French life insurance and inheritance in 2026: tax, beneficiary clause and the new law

• Outside the estate: the capital goes to the beneficiaries named in the policy's clause, outside the sharing between heirs.
• Payments before 70: €152,500 per beneficiary tax-free, then 20%, and 31.25% above €700,000 of taxable value.
• Payments after 70: a €30,500 allowance for all beneficiaries combined, inheritance tax on the rest of the payments, gains exempt.
• New law: the 2027 budget only targets policies with dedicated funds or paid in with securities, and it has not been passed.

Assurance vie is France's largest savings product, with €2,174 billion invested at the end of July 2026 according to the government. Much of its success comes from what happens on death: a child who inherits €400,000 through an assurance vie pays roughly half the tax of a regular inheritance, and an unmarried partner who would pay 60% on an inheritance can receive €152,500 without paying anything. These rules sit in two articles of the French Tax Code, 990 I and 757 B.

This guide explains why assurance vie stays outside the estate in France, how it is taxed on death for payments before and after 70, who is exempt, two worked examples, the beneficiary clause, what the 2027 “new law” actually says and what a beneficiary has to do. The rules quoted come from the official texts, with their dates.

Why assurance vie stays outside the estate in France

Under article L. 132-12 of the French Insurance Code, the capital paid on death to a named beneficiary is not part of the insured person's estate. It is not shared between heirs under the Civil Code, and it does not pay regular French inheritance tax. It follows a tax regime of its own, which depends on a single factor: the insured person's age when each payment was made.

What counts is the date of each payment, not the date the policy was opened. A policy opened at 60 and topped up at 72 falls under both regimes: the before-70 rule for money paid in up to that birthday, the after-70 rule for the rest. The insurer works out the split on death.

Payments before 70: €152,500 per beneficiary

For money paid in before the insured person turned 70, article 990 I of the French Tax Code sets a levy specific to assurance vie. Each beneficiary gets a €152,500 allowance, which covers all the policies taken out on the same insured person. Above it, their share is taxed at 20% up to €700,000 and at 31.25% beyond. The levy applies to everything received, payments and gains alike, and the insurer withholds it before paying out: the beneficiary has nothing to file for this part.

The €700,000 is counted after the allowance, so the 31.25% rate only starts above €852,500 received by one beneficiary. And since every beneficiary gets the allowance, a policy split between several people passes on far more tax-free: €305,000 for two, €457,500 for three.

Two details. “Vie-génération” policies, partly invested in social housing, small businesses or the social economy, get an extra 20% allowance on the capital, applied before the €152,500. And when the clause splits the capital between a life interest (usufruit) and bare ownership, each holder is taxed on their share, valued with the official usufruct scale, and the allowance is split in the same proportions.

Assurance vie after 70: €30,500 for everyone, gains exempt

For money paid in after the insured person turned 70, on policies opened since 20 November 1991, article 757 B of the Tax Code applies French inheritance tax, but only to the payments. The allowance is €30,500, once, shared by all beneficiaries and all the insured person's policies. The rest of the payments is taxed like an inheritance, based on the relationship between the insured person and the beneficiary, after the beneficiary's own allowance if the rest of the estate has not already used it: €100,000 for a child.

The gains earned on those payments are exempt. That is the main appeal of assurance vie after 70: a policy funded at 72 that has doubled by 90 only passes on the money paid in, minus €30,500, as its taxable base. For this part, the beneficiary must report what they receive on form 2705-A, within six months of the death in mainland France, and show it to the insurer to get paid.

Is it still worth paying in after 70?

The after-70 regime is less generous, since the allowance drops from €152,500 per beneficiary to €30,500 for everyone. It remains more favorable than a bank or brokerage account, whose whole value enters the estate: with assurance vie, the gains pass free of inheritance tax and the money goes to whoever you choose, outside the sharing between heirs. Policies opened before 20 November 1991 follow other rules: their payments made up to 12 October 1998 are exempt, and those made since fall under the €152,500 levy, whatever the insured person's age.

Spouses, civil partners, brothers and sisters

A married spouse and a PACS civil partner are fully exempt, for payments before and after 70. A brother or sister is exempt too if they meet three conditions at the time of death, according to impots.gouv.fr: being single, widowed, divorced or legally separated; being over 50 or unable to work because of a disability; and having lived with the deceased for the five years before the death. Beneficiaries who were not tax residents of France can also be exempt, under conditions.

An unmarried partner gets no exemption at all, and this is where assurance vie makes the biggest difference. In a regular French inheritance, a person with no family tie only gets a €1,594 allowance and pays 60% on the rest, according to service-public.fr (in French). Named as the beneficiary of an assurance vie funded before 70, they receive €152,500 tax-free and only pay 20% above it.

A common trap involves the spouse: since they pay nothing, naming them as the sole beneficiary does not lower the couple's tax, but the money joins their own estate. On their death, the children will inherit it under the regular scale, without the €152,500 allowance. That is why some clauses split the capital, or divide it between the spouse, as life tenant, and the children, as bare owners.

How assurance vie is taxed on death: two worked examples

€400,000 passed on to two children

A parent leaves €400,000 to their two children in equal shares, paid into an assurance vie before age 70. Each receives €200,000, deducts the €152,500 allowance and pays 20% on the remaining €47,500: €9,500 each, €19,000 in total.

