What is an Assurance vie

assurance vie in france

Over a third of the French population has an Assurance Vie. As a French resident, it’s one of the best ways to protect & grow your savings efficiently. It’s also suitable for providing retirement income – with no restrictions on when or how much you can withdraw.


An assurance vie is simply a wrapper that holds financial investments. It is similar to a Life Policy in other countries – but there are some key French rules worth understanding.

You initially transfer money from a bank account into the wrapper. This money – less any set-up fees – is then used to purchase financial investments from a specific list. It is therefore critical to check the quality of the investment list.

The value of each underlying investment will rise or fall according to the investment chosen. The total value of your assurance vie is simply the sum of all the underlying investments. You can often track the value of your investments via internet on a daily basis.

At any time you can change the underlying investments (from within the insurer’s specified list). This enables you to manage the investments as actively as you wish – which is important if you are to get the best returns.

At any time you can sell underlying investments and request a cash withdrawal. This is known as rachat partiel and can be done automatically each month if you require a regular income. If the policy has been open for less than 8 years – or if significant amounts are withdrawn – French taxes may be due.

At any time you can close down the Assurance Vie and withdraw all the funds. There are no exit charges. Alternatively you can convert the capital into a life-time annuity.

On the death of the policy-holder, the underlying investments are sold and proceeds transferred to named beneficiaries (the beneficiaries are usually chosen, when opening the Assurance vie, and can be changed whenever and as many times you wish to do so) – minus any taxes.

Assurance Vie must not be confused with Assurance Décès which involves monthly life-time insurance premiums and a guaranteed sum paid to the beneficiaries in the event of death. If you stop paying these premiums you receive no capital and effectively loose the value of all the premiums you’ve paid.


French Assurance Vie is focused on collective financial investments (i.e. managed funds), and “Euro Funds”.

There are thousands of managed funds available on the international markets. SwissLife Assurance vie, policy will enable you to choose between a list of 56 different funds.

Funds may be specialised in specific geographies (US, Europe, Emerging Markets, Latin America) or specific sectors (Health, Technology, Commodities). Funds can be limited to shares or to bonds – or mixed with specific quotas for each.

Some funds are generic, leaving the choice between shares & bonds, regions & sectors, entirely up to the fund manager himself – depending on his view of the economic environment.

You should remember that the performance of managed funds depends on the quality of the fund manager (and his team of analysts).


All Assurance Vie contracts offer at least one Euro Fund.

A Euro Fund is secure and earns significantly more interest than most French savings accounts. A fair part of your short-term (6-24 months) cash should therefore be invested in such funds.

Euro Funds are almost always managed internally by the insurance company offering the Assurance Vie. The assets are focused on government bonds – but can also include corporate bonds, shares and property.

Gains achieved during the better years are set aside to smooth out any difficulties in future years.

The insurer guarantees the original capital (net of entrance charges) invested in the Euro Fund. It is a zero-risk investment.

As an example, Swisslife France VIE returns on Euro Funds on the past three years are:

2010: Between 3,3 % and 4 % (due to the bonus +0,70 % booster)
2011: Between 3 % and 3,7% (due to the bonus + 0,70 % booster**)
2012: Between 2,9 % and 3,5% (due to the bonus + 0,60% booster**)

Whereas, most Euro funds, are today giving a 2.75 % return.

To improve the overall performance of your Assurance Vie we advise customers to invest in some carefully chosen stock market funds (known as Unités de Compte or “UC”).



Most investments build up entirely tax-free inside the Assurance Vie wrapper.

Since July 2011, interest earned on the guaranteed Euro Fund is subject to social taxes at source (15.5%). Stock market funds (UC) held inside an Assurance Vie is NOT subject to this immediate social tax.

Each time a withdrawal is made, the growth of the overall wrapper is measured. The withdrawal is considered to be part capital and part gain – using the same overall growth factor.

It is this effective “gain part” within the withdrawal – and not the whole withdrawal itself – that is taxed.

– During the first 4 years the “gain” is taxed at a maximum rate of 35%.
– Between 4 and 8 years, the “gain” is taxed at a maximum rate of 15%.

After 8 years, withdrawals are 100% tax-free if the “gain” is no more than 9200€ pa for a married couple. Any additional “gain” is taxed at a maximum rate of 7.5%.

In all cases, the “gains” in withdrawals are subject to social taxes (CSG, CRDS, …) at 15.5%
(although any Euro Fund interest taxed at source will be excluded when calculating gains).

In the event of death, the proceeds are distributed to the beneficiaries (net of social taxes) and potentially subject to French inheritance taxes:

– Distributions to the spouse or PACS partner are exempt from inheritance tax
– All other beneficiaries have a specific assurance vie tax-free allowance of 152,500€ each
(unless investments were made after the policy holder’s 70th birthday, in that case the overall tax free allowance is lowered to 30 500 €’s).

Please note that the tax authorities can apply the rules and penalties of “abus de droit” if the only reason for setting up the Assurance Vie was to save tax…

Please contact me if you require further information or simulations of taxes on Assurance Vie.


Apart from the above points, you should consider the reliability of the insurance company; Swisslife is for instance, the European leader in asset management, and one of the world’s leaders’ in insurance and asset management (in whose name all assets are held) and the ease of communicating with them.

When setting up the contract there will also be a number of questions to consider, for example:

– do I use the standard contract or should I use a “contract de capitalisation” (e.g. to reduce wealth tax)
– do I use the standard beneficiary clause or should I specify my own (e.g. to reduce inheritance tax)
– what should be the initial allocation of investments?

During the lifetime of the contract, you will probably need to:

– Update details of beneficiaries
– organise withdrawals

Peter MUSTO, Bilingual Customer Consultant at Swisslife
Tel. +33 (0)5 56 28 94 64
Email: agence.bordeaux.theatre@swisslife.fr

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