PER or Life Insurance: Which One Suits Your Profile?

PER and life insurance: two complementary wrappers

The Plan d'Epargne Retraite (PER), introduced by the 2019 PACTE law, and life insurance (assurance vie) are the two pillars of long-term savings in France. While they share certain characteristics (similar investment vehicles, tax advantages), they follow very different logics. Choosing between the two, or combining them, depends closely on your personal, tax and wealth situation.

To make our analysis concrete, we recommend specific products for each profile: Linxea Spirit PER (one of the best PERs on the market, management fees of 0.50%) and Linxea Spirit 2 (a benchmark in life insurance, unit-linked fees of 0.50%).

The fundamental differences

Capital availability

Life insurance: Your savings are available at any time. You can make partial or total withdrawals whenever you wish, with no justification needed.

PER: Savings are locked until retirement, except for early-release situations:

• Purchase of your primary residence (residence principale)
• Disability (policyholder, spouse, child)
• Death of spouse or PACS partner
• Expiry of unemployment benefits
• Over-indebtedness
• Cessation of self-employed activity following court-ordered liquidation

This difference is fundamental: the PER is a retirement savings tool, not an emergency savings tool.

Tax treatment at entry

Life insurance: No tax advantage at entry. Your contributions are not deductible from taxable income.

PER: Contributions are deductible from taxable income, up to:

• 10% of the previous year's professional income
• A maximum ceiling of 35,194 euros in 2024 (for employees)
• With the option to carry forward unused ceilings from the 3 prior years

Tax-saving example: An executive with a net taxable income of 80,000 euros (marginal rate of 30%) contributes 8,000 euros to their Linxea Spirit PER. The immediate tax saving is 8,000 x 30% = 2,400 euros. If the marginal rate is 41%, the saving rises to 3,280 euros.

Tax treatment at exit

Life insurance (after 8 years):

• Annual allowance of 4,600 euros (9,200 euros for a couple) on gains
• Beyond: 7.5% tax (+ 17.2% social-security levies) if total contributions do not exceed 150,000 euros
• Or a flat tax of 12.8% (+ 17.2% social-security levies) beyond 150,000 euros of contributions

PER (capital exit):

• The portion corresponding to deductible contributions is subject to income tax (progressive scale)
• Gains are subject to the 30% flat tax (12.8% + 17.2% social-security levies)
• No allowance

PER (annuity exit):

• The annuity is subject to income tax after a 10% allowance
• Plus social-security levies

Estate transfer

Life insurance: Very advantageous tax treatment (152,500-euro allowance per beneficiary for contributions before age 70, gains exempt after age 70).

PER: In case of death before retirement, treatment depends on age:

• Before 70: regime similar to life insurance (Article 990 I)
• After 70: reintegrated into the estate (Article 757 B)

The decision tree: PER or life insurance?

To help you choose, here is a decision tree based on your specific situation, with product recommendations:

Your marginal rate is 41% or 45%? --> Priority to PER

Recommended product: Linxea Spirit PER (insurer Spirica)

• Management fees: 0.50% on unit-linked, 0% entry fees
• Over 700 investment vehicles (ETFs, SCPI, OPCVM)
• Amundi MSCI World ETF (CW8) available
• SCPI Corum Origin, Remake Live, Iroko Zen accessible

This is the ideal case for the PER. You deduct at 41-45% while working and will pay tax at 30% or less in retirement.

Worked example with Linxea Spirit PER:

• While working: marginal rate 41%, 10,000-euro contribution = 4,100-euro saving
• Allocation: 70% Amundi MSCI World ETF + 20% bond ETF + 10% Spirica euro fund
• In retirement (marginal rate 30%): 10,000-euro capital withdrawal = 3,000-euro tax
• Net tax benefit: 1,100 euros, plus capital growth over the period (estimated return of 6-7% annualised on a dynamic profile)

Your marginal rate is 30% and will stay at 30% in retirement? --> Priority to life insurance

Recommended product: Linxea Spirit 2 (insurer Spirica)

• Management fees: 0.50% on unit-linked, 0% entry fees
• ~40 ETFs available, including CW8, S&P 500, Emerging Markets
• 25+ SCPI available, with 100% rental-income pass-through
• Spirica Nouvelle Generation euro fund: 2024 return of 3.13%

If your marginal rate is 30% and will remain at 30% in retirement, the PER offers no real tax advantage (you deduct at 30%, you pay at 30%). Life insurance, on the other hand, offers liquidity and very favourable tax treatment after 8 years.

Your marginal rate is 11%? --> Life insurance only

The PER's tax saving at 11% is too small (110 euros for every 1,000 euros contributed) and does not justify locking up capital. Direct all your savings to life insurance.

Recommended product: Linxea Spirit 2 or Lucya Cardif (BNP Paribas Cardif, 0.50% unit-linked fees, over 60 ETFs)

You plan to buy property? --> PER for the down-payment

Early release for the primary residence is a PER-specific feature that makes it an excellent property-savings vehicle. You benefit from the tax advantage at entry and recover the capital for your purchase.

Concrete strategy: Contribute to a Linxea Spirit PER for 5 years with a dynamic allocation (80% MSCI World ETF), then release for the down-payment. The cumulative tax savings partially fund your down-payment.

You are self-employed (TNS)? --> PER with enhanced ceilings

Self-employed workers (travailleurs non salaries) benefit from enhanced deduction ceilings on the PER. Contribute more in high-revenue years. Linxea Spirit PER accepts TNS contributions under the Madelin ceilings.

