Entrepreneurship is one of the professions where stress plays a major role. Your health may be put to the test, especially if you are sensitive to adrenaline rushes. If life insurance allows you to pass on your capital to your relatives (or other recipients) in the event of death, it is above all a savings product which should not be confused with death insurance.
Life insurance serves three main purposes: to enhance your capital, to receive additional low-tax income, immediately or during your retirement, or to optimize the transmission of your assets. Concretely, you sign a contract with an insurer for which you define the duration, the amount of what you wish to pay and the recurrence (or not).
Life insurance allows you to invest in bonds as well as stocks
or even safe havens such as gold or real estate. You can choose the level of risk you wish to take and place all of your money in a secure and guaranteed fund called “euro funds”. In other words, if you want to opt for security, life insurance has a huge advantage: you can decide to position yourself on a fully guaranteed investment.
Note, however, that the lower the risk taken, the lower the return. If you have a riskier investment profile, you can also decide to place it on balanced or even riskier funds.
Taxation is a significant advantage, especially if you want to invest for the long term, since it is degressive in the context of a life insurance contract redemption and does not relate to capital, but to earnings. We understand better that this insurance is the favorite of the French. In concrete terms, you are taxed for the first 4 years at 35% interest, then 15% up to 8 years. From the age of 8, taxation is nil below a certain threshold and only represents 7.5% above this same threshold. You can therefore be
When you’re an entrepreneur, you rarely know what the future will hold. If you are able to pay yourself right now, you are well aware that companies are going through ups and downs. You may find yourself forced to cut your pay or need the funds saved. With life insurance, your funds are not blocked. If necessary, you can therefore perfectly make withdrawals, even if they will be taxed. You can also make a partial surrender if you only want to have part of the money, but this will not cause the contract to be closed.
Finally, you will have understood that life insurance is not only a long-term savings tool or advantageous taxation in the event of death, it also remains an emergency capital that you can use in the event of a blow. hard. You will thus be able to benefit from a reserve of liquidity which could be very useful to you in these difficult times, since you can release it at any time. To benefit from the tax advantages, you just have to wait for the duration of 4 years. On the other hand, if you have already planned to use this money before this deadline, other savings solutions may prove to be more suitable.
Another element of flexibility: you choose how you wish to deposit the money into this account: upon subscription, on an ad hoc basis or on a regular basis. You can thus fund the account when you can and stop doing it when you can’t!
advantages will depend on your age. Before age 70, you thus benefit from an allowance of €152,500 per beneficiary on the capital paid on death, from taxation of 20% after allowance and up to €700,000 and from 31.25% beyond 852,500. €. Beyond the age of 70, you will have inheritance tax on the fraction of premiums over €30,500 and an exemption from inheritance tax on capital gains. Note that if your beneficiary is your spouse or you are bound by a PACS, they will be totally exempt.
Life insurance can be of particular use to the business.
First of all, it can allow in the event of death to finance the tax liability and to distribute the value fairly among the beneficiaries. Then, it is often used for loans because it is still common for lenders to require it, especially for key people in the company.
However, it is still interesting to subscribe to it yourself to protect the company’s finances, by setting up insurance on them. You will thus be able to have the necessary cash in the event of death to compensate for an absence. Finally, it remains used to finance purchase and sale transactions in the event of the death of one of the shareholders/partners, in particular if you do not want the shares to be bequeathed to the latter’s family. Clauses are often provided for this purpose in the shareholder pact, so as not to end up with undesirable people at the helm of the company.
Life insurance for your account can ultimately be used for different purposes: firstly to provide additional income when you retire. All you have to do is apply for a life annuity. Then, as a “hat retirement” since only the gains will be taxed, and finally as a transmission tool for your loved ones with very attractive taxation.
Flexible, adaptable and with advantageous taxation, life insurance remains a good way for business leaders to ensure their financial future, the transmission of their assets or simply to enhance their capital
