporation tax) cannot take out life insurance, but can hold a capitalisation contract. It is the reference solution for placing a company’s surplus cash on diversified investments, with specific taxation (an annual flat-rate charge on a theoretical base, settled on surrender).
For a director sitting on corporate cash, it is often the first optimisation reflex. Putting it in place deserves the support of an advisor.
A strategy tool, not merely an investment
This simulator quantifies the capital and the taxation of a surrender, identical to life insurance. But the value of the capitalisation contract is not read in these figures: it reveals itself in the strategy around it — gifting in dismemberment, timing the transmission, articulation with a holding or a company subject to corporation tax. Taken out without a project, it adds nothing over life insurance. Set within a logic of transmission or corporate cash, it becomes irreplaceable.
Balmont Conseil is an independent wealth-management firm, a member of ANACOFI, with no capital ties to a bank. Our independence lets us select the contract and the underlyings across the whole market, and build the transmission or corporate-cash mechanism that genuinely serves your interest. Let’s arrange a meeting to determine whether the capitalisation contract has a place in your strategy.
Frequently asked questions
What is the difference between a capitalisation contract and life insurance?
During the life of the contract, none: the same surrender taxation, the same €4,600 / €9,200 allowance after 8 years, the same 7.5% levy. The difference plays out on death. Life insurance is settled outside the estate via the beneficiary clause (€152,500 exempt per beneficiary for premiums paid before age 70). The capitalisation contract has no beneficiary clause: it falls into the estate and is passed on under ordinary law — which opens the way to gifting and dismemberment during your lifetime.
Why would falling into the estate be an advantage?
Because it allows an advance transmission, impossible with life insurance. You can gift the contract during your lifetime, in full ownership or in dismemberment (bare ownership to the children, usufruct retained), while keeping its tax seniority: the recipient inherits a “dated” contract, often already past the 8-year mark. The gift partly settles the duties, the usufruct scale reduces the taxable base according to your age, and on death the usufruct is extinguished with no further duties.
Can a company hold a capitalisation contract?
Yes, and it is one of its major uses. A company subject to corporation tax (a wealth-holding company, an SCI taxed under corporation tax) cannot take out life insurance, but can hold a capitalisation contract. It is the reference solution for placing a company’s surplus cash on diversified investments. The taxation is specific: an annual flat-rate charge applies on a theoretical base, settled on surrender. Setting it up deserves the support of an advisor.
Is there an age limit like life insurance’s 70 years?
No, and it is a notable advantage. With life insurance, passing the 70-year mark profoundly changes the transmission taxation (€152,500 allowance before 70, a global €30,500 allowance after). The capitalisation contract ignores this threshold: its gifting and dismemberment logic stays consistent whatever your age. That is what makes it a tool particularly suited to people planning their transmission beyond 70.
How does Balmont Conseil differ from a bank adviser on this product?
Balmont Conseil is an independent wealth-management firm, a member of ANACOFI, with no capital ties to a bank. A bank adviser rarely sells a capitalisation contract: it is not a flow product, and it requires engineering (gifting, dismemberment, holding structuring) that goes beyond standard distribution. Our independence lets us select the contract across the whole market and embed it in a transmission or corporate-cash strategy genuinely designed for you.
Results are provided for purely illustrative and educational purposes, based on the parameters you enter and simplified assumptions (2026 taxation, constant return, excluding inflation). They constitute neither personalised investment advice, nor tax advice, nor an offer to subscribe. Some investments carry a risk of capital loss. Before any decision, speak with an advisor.