The same €400,000 left in a bank account enters the estate. Each child receives €200,000, deducts their €100,000 allowance and pays the direct-line scale on the remaining €100,000: 5% up to €8,072, 10% up to €12,109, 15% up to €15,932, then 20%. That is €18,194 each, €36,389 in total. Here assurance vie cuts the tax almost in half, and the €100,000 allowance per child is still available for the rest of the estate: the two add up.

€100,000 paid in after 70

A mother pays €100,000 into an assurance vie at 72. When she dies, the policy is worth €140,000. Her son, the sole beneficiary, also inherits €300,000 from her estate, so his €100,000 allowance is already used and his taxable share sits in the 20% bracket. On the assurance vie, only the payments count: €100,000 minus €30,500, or €69,500 taxable, and €13,900 of tax. The €40,000 of gains are exempt.

Had the €140,000 stayed in an account, all of it would have been taxed at 20%: €28,000. Even after 70, assurance vie halves the tax here, before the social charges due on gains that have not yet paid them.

The beneficiary clause: the line that decides everything

The beneficiary clause names who receives the capital. Most policies offer a standard clause along the lines of “my spouse, failing that my children born or to be born, living or represented, in equal shares, failing that my heirs”. It suits many families, but not all: “my spouse” means the person married to the insured on the day of death, not a PACS partner or an unmarried partner, who must be named.

1. Name each beneficiary precisely: surname, first name, date and place of birth. A vague clause delays payment and can end up in court.
2. Add a “failing that”: if the only beneficiary dies before the insured person and no one else is named, the capital falls back into the estate, with its tax.
3. Reread the clause at every life event: marriage, PACS, divorce, birth, a death in the family. It can be changed at any time, by amendment or by will.
4. Know what an acceptance commits you to: a beneficiary who accepts the clause, with the insured person's agreement, makes it impossible to change without them and blocks withdrawals.

One last limit protects the heirs: if the payments were “manifestly excessive” given the insured person's age, income and wealth, the heirs can ask a court to bring them back into the estate (article L. 132-13 of the Insurance Code). Judges look at how useful the policy was to the insured person at the time of each payment.

Is there a new French law on assurance vie and inheritance?

No, not so far. France's 2026 budget law changed neither article 990 I nor article 757 B: on Légifrance (in French), their current versions date from 11 March 2023. The 2026 rise in social charges, to 18.6%, even spared assurance vie, which stayed at 17.2%. The €152,500, the €30,500 and the 20% and 31.25% rates are the 2026 figures.

What drives the searches for a “new law” is the draft budget for 2027. Its article 6 (in French), titled “Protecting the assurance vie model”, reserves the tax regime for policies that follow three rules: payments in cash rather than securities, from 1 October 2026; unit-linked assets similar to those the Insurance Code allows; and no dedicated fund holding securities issued by the policyholder, their family or companies they control. A policy that breaks them at the time of death would lose the €152,500 allowance: the capital would be taxed like an ordinary inheritance, for deaths from 1 July 2027.

The measure targets wealth-planning structures, often held in foreign policies, not the policy of an ordinary saver invested in a euro fund and mainstream funds. The government writes that these criteria are “already met by the policies taken out by the vast majority of French people” and expects about €50 million a year from it. Above all, nothing has been passed: the National Assembly rejected the bill at first reading (in French) on 4 November 2026, and the Senate continues its review on the government's version. During the debates, MPs also voted down amendments that sought to scrap the allowance or to bring assurance vie into the estate.

What a beneficiary has to do

1. Find out whether you are a beneficiary: if in doubt, AGIRA queries all insurers, on request online or by post with the death certificate.
2. Send the documents to the insurer: death certificate, ID, bank details and, for payments after 70, form 2705-A stamped by the tax office.
3. Get paid: the insurer pays the capital within a month of receiving all the documents, after withholding the article 990 I levy if it is due.
4. Forgotten policies: capital nobody claims goes to the Caisse des dépôts after ten years, where it can be searched on the Ciclade website.

On death, gains that have not yet paid social charges, especially those of unit-linked funds, pay them at 17.2%. Those of the euro fund have already paid them every year. The guide to French life insurance tax covers these charges and the tax on withdrawals during the insured person's lifetime.

Preparing to pass on an assurance vie

1. Pay in before 70 when possible: the €152,500 allowance per beneficiary is five times wider than the one after.
2. Think about the number of beneficiaries: each has their own €152,500 allowance, which is not the case for the €30,500 after 70.
3. Keep the clause up to date, naming the people, with a “failing that” and a reread at every change in the family.
4. Keep a record of payments and their dates: they decide the regime of every euro on death.

The guide to how assurance vie works covers its investment options and fees. The guide on where to put your money in France compares assurance vie with the other accounts, and the compound interest calculator shows what a payment grows into over twenty or thirty years. Tradoshi's portfolio tracking accepts your assurance vie as a declared holding, alongside your other accounts.

This guide is educational and is neither tax, legal nor personal wealth-planning advice. The rules quoted are those in force in November 2026. Drafting a clause, a blended family or a large estate call for a notary's or an adviser's opinion.

Frequently asked questions