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Income tax - How is income from a life insurance contract taxed?
Verified 10 April 2025 - Directorate for Legal and Administrative Information (Prime Minister)
If you have a life insurance contract, you are taxed only if you make a buyback (whether full or partial). The gains you have made are taxed according to the length of time your contract is held. However, exemptions are provided for in certain cases. We'll tell you what you need to know.
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The gains realized by your life insurance are taxed according to rules specific to this investment.
FYI
Earnings from a life insurance contract are always subject to social security contributions (CSG, CRDS) at the rate of 17.2%.
Taxation depends on the date of subscription of your contract: before or since September 26, 1997.
Contract signed since 26 September 1997
If you have a life insurance contract, you are taxed only if you make a redemption (whether total or partial).
Taxation varies according to the following:
- Date of payment of the premium
- Term of the contract.
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Premiums paid since September 27, 2017
Taxation depends on the age of your contract.
Contract under 8 years
The interest on your life insurance contracts is taxed in 2 stages.
1. When they are paid, they shall be subject to flat-rate levy without discharge of 12.8% (unless you are applying for an exemption based on your reference tax income).
2. Interest is recorded on your tax return for taxation by one of the following means:
- Flat rate of 12.8%
- Progressive Income Tax Schedule if you choose this global option when you file your tax return.
Any excess is returned to you.
You can apply to be exempt from the flat-rate levy without discharge if your reference tax income of the penultimate year is less than:
- €25,000 if you're single
- €50,000 for a married or former couple subject to common taxation.
For revenues received in 2025, this is the 2023 benchmark tax revenue.
The application is to be sent to the financial institution that pays you the income no later than November 30 of the year preceding that of the payment (November 30, 2025 for an exemption in 2026).
In general, the institution will send you an honorary attestation form to return to the institution if you meet the conditions.
Contract over 8 years
The interest on your life insurance contracts is taxed in 3 stages.
1. Earnings shall be subject on payment to a flat-rate levy without discharge of 7.5% (unless you are applying for an exemption based on your reference tax income).
2. You have to report these gains on your income tax return after deducting the abatement next:
- €4,600 for a single person
- €9,200 for a couple.
Warning
The allowance is granted for all life insurance contracts held by the same taxpayer.
3. Interest shall be charged at the following flat rates:
- 7.5% for interest corresponding to premiums not exceeding €150,000
- 12.8% for interest on premiums in excess of €150,000.
However, you may be required to progressive scale of income tax if you choose this option when you file your tax return
Any excess is returned to you.
You can apply to be exempt from the flat-rate levy without discharge if your reference tax income of the penultimate year is less than:
- €25,000 if you're single
- €50,000 for a married or former couple subject to common taxation.
For revenues received in 2025, this is the 2023 benchmark tax revenue.
The application is to be sent to the financial institution that pays you the income no later than November 30 of the year preceding that of the payment (November 30, 2025 for an exemption in 2026).
In general, the institution will send you an honorary attestation form to return to the institution if you meet the conditions.
Premiums paid before September 27, 2017
Taxation depends on the age of the contract.
Contract under 8 years
The interests of your life insurance contracts of under 8 years can be taxed in one of the following 2 ways:
- Or, at the time of payment, at the standard final levy of 15%, if you choose this global option at the time of payment
- Or, at the time of processing your tax return, at the progressive scale of income tax, if you have not opted for the flat rate when paying interest.
Contract over 8 years
The interests of your life insurance contracts older than 8 years can be taxed in one of the following 2 ways:
- Or, at the time of payment, at the standard final levy of 7.5%, if you choose this option at the time of payment
- Or, at the time of processing your tax return, at the progressive scale of income tax, if you have not opted for the flat rate when paying interest.
You benefit from a abatement on these earnings, the amount of which is:
- €4,600 for a single person
- €9,200 for a couple.
Warning
The allowance is granted for all life insurance contracts held by the same taxpayer.
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Premiums paid since September 27, 2017
Taxation depends on the age of your contract.
Contract under 8 years
The interest on your life insurance contracts is taxed in 2 stages.
1. When they are paid, they shall be subject to flat-rate levy without discharge of 12.8% (unless you are applying for an exemption based on your reference tax income).
2. Interest is recorded on your tax return for taxation by one of the following means:
- Flat rate of 12.8%
- Progressive Income Tax Schedule if you choose this global option when you file your tax return.
Any excess is returned to you.
You can apply to be exempt from the flat-rate levy without discharge if your reference tax income of the penultimate year is less than:
- €25,000 if you're single
- €50,000 for a married or former couple subject to common taxation.
