Assurance-vie beneficiary clause: standard or named, how to draft and modify it

The beneficiary clause designates the person or persons who will receive the capital or annuity upon the insured's death. You can draft it in three ways: a standard clause, a named clause, or a reference to a will. As long as the beneficiary has not accepted, you can modify it freely, and the insurer cannot object. Once accepted, the clause becomes irrevocable. Without a designated beneficiary, the capital reverts to the estate, and the tax advantages specific to assurance-vie are lost.

This page deals with drafting and modifying the clause. The tax treatment of the capital received by the beneficiary is covered on another page, dedicated to Article 990 I and Article 757 B of the French General Tax Code (CGI). This page does not address the split ownership clause.

What the beneficiary clause does

The clause appears in the membership form or, after signature, in an addendum. The designation of the beneficiary falls under Article L132-8 of the Insurance Code and its amendment under Article L132-9, as cited by service-public.fr.

Three ways of designating

economie.gouv.fr recommends drafting the clause precisely, to avoid the contract becoming unclaimed.

Several beneficiaries

You determine the distribution of the capital, for example 50 %, 25 % and 25 %. Service-public recommends also specifying how to distribute the share of a deceased beneficiary.

A clause providing for representation "due to prior death" or "due to renunciation" allows the beneficiary's heirs to receive their share in their place. According to economie.gouv.fr, it is also possible to designate subsequent beneficiaries, who would then inherit if the primary beneficiaries predecease them.

When the clause is absent or imprecise

Without a designated beneficiary, the capital or annuity falls into the insured's estate and the tax advantage specific to assurance-vie is lost.

According to service-public, the capital also joins the ordinary inheritance in three cases: the clause has not been fulfilled, it is imprecise, or the beneficiary has died without the clause providing for representation by his heirs.

Conversely, sums payable upon death to a designated beneficiary do not form part of the insured's estate (Article L132-12 of the French Insurance Code, cited by the BOFiP). The BOFiP equates a determinable beneficiary with a designated beneficiary. These two rules are interpreted together: when a clause is considered "imprecise" rather than "determinable" depends on its wording. This point should be verified on a case-by-case basis with the insurer or a notary.

Modify the clause

You can modify it freely, at any time and as many times as you wish, as long as the beneficiary has not accepted. The insurer cannot object. If the policyholder and the insured are two different people, the modification also requires the insured's agreement.

The clause can be modified by amendment or by will:

• With the insurer. You contact him and send him a dated and signed letter. It should include the contract reference number, the full name and address of the new beneficiaries, and the distribution of the capital among them. You keep the acknowledgment of receipt.
• By will. You write that you are revoking the previous beneficiary clause and naming the new beneficiaries. Service-public recommends informing the insurer.

If the insurer has paid the capital in good faith to the beneficiary listed in its information, the policyholder has no recourse against it.

If the policyholder lacks full legal capacity, the modification requires the assistance of a curator, or authorization from a judge in the case of guardianship. Under a family empowerment order or a future protection mandate, the rules governing acts of disposition apply.

Acceptance by the beneficiary

The beneficiary can accept the clause. Three rules govern acceptance:

• A delay. It is only possible at the end of a period of 30 calendar days from the information on the conclusion of the contract, and with your agreement.
• A shape. It is done by an amendment signed by the subscriber, the beneficiary and the insurer, or by a written agreement between the subscriber and the beneficiary, notified to the insurer.
• An effect. The clause becomes irrevocable. You can no longer change the beneficiary, redeem the contract, or take an advance without the consent of the beneficiary who accepted it.

According to the BOFiP (BOI-ENR-DMTG-10-10-20-20, § 60), the beneficiary is "deemed to have had sole entitlement from the day of the contract", even if his acceptance is subsequent to the death of the insured.

When the capital is not paid as planned

• Insured suicide during the first year of the contract. The death benefit is not paid out. However, the insurer must pay out the accumulated savings when the contract includes a surrender value.
• Convicted beneficiary. A beneficiary convicted of intentionally causing the death of the insured can no longer claim under the contract. If other beneficiaries are designated, they can receive the capital.
• Unclaimed contract of a deceased person. Anyone can request a free search from AGIRA for the existence of a deceased person's assurance-vie policy. The 10-year period begins from the date the insurers were notified of the death, not from the date the policy was taken out. After this period, unclaimed funds are transferred to the Caisse des Dépôts (Ciclade service) and remain recoverable for 20 years from the date of transfer. The capital must be paid out within one month of receipt of all the necessary documents.

Numerical example (fictitious profile)

Situation. Marc is in a civil partnership with Léa. They have two children. It is assumed that Marc is both the policyholder and the insured of his assurance-vie policy. This policy contains the insurer's standard clause, which designates "my spouse." The death benefit is assumed to be €400,000. No beneficiary has accepted the clause.

Issue. The term "spouse" refers to the person married to Marc at the time of his death. In principle, this excludes Léa, his civil partner. The beneficiaries would also need to provide a certificate of heirship.

Strategy. Replace the standard clause with a named clause: full name of Léa and the two children, allocation of 50 %, 25 % and 25 %, representation "due to predecease" for the children. Marc sends it to the insurer by dated and signed mail, with the full name and address of each beneficiary, and keeps the acknowledgment of receipt.

Result.

If a child dies before Marc, the representation clause allows their heirs to receive the €100,000 instead. Marc can freely modify his clause because no beneficiary has accepted. If the insured were someone else, that person's agreement would also be required. If one of them had accepted, their consent would be needed to change the beneficiary, redeem the policy, or take out a loan. This scenario is hypothetical. The capital amount is a hypothetical scenario. The taxation of the capital received is not addressed here.

What changes depending on your situation

• Drafting your current clause : standard, nominative or reference to a will.
• The family situation of the beneficiaries married couples, civil partners, cohabiting partners, children, other people.
• The existence of acceptance, which makes the clause irrevocable.
• The policyholder and the insured, depending on whether it is the same person or not.
• Your legal capacity, if you are under protection.
• The contract itself : its wording and terms should be verified with the insurer.

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