152,500 EUR Life Insurance Allowance Simulator

Article 990 I of the French Tax Code provides a specific tax regime for death benefit capital transmitted through life insurance for contributions made before the insured person turns 70:

• 152,500 EUR allowance per beneficiary: Each designated beneficiary benefits from their own allowance. With 3 beneficiaries, the amount transmitted tax-free reaches 457,500 EUR.
• Tax schedule beyond the allowance: 20% on the first 700,000 EUR taxable per beneficiary, then 31.25% beyond.
• Comparison with standard law: Under standard inheritance law