Previously, it was not possible to change life insurance contracts. But it has become feasible since the enactment of the Pact law of May 23, 2019. Being a provident contract, life insurance deserves to be well thought out and studied so that it is to your advantage. An ideal contract is tailored to your situation and savings. Want to know more about life insurance transfers? Check out this article!

Why Consider a Life Insurance Transfer?

There are several reasons why a saver might want to transfer his or her life insurance. Some of the most common causes include:

• The growing increase in fees related to the contract makes it no longer sufficiently remunerative: indeed, some online insurers offer more attractive contracts. For example, they don’t charge the deposit fees, the arbitration fees, or even the fees on redemptions. Moreover, the annual management fees are less expensive.

   

• The low yield of the euro fund which pushes the saver to look for another contract with a more interesting euro fund, such as real estate or dynamic.

   

• The obsolescence of the life insurance management methods which may no longer suit your needs and situation.

   

• The non-existence or the limitation of offers concerning the supports in units of account. These constitute a fundamental instrument in the investment in the financial markets and increase the contract’s performance. Therefore, it is an essential element when subscribing to a life insurance policy.

   

• The absence or insufficiency of assistance from the advisor, which complicates the management of the contract by the saver;

   

• The absence of the management under mandate option in the contract, even though the investor wishes to benefit from it.

Can the Life Insurance Be Transferred to Another Insurer?

In general, it is not possible to change the insurer. However, the transferability of life insurance capital is regularly discussed at the international level, without leading to an agreement between the sector professionals.

Moreover, insurers are opposed to this principle because of the fluctuation of the units of account depending on the institution that sells the life insurance contract. However, its transferability to another bank favors the old savers who wish to reinvest the same capital towards more recent support. They can then claim a more interesting return.

The only remaining solution is to close the old contract definitively by proceeding to total surrender, then subscribe to a new contract with an establishment of your choice. However, make sure you make the right decision, especially if your old contract has already exceeded 8 years. It should be noted that a transfer of life insurance to another insurer will result in a zero tax start. If this is the case, it is better to make progressive annual withdrawals to benefit from a tax exemption of 4,600 euros for a single person and 9,200 euros for a couple. Of course, this taxation is only applicable if your contract yield is positive.

How to Transfer a Life Insurance Policy?

From One Life Insurance Policy to Another

The law does not specify the procedures to be followed. On the other hand, it requires insurers to provide all the information and conditions of transfer to their customers. In principle, regardless of the nature of the contract (single or multi-support), the age, the amount, or the subscription network, it is always transferable. However, the law is silent on whether or not the insurer may charge a handling fee for the transfer.

From a life insurance contract to a PER (Plan d’Epargne Retraite)
The conditions for transferring a life insurance policy to a PER have been set out in the Pacte law. This type of transfer can be made, but only until December 31, 2022. Moreover, this solution is intended for policyholders who still have 5 years of contributions before their retirement.