For revenues received in 2025, this is the 2023 benchmark tax revenue.
The application is to be sent to the financial institution that pays you the income no later than November 30 of the year preceding that of the payment (November 30, 2025 for an exemption in 2026).
In general, the institution will send you an honorary attestation form to return to the institution if you meet the conditions.
Contract over 8 years
The interest on your life insurance contracts is taxed in 3 stages.
1. Earnings shall be subject on payment to a flat-rate levy without discharge of 7.5% (unless you are applying for an exemption based on your reference tax income).
2. You have to report these gains on your income tax return after deducting the abatement next:
- €4,600 for a single person
- €9,200 for a couple.
Warning
The allowance is granted for all life insurance contracts held by the same taxpayer.
3. Interest shall be charged at the following flat rates:
- 7.5% for interest corresponding to premiums not exceeding €150,000
- 12.8% for interest on premiums in excess of €150,000.
However, you may be required to progressive scale of income tax if you choose this option when you file your tax return
Any excess is returned to you.
You can apply to be exempt from the flat-rate levy without discharge if your reference tax income of the penultimate year is less than:
- €25,000 if you're single
- €50,000 for a married or former couple subject to common taxation.
For revenues received in 2025, this is the 2023 benchmark tax revenue.
The application is to be sent to the financial institution that pays you the income no later than November 30 of the year preceding that of the payment (November 30, 2025 for an exemption in 2026).
In general, the institution will send you an honorary attestation form to return to the institution if you meet the conditions.
Premiums paid before September 27, 2017
Taxation depends on the age of the contract.
Contract under 8 years
The interests of your life insurance contracts of under 8 years can be taxed in one of the following 2 ways:
- Or, at the time of payment, at the standard final levy of 15%, if you choose this global option at the time of payment
- Or, at the time of processing your tax return, at the progressive scale of income tax, if you have not opted for the flat rate when paying interest.
Contract over 8 years
The interests of your life insurance contracts older than 8 years can be taxed in one of the following 2 ways:
- Or, at the time of payment, at the standard final levy of 7.5%, if you choose this option at the time of payment
- Or, at the time of processing your tax return, at the progressive scale of income tax, if you have not opted for the flat rate when paying interest.
You benefit from a abatement on these earnings, the amount of which is:
- €4,600 for a single person
- €9,200 for a couple.
Warning
The allowance is granted for all life insurance contracts held by the same taxpayer.
Recovered interest may be exempt from tax in certain cases.
It depends on why you are asking for the redemption or termination of the contract:
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Dismissal
The interests of a life insurance are exempt of income tax if the termination of the contract is the result of dismissal.
Dismissal is retained if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
Warning
The exemption does not apply in the event of a contractual breach or termination of a fixed-term contract.
The exemption shall apply if the repurchase or termination of the contract takes place before the end of the year following that in which the redundancy occurred.
Example :
You were fired on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
Early retirement
The interests of a life insurance are exempt of income tax if the termination of the contract results from early retirement.
Early retirement is taken into account if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
The exemption shall apply if the redemption or termination of the contract occurs before the end of the year following the year of early retirement.
Example :
You will be retired early on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
Disability
The interests of a life insurance are exempt of income tax if the termination of the contract results from the recognition of invalidity (2e or 3e category).
Disability is considered if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
The exemption shall apply if the redemption or termination of the contract takes place before the end of the year following that in which recognition of invalidity is granted.
Example :
You are recognized as disabled on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
Judicial winding-up
The interests of a life insurance are exempt of income tax if the termination of the contract results from the judicial winding-up.
The liquidation is retained if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
The exemption shall apply if the redemption or termination of the contract takes place before the end of the year following that in which the bankruptcy is wound up.
Example :
The judicial liquidation is decided on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
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Dismissal
The interests of a life insurance are exempt of income tax if the termination of the contract is the result of dismissal.
Dismissal is retained if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
Warning
The exemption does not apply in the event of a contractual breach or termination of a fixed-term contract.
The exemption shall apply if the repurchase or termination of the contract takes place before the end of the year following that in which the redundancy occurred.
Example :
You were fired on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
Early retirement
The interests of a life insurance are exempt of income tax if the termination of the contract results from early retirement.
Early retirement is taken into account if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
The exemption shall apply if the redemption or termination of the contract occurs before the end of the year following the year of early retirement.
Example :
You will be retired early on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
Disability
The interests of a life insurance are exempt of income tax if the termination of the contract results from the recognition of invalidity (2e or 3e category).
