Assurance vie in 2026: how French life insurance works, returns, fees and withdrawals

• A savings contract, not death cover: the money paid in stays available and earns a return; passing it on is just one of its uses.
• Two families of investments: the euro fund, with guaranteed capital (2.63% on average in 2025), and unit-linked funds, with no guarantee.
• No ceiling on payments, unlike the Livret A or the PEA.
• Fees decide: 1% a year in management fees costs about €4,600 over twenty years on €10,000 invested at 5%.

Assurance vie is France's largest financial investment, with €2,174 billion invested at the end of July 2026 according to the French government. Its name is misleading: for the most part it is not insurance against death but a savings wrapper, flexible and tax-efficient, used to build capital, prepare for retirement or pass money on.

This guide explains how assurance vie works in France, its investment options, self-directed or managed investing, its returns in 2025 and 2026, its fees, the absence of a ceiling, withdrawals, transferring a contract, a child's contract, its advantages and limits, and how to open one. Tax and inheritance each have their own guide.

Assurance vie: definition and how it works

An assurance vie is a contract between a policyholder, who pays the money in, and an insurer, who invests it. It also names an insured person, usually the policyholder, and one or more beneficiaries, who will receive the capital when the insured person dies. During the policyholder's lifetime, the money is theirs: they can withdraw it, in part or in full, at any time.

You open the contract with a first payment, then pay in whenever you like, one-off or monthly, with no ceiling. Each sum is split between the chosen investments. After signing, the policyholder has 30 days to cancel the contract and get their money back. Every year, the insurer reports the contract's value.

Euro fund, unit-linked funds, eurocroissance

The euro fund is the historic core of assurance vie: the capital and the interest already credited are guaranteed by the insurer, which invests mostly in bonds. Unit-linked funds (unités de compte) are units of funds, ETFs included, or property: they follow the markets, up and down. The eurocroissance fund guarantees all or part of the capital at a term of at least eight years, according to service-public.fr (in French).

To get the best rate on their euro fund, some insurers require a minimum share of unit-linked funds, or offer a return bonus on that condition. It is a trade-off worth reading before signing.

Self-directed or managed

In self-directed mode, the policyholder chooses the investments and decides when to switch between them, which is called an arbitrage. In managed mode, they hand those choices to the insurer or an asset manager, according to a cautious, balanced or dynamic profile. You can switch from one mode to the other at any time. Managed mode often costs extra fees: weigh them against the time you are willing to spend on your contract.

Assurance vie returns in 2025 and 2026

Euro funds paid 2.63% on average in 2025, according to the final figure from the ACPR, France's insurance supervisor. That rate is already net of management fees, but not of the 17.2% social charges, deducted every year from euro fund interest: 2.18% remains, before any income tax on a withdrawal. That is a little more than the Livret A at 1.7%, but less than inflation, at 3.4% over a year in October 2026 according to Insee.

Rates vary widely between contracts, and the 2026 rates will only be announced early next year. Unit-linked funds have no promised return: a global equity ETF's return over twenty years depends on the markets, with years of sharp falls. The guide what is an ETF explains what to expect from one.

Assurance vie fees

Fees are the real difference between two contracts. Service-public.fr lists several kinds: set-up fees at subscription, fees on each payment, management fees deducted every year, switching fees when you change investments and, rarely, an exit fee, capped at 5% and banned after ten years. Many contracts opened online have neither set-up fees nor payment fees.

Their effect shows over time. €10,000 invested for twenty years in an option returning 5% a year grows to €26,533 with no fees, €24,117 with 0.5% a year in management fees, and €21,911 with 1%. The extra point of fees costs about €2,200; a 3% fee on the initial payment takes off about €700 more. The compound interest calculator reruns this with your own figures.

Assurance vie ceiling: there is none

Unlike the Livret A or the PEA, assurance vie has no payment ceiling. Two thresholds still matter. For tax, the reduced 7.5% rate after eight years only applies to gains on the first €150,000 of payments, across all contracts. For inheritance, each beneficiary receives €152,500 tax-free on payments made before age 70. Finally, payments that are “manifestly excessive” given one's income and wealth can be brought back into the estate at the heirs' request.

Getting your money out: withdrawal, advance

Taking money out of an assurance vie is called a rachat (surrender). It can be partial, and the contract continues, or total, and the contract ends. The insurer must pay within two months of the request; beyond that, it owes late-payment interest. Only the share of gains in the withdrawal is taxed: the guide to French life insurance tax covers the calculation, the €4,600 allowance after eight years and the 2026 rates.

Some contracts also offer an advance: a loan from the insurer, secured on the contract, which is not taxed as long as it is repaid. If a beneficiary has accepted their designation, any withdrawal requires their written consent.

Transferring an assurance vie

Since France's 2019 Pacte law, a contract can be converted into another contract with the same insurer while keeping its tax seniority, provided part of the savings goes into unit-linked funds or eurocroissance. This helps move from an old, expensive or limited contract to a newer one without restarting the eight-year clock.

Changing insurer, however, is not a transfer: you have to surrender the old contract, pay any tax due on the gains, and open a new contract whose age starts from its first payment. That is why many savers keep an old contract open, even nearly empty, for its date.

Assurance vie for a minor child

A minor can hold an assurance vie: the contract is taken out in the child's name by their legal representatives, usually the parents. The money paid in belongs to the child for good, and the parents manage it until they come of age. The main point is to start the eight-year clock very early: a contract opened at birth has its tax advantage at 8, and the young adult can use it at 18.

Advantages and limits of assurance vie

1. Flexible: free payments, no ceiling, money available at any time.
2. Tax-efficient: gains only taxed on withdrawal, annual allowance after eight years, social charges kept at 17.2% in 2026.
3. Inheritance: outside the estate, €152,500 per beneficiary for payments made before 70, spouse exempt (see the guide to life insurance and inheritance).
4. Limits: sometimes high fees, a euro fund that pays less than inflation, and unit-linked funds that can lose value. For shares held long term, the PEA is taxed less.

Opening an assurance vie

An assurance vie can be opened at a bank, with an insurer, online or through an adviser. Before signing, compare four things: payment and management fees, the euro fund's past returns and conditions, the range of unit-linked funds, ETFs included, and the beneficiary clause, to be drafted with care. If an insurer fails, France's life insurance guarantee fund covers up to €70,000 per insured person and per insurer.

The guide on where to put your money in France places assurance vie among the other options, and the savings accounts comparison compares it with the regulated passbooks. Tradoshi's portfolio tracking accepts your assurance vie as a declared holding, alongside your other accounts.

This guide is educational and is not personal investment advice. Unit-linked funds carry a risk of capital loss. The rules and rates quoted are those in force in November 2026.

Frequently asked questions