Life Insurance and French Succession Tax (Assurance Vie Succession)

Assurance vie policies sit outside the ordinary succession in France, but payouts to beneficiaries are still taxed, under their own separate rules. Which rules apply, and how much a beneficiary ultimately keeps, depends heavily on whether the premiums funding the policy were paid before or after the policyholder turned 70.

Information last verified on 19 July 2026. This article presents general legal information, not legal advice.

Jurisdiction scope: This article covers life insurance and succession tax under French national law only. It does not address the tax treatment of life insurance in any other country.

Assurance Vie and Succession: A Separate Tax Regime, Outside the Ordinary Estate

Under Article L132-13 of the Code des assurances, the capital or annuity paid to a named beneficiary on the death of a policyholder is not subject to the rules of rapport a succession, the ordinary rules that bring gifts and assets back into account when dividing an estate. In practical terms, this means life insurance proceeds are not treated as part of the deceased's estate for purposes of dividing it among heirs, and the beneficiary named in the contract, rather than an heir under the general law of succession, receives the money directly.

Being outside the succession does not mean being outside all taxation. Life insurance payouts are still taxed, just under a specific set of rules, described below, rather than the general droits de succession scale covered on our inheritance tax page. Which specific rule applies turns on the age of the insured at the time each premium was paid into the contract, not the age of the insured at death. A lifetime gift, by contrast, follows the rules on our lifetime gifts page, including the 15 year look back that resets most allowances.

Premiums Paid Before Age 70: The 152,500 EUR Allowance

For premiums paid into the contract before the insured's 70th birthday, Article 990 I CGI gives each beneficiary a personal allowance of 152,500 EUR. Above that allowance, the taxable capital is taxed at 20% up to 700,000 EUR, and at 31.25% on any amount above 700,000 EUR.

Because this allowance applies per beneficiary, naming more than one beneficiary on a contract funded before age 70 can meaningfully reduce the total tax paid across the whole payout, compared with naming a single beneficiary for the same total amount. As an illustration only, a 300,000 EUR payout split between two beneficiaries, 150,000 EUR each, would fall entirely within each beneficiary's individual 152,500 EUR allowance and produce no tax at all, while the same 300,000 EUR paid to a single beneficiary would leave 147,500 EUR taxable above that beneficiary's own 152,500 EUR allowance. This is a mechanical description of how the allowance is structured, not a suggestion about how any particular person should structure their own contract, which depends on personal and family circumstances.

These rules described in this section and the next apply specifically to contracts subscribed since 20 November 1991. A contract taken out before that date can be subject to different, largely obsolete transitional provisions, which are outside the scope of this article since the overwhelming majority of contracts in force today were subscribed after that date.

Premiums Paid After Age 70: The 30,500 EUR Global Allowance, and Why Investment Gains Stay Exempt

For premiums paid into the contract after the insured's 70th birthday, a different rule applies, under Article 757 B CGI, and the difference is significant. Rather than a per beneficiary allowance, there is a single 30,500 EUR allowance, shared across every beneficiary and every life insurance contract belonging to that same insured. This is the single most commonly confused point about French life insurance taxation: the allowance does not multiply by the number of beneficiaries or contracts.

The other half of this rule is what makes the pre-70 and post-70 regimes behave so differently. The 30,500 EUR allowance, and the tax that applies above it, is calculated only on the premiums the insured actually paid in after turning 70. Any investment growth, interest, or gains those premiums later generated inside the contract are entirely exempt from tax, regardless of how large that growth is. A premium of 50,000 EUR paid in after age 70 that grows to 90,000 EUR by the time of death is taxed, above the shared allowance, only on the 50,000 EUR premium; the 40,000 EUR of growth is not taxed at all.

Spouse and PACS Partner Beneficiaries: Full Exemption

A spouse or PACS partner named as a life insurance beneficiary pays nothing, regardless of whether the underlying premiums were paid before or after the insured turned 70. This follows the same general spousal and PACS exemption from droits de succession, and it overrides both the Article 990 I and Article 757 B regimes for that beneficiary. Background on what a PACS is appears on our civil partnerships page.

Why Assurance Vie Is Called Hors Succession, and Its Limit: Manifestly Excessive Premiums

Life insurance is often described in French practice as hors succession, outside the succession, precisely because of the Article L132-13 rule discussed above: the payout goes to the named beneficiary directly, generally without being pooled with the rest of the estate or measured against the reserved share that protects children, covered in more detail on our forced heirship page.

That protection has a limit. The same Article L132-13 provides that premiums which were manifestly excessive (manifestement exagerees) relative to the policyholder's means at the time they were paid can still be reintegrated, but only as an indirect gift, and only to the extent of the excess premium itself, not the whole contract or its growth. In other words, a policyholder cannot use life insurance to fund an amount so far beyond their actual means that it functions as a disguised gift meant to defeat the ordinary succession rules; if a court finds the premiums were manifestly excessive, the excess portion can be brought back into account.

This limit is also why life insurance is best understood as a separate contractual regime with its own tax treatment, rather than as a way to avoid succession rules altogether. It does not remove the reserved share that protects children under French law, described on our forced heirship page; it simply means that, absent manifestly excessive premiums, a well funded life insurance contract is not automatically pooled with the rest of the estate for calculating that reserved share the way an ordinary gift or bequest would be.

Before 70 vs After 70: A Worked Comparison

The examples below are illustrative only, using round figures. Which regime applies to a real contract depends on exactly when each premium was paid, and a single contract can hold premiums paid both before and after age 70, each taxed under its own rule.

Example A, premiums paid before 70. A parent pays 200,000 EUR of premiums before turning 70, into a contract naming their one adult, non-spouse child as sole beneficiary. The taxable base is 200,000 EUR minus the 152,500 EUR allowance, leaving 47,500 EUR, taxed at 20%, for a tax bill of 9,500 EUR.

Compare that with the same 200,000 EUR passing to the same child as ordinary cash through the succession instead. After the 100,000 EUR direct line allowance, 100,000 EUR would be taxable, producing droits de succession of about 18,194 EUR under the ordinary scale, roughly double the life insurance tax on the same amount. This is a large part of why life insurance funded before age 70 is widely used in French estate planning, though the comparison is illustrative and depends on the beneficiary's relationship and the rest of the estate.

Example B, premiums paid after 70. The same parent instead pays 200,000 EUR of premiums into the contract after turning 70. Only 30,500 EUR, the shared global allowance, is exempt. The remaining 169,500 EUR of premiums enters the succession tax calculation, taxed at the scale that corresponds to the beneficiary's relationship to the deceased. Any investment gains that 200,000 EUR earned inside the contract, however, remain entirely tax free, which is the asymmetry that makes premiums paid before and after 70 behave so differently in practice.

Disclaimer

This article provides general information about life insurance and succession tax under French law as of the verification date above. It is not legal, tax, or financial advice, and it does not create an attorney-client or other professional relationship. Whether life insurance premiums could be considered manifestly excessive, and how a specific contract will be taxed, depends on individual facts. Readers should consult a notaire, insurer, or qualified tax adviser about their own contracts.