Disability is considered if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
The exemption shall apply if the redemption or termination of the contract takes place before the end of the year following that in which recognition of invalidity is granted.
Example :
You are recognized as disabled on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
Judicial winding-up
The interests of a life insurance are exempt of income tax if the termination of the contract results from the judicial winding-up.
The liquidation is retained if you are one of the following:
- Whoever signed the contract
- Spouse or partner of Civil partnershipsCivil partnerships : Civil Solidarity Pact of the subscriber.
The exemption shall apply if the redemption or termination of the contract takes place before the end of the year following that in which the bankruptcy is wound up.
Example :
The judicial liquidation is decided on May 5, 2025.
The contract must be redeemed or terminated by December 31, 2026.
To make your tax return, you can view the following documents:
- Explanatory notes (in particular income from securities and transferable capital)
- Practical Income Tax Brochure
- Supporting documents submitted by paying institutions (IFU form).
If a pre-filled amount is inaccurate, you must correct or complete it.
Contract entered into before 26 September 1997
If you have a life insurance contract, you are taxed only if you make a redemption (whether total or partial).
Taxation varies according to the following:
- Contract Enrollment Date
- Date of payment of the premium.
Taxation depends on the date the contract was signed.
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Contract signed from 1 January 1983 to 25 September 1997
Taxation depends on when the premiums are paid.
Interest on premiums paid since 1 January 1998
Interest earned in 2025 is taxed at the rate of 7.5% if they result from premiums paid since 1er January 1998.
Interest is taxed after deduction of the abatement next:
- €4,600 for a single person
- €9,200 for a couple.
The allowance is granted for all life insurance contracts held by the same taxpayer.
FYI
The interests of a life insurance are exempt income tax if the redemption results (for you or your married or former spouse) from
- Dismissal
- Retirement
- Disability
- Liquidation.
Interest on premiums paid before 1 January 1998
Interest earned in 2025 is exempt income tax, under certain conditions, only if they result from premiums paid before 1er January 1998.
Contract entered into before January 1, 1983
Taxation depends on when the premiums are paid.
Interest from premiums paid since 10 October 2019
Interest earned in 2025 is taxed at the rate of 7.5% they result from premiums paid since 10 October 2019.
Interest is taxed after deduction of the abatement next:
- €4,600 for a single person
- €9,200 for a couple.
The allowance is granted for all life insurance contracts held by the same taxpayer.
FYI
The interests of a life insurance are exempt income tax if the redemption results (for you or your married or former spouse) from
- Dismissal
- Retirement
- Disability
- Liquidation.
Interest on premiums paid before 10 October 2019
Interest earned in 2025 on contracts entered into before 1er January 1983 are exempt income tax only if they result from premiums paid before 10 October 2019.
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Contract signed from 1 January 1983 to 25 September 1997
Taxation depends on when the premiums are paid.
Interest on premiums paid since 1 January 1998
Interest earned in 2025 is taxed at the rate of 7.5% if they result from premiums paid since 1er January 1998.
Interest is taxed after deduction of the abatement next:
- €4,600 for a single person
- €9,200 for a couple.
The allowance is granted for all life insurance contracts held by the same taxpayer.
FYI
The interests of a life insurance are exempt income tax if the redemption results (for you or your married or former spouse) from
- Dismissal
- Retirement
- Disability
- Liquidation.
Interest on premiums paid before 1 January 1998
Interest earned in 2025 is exempt income tax, under certain conditions, only if they result from premiums paid before 1er January 1998.
Contract entered into before January 1, 1983
Taxation depends on when the premiums are paid.
Interest from premiums paid since 10 October 2019
Interest earned in 2025 is taxed at the rate of 7.5% they result from premiums paid since 10 October 2019.
Interest is taxed after deduction of the abatement next:
- €4,600 for a single person
- €9,200 for a couple.
The allowance is granted for all life insurance contracts held by the same taxpayer.
FYI
The interests of a life insurance are exempt income tax if the redemption results (for you or your married or former spouse) from
- Dismissal
- Retirement
- Disability
- Liquidation.
Interest on premiums paid before 10 October 2019
Interest earned in 2025 on contracts entered into before 1er January 1983 are exempt income tax only if they result from premiums paid before 10 October 2019.
To make your tax return, you can view the following documents:
- Explanatory notes (in particular income from securities and transferable capital)
- Practical Income Tax Brochure
- Supporting documents submitted by paying institutions (IFU form).
If a pre-filled amount is inaccurate, you must correct or complete it.
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