Life insurance contract: subscription

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

Is life insurance a savings or insurance product? It's a bit of the two. It is a contract where you ask the insurer, to whom you pay premiums, to pay a sum of money to a beneficiary when an event related to your life occurs. There are 3 types of life insurance contracts: life contract, death contract, and mixed life and death contract.

Since 1er In June 2022, banks, insurance companies and financial institutions that market retirement savings plans (REPs) must post management fees on their websites. The presentation should be in the form of a standard table that groups the fees by category.

Life insurance is a contract by which the insurer undertakes, in return for the payment of bonuses by the insured or the subscriber, to pay a rent or capital to one or more specified persons.

Depending on the objective pursued, you have the choice, as an insured or subscriber, between 3 categories of contracts: contract in case of life, contract in case of death, or mixed contract, life and death.

Life Contract

The life contract allows you to build up savings for yourself or your beneficiaries over time.

If you are alive at the end of the contract, the insurer pays a principal or rent to you or to the beneficiaries which you have designated.

If you die before the end of the contract, the insurer pays a principal or an annuity to the beneficiaries you have designated.

You are free to determine the duration of the contract.

Of tax benefits are granted after 8 years.

Death Contract

The contract in case of death allows you to quickly provide protection for your loved ones.

The insurer undertakes to pay a principal or a rent to the beneficiaries you have designated, if you die before a certain date.

This date can be the due date of the contract, or it can be the due date of an event, for example, if you die before your children have finished school.

The insurer undertakes to pay a principal or an annuity to the beneficiaries that you have designated at the time of your death.

There is no limit and the payment will be made regardless of the date of your death.

On your death, the insurer pays the beneficiaries you have designated with capital to finance your funeral. Some contracts provide for the organization of funeral services.

Life and Death Contract

The contract in case of life and death makes it possible to build up savings for you or your beneficiaries over time and to quickly protect your loved ones.

If you are alive at the end of the contract, the insurer undertakes to pay you a principal or a rent.

If you die before the end of the contract, the insurer undertakes to pay a principal or an annuity to the beneficiaries you have designated.

They differ depending on whether the person is subscriber or the insured.

Subscriber

To subscribe to a life insurance contract, you must meet all of the following conditions:

  • Have the legal capacity to subscribe to a contract (for example, minors and adults in guardianship cannot subscribe to a life insurance contract alone)
  • Comply with the age limits imposed by the insurer
  • Commit to pay the bonuses provided for in the contract
  • Fill in the complete and truthful medical questionnaire remitted by the insurer

Several people can take out a life insurance contract together (we speak of joint subscription).

FYI  

if your fiscal domicile is not located in FranceHowever, some companies may deny you a life insurance contract. This refusal is most often linked to the tax rules in force in your country of residence or in the country of nationality.

Insured

If you enter into a contract in the event of the death of another person, that person is the insured and must give his written consent. She must be at least 12 years old. If she is a minor, the written consent of her parents or guardian is mandatory.

Obligations common to all contracts

Before the conclusion of the contract

The insurer shall comply with the following obligations:

  • Inform and advise you. The insurer collects information about your family and financial profile to offer you a contract tailored to your situation and expectations.
  • Give you an insurance proposal (or draft contract) including a draft letter of waiver. This document shall specify in particular the subject-matter of the contract, the respective obligations of each party, the fees charged and the procedures for designation of the beneficiaryand, if necessary, the possibilities of redemption or transfer.
  • Give you a briefing note which summarizes the essential characteristics of the contract.
    The insurer may validly fulfill this obligation by providing you with the key information document or the specific information document provided for in the European Union regulations.
    If the key information document or the specific information document is not provided, the insurer must inform you of how you can obtain it (website, email address, etc.).
    The submission of the information note is not mandatory for contracts with a surrender value or transfer. In this case, a box must appear on the 1era page of the contract, clearly indicating its essential characteristics.

After the conclusion of the contract

The insurer must provide you with the following information each year:

  • Guaranteed yield amount
  • Amount of the contribution to the technical and financial benefits of the contract
  • Average guaranteed return
  • Average rate of profit-sharing in contracts of the same kind opened for subscription
  • Average profit-sharing rate of closed contracts of the same kind
  • Average rate of profit sharing for all contracts of the same nature

The insurer shall publish the following information on its website each year:

  • Average guaranteed return on each of its life insurance and capitalization contracts
  • Rate of profit sharing attributed to each life insurance and funding contract

Enhanced requirements for unit-of-account contracts

Before the conclusion of the contract

The insurer must provide you with detailed information on the main characteristics of the selected units of account before the contract is concluded.

The insurer may validly fulfill this obligation by providing you with the key information document or the specific information document provided for in the European Union regulations.

If the key information document or the specific information document is not provided, the insurer must inform you of how you can obtain it (website, email address, etc.).

In addition, the insurer must specify, for each unit of account, the following:

  • Gross fee performance
  • Net Performance of Fees
  • Amount of the fee and the period to which it relates

FYI  

the insurer must indicate any retrocessions which it receives directly or through entities linked to it for the management of the assets contained in the units of account portfolio.

After the conclusion of the contract

The insurer shall make available to the subscriber at least once every three months the following information:

  • Redemption Value Amount
  • Share of assets invested in solidarity funds, socially responsible and financing the green transition
  • Change in the surrender value of commitments

The insurer must provide you with the following information each year:

  • Unit of account values
  • Annual change in units since subscription and significant changes
  • Charges levied by the insurer for each unit of account
  • Share of expenses of each unit of account in the last known financial year
  • Possible retrocessions received by the insurer directly or through related entities for the management of the assets contained in the units of account portfolio

Approach

Once the contract is signed, you have 30 calendar days to change your mind.

You must send a registered letter with AR: titleContent insurance.

This period runs from the date on which you were informed of the conclusion of the contract.

This 30-day period may be extended if the required information and documents have not been provided by the insurer.

A sample letter is available:

Request to Waive a Life Insurance Contract

Consequences of the waiver

The insurer will return all amounts paid on the contract to you within 30 days of receiving the waiver.

After this period, the sums shall bear interest on the statutory rate increased by 50% for the first 2 months, and then beyond that period, at twice the legal rate.

The beneficiary clause makes it possible to designate the persons who, as the case may be, will receive the capital or the rent after the death of the insured.

Appointment by subscriber

As a subscriber, you can designate one or more beneficiaries, in one of the following 3 ways, as set out in your contract:

  • By reference in the insurance contract
  • By will
  • By simple letter to the insurer

Throughout the contract, you can amend, subject to conditions, the person or persons designated as beneficiaries.

Recipient Acceptance

The beneficiary must agree to its designation to give it character irrevocable.

However, he may do so only at the end of a period of 30 days from the conclusion of the contract.

The law provides for two procedures for accepting the beneficiary clause:

  • Signature of a agreeable to the contract by the subscriber (who is generally also the insured), the insurer and the accepting beneficiary
  • Signature of a written document between the subscriber and the accepting beneficiary, followed by notification to the insurer.

Who can help me?

Find who can answer your questions in your region

FAQ