Your primary goal is estate transfer? --> Life insurance

Life insurance remains the premier estate-transfer tool thanks to the 152,500-euro allowance per beneficiary (for contributions before age 70). The PER does not offer a comparable advantage.

Recommended product: Linxea Spirit 2 -- customisable beneficiary clause, wide range of vehicles to grow the capital to be transferred.

When to prioritise the PER?

Situation 1: High marginal rate while working, low in retirement

Profile: Sophie, 48, CFO in Lyon, marginal rate 41%

Sophie earns 95,000 euros net taxable. Her marginal rate will drop to 30% in retirement. She contributes 10,000 euros per year to her Linxea Spirit PER, invested in Amundi MSCI World ETF (70%) and euro fund (30%).

• Annual tax saving: 10,000 x 41% = 4,100 euros
• Estimated capital in 17 years (retirement at 65): approximately 280,000 euros (at a 6% net return)
• Tax on capital exit (marginal rate 30%): approximately 84,000 euros
• Net tax benefit over time: approximately 25,000 euros (difference between deductions at 41% and taxation at 30%, plus compounding)

Situation 2: Primary residence purchase

Profile: Maxime, 28, engineer, marginal rate 30%

Maxime plans to buy in 5 years. He contributes 5,000 euros per year to a Linxea Spirit PER with a dynamic allocation (80% MSCI World ETF + 20% euro fund).

• Annual tax saving: 5,000 x 30% = 1,500 euros (reinvested in life insurance)
• Capital after 5 years: approximately 29,000 euros (6% net return)
• Early release for primary residence: full capital recovered (taxed at income-tax rates on exit)

Situation 3: Self-employed with irregular income

Self-employed workers (TNS) benefit from enhanced deduction ceilings on the PER. They can contribute more in strong years to reduce their tax bill and contribute nothing in difficult years. Linxea Spirit PER offers full flexibility on contributions (no regular minimum contribution required).

When to prioritise life insurance?

Situation 1: Moderate marginal rate (11% or stable 30%)

Profile: Claire, 35, teacher, marginal rate 11%

Claire earns 28,000 euros net taxable. The PER's tax saving would be negligible (11% of the contribution). She opens a Linxea Spirit 2 with 200 euros in monthly standing orders (70% MSCI World ETF + 30% euro fund).

• No capital lock-up: Claire can recover her savings at any time
• Gentle taxation after 8 years: 4,600-euro annual allowance on gains
• Estimated capital in 20 years: approximately 100,000 euros (5.5% net return)

Situation 2: Liquidity needs

If you have medium-term plans (property purchase in 5 years, business creation, sabbatical), life insurance provides the necessary flexibility. The PER locks you in (except for the primary residence).

Situation 3: Estate-transfer objective

Profile: Bernard, 60, wealth of 400,000 euros, 2 children

Bernard wants to pass on assets to his children under the best conditions. He opens two Linxea Spirit 2 policies with 152,500 euros each, designating one child as the beneficiary of each policy. On his death, each child will receive up to 152,500 euros completely free of inheritance tax.

Situation 4: You have already reached the PER ceiling

Once the deduction ceiling is reached, additional PER contributions are no longer deductible and lose their main advantage. Direct the surplus to life insurance.

The optimal strategy: combine both

For most savers at a marginal rate of 30% or above, the best approach is to combine PER and life insurance. Here is our recommended strategy with specific products:

Step 1: Build an emergency reserve (life insurance)

Before locking money in a PER, ensure you have 3 to 6 months of expenses in readily available savings. A Linxea Spirit 2 in the Spirica Nouvelle Generation euro fund (2024 return: 3.13%) fulfils this role perfectly, while starting the 8-year tax clock.

Step 2: Optimise the tax deduction (PER)

Contribute to your Linxea Spirit PER the amount that maximises your tax saving, staying within your deduction ceilings. For a taxpayer at 41% with a ceiling of 10,000 euros, the 4,100-euro benefit is significant.

Recommended PER allocation (retirement horizon > 15 years):

• 60% Amundi MSCI World ETF (CW8) -- fees 0.38%
• 20% Amundi S&P 500 ETF -- fees 0.15%
• 10% SCPI Epargne Pierre -- yield 5.28%
• 10% Spirica euro fund -- return ~3%

Step 3: Save the surplus (life insurance)

Everything you can save beyond your optimal PER contribution goes into the Linxea Spirit 2 life insurance. This wrapper will serve simultaneously as a retirement supplement, a liquidity reserve and an estate-transfer tool.

Recommended life insurance allocation (horizon > 10 years):

• 50% Amundi MSCI World ETF (CW8) -- fees 0.38%
• 15% SCPI (Remake Live + Iroko Zen) -- yield 7-7.5%
• 15% Bond ETF -- fees 0.14%
• 20% Spirica euro fund -- return ~3%

Example of a combined strategy for a couple (marginal rate 30%)

Annual tax saving on PERs: 10,000 x 30% = 3,000 euros, which can be reinvested in life insurance no. 2, creating a virtuous circle.

20-year projection (weighted average return of 5.5% net):

• Total PER capital: approximately 200,000 euros (before exit tax)
• Total life insurance capital: approximately 340,000 euros (gentle taxation after 8 years)
• Cumulative reinvested tax savings: approximately 90,000 euros (with compounding)

Summary table: PER vs life insurance

The choice between PER and life insurance is not binary. These two wrappers are complementary and, used together strategically, allow you to optimise taxation during your working life, income in retirement and estate transfer. The key is to choose high-performing, low-fee policies: Linxea Spirit PER and Linxea Spirit 2 are our reference combination.