Pull the income from life insurance

to Set up withdrawals to be programmed allows to draw a regular income from his life-insurance without any worries.

With its reduced taxation and its multiple options for management, life insurance is often described as the "swiss army knife "wealth management". Besides the ability to convert his life insurance to annuities, most good contracts make it possible in particular to receive regular income in the form of withdrawals scheduled in retaining the possibility of transmitting his capital in case of death. How does it work ?

Investment favourite of the French, the life insurance is also privileged to earn income. Between the paid-in capital in the event of death, withdrawals or one-off programmed and annuities, investments, life insurance and other contracts of the funding provided 124 billion euros of resources from their owners and beneficiaries last year. In twenty years, these benefits have quadrupled and now account for almost as much as new payments ($131 billion by 2017), of which over 60% correspond to withdrawals and 4.3% in the form of annuities (see chart). These withdrawals supplement them, including the income of many retirees.

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Well calibrate their withdrawals to keep the distance

Take the time to time money on a life insurance policy is rarely as easy as withdrawing money from an account or bank passbook. But the establishment of withdrawals "programmed" allows you to be rid of the formalities once and for all and to collect regular income on the current account without addressing them.

The exercise is to determine the amount and frequency of payments desired. The main difficulty lies in the correct calibration of its withdrawals as a function of the accumulated capital to go the distance, hoping to even pass a small capital to its children, if one has not emptied his contract for his living. For this, it is also necessary to take account of taxation. On insurance contracts-life of over eight years, beginning before 27 September 2017, the gains are taxed of 17.2 percent in social security taxes is currently in force, plus a flat-rate tax of 7.5% if the amount withdrawn exceed € 4,600 per year, or approximately 9,200 for a couple (or income tax if you do not choose for this collection).

As these taxes do not focus only on the benefits, and not on the total of the withdrawals, we can optimize its withdrawals to be less taxed. "If you have multiple contracts, it is often advantageous to make withdrawals on those whose gains are less important in proportion to the capital invested", explains Arnaud Doria, wealth management advisors to the cabinet AD Investment Council.

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The Express

let's Take an example. You have paid 30,000 euros to the opening of your contract there are more than eight years, and the capital reached 60 000 euros, representing 100% of the earnings on your payments, representing 50% of the accumulated capital (30 000 to 60 000). The share of gains that are taxable will be 50% in each withdrawal. If you withdraw 1000 euros per month, social security contributions will be 17.2% on 50% of each withdrawal, 86 € (1032 eur year-on-year). As you will have removed 6 000 euros of gains in a year (50% of 12 000 euros), you will also be 7.5% on the gains withdrawn in excess of € 4 600 per year (in the case of a single person) or € 105 (1400 x 7.5%). The slate tax amounts in the end to 1 137 eur.

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life Insurance rates / returns contracts

Two types of life insurance are worth more than a life Insurance : how to earn more life Insurance : what to do in the face of declining rates?

let's Say you have another contract for more than eight years, on which you've made payments more recent that have not yet so much grows. For 85 000 euros of payments your equity reaches eur 100 000, which is 17.6% of the earnings on your contributions, representing 15% of the accumulated capital. If you withdraw 1000 euros per month, you only pay 25,80 euros in social security taxes (17.2% of 15% of each withdrawal), or 309,60 euros per year. In this example, make your withdrawals on the second contract allows you to pocket 827,40 euros per year more than on the first ! Morality, it is better to draw a priority in your contracts, the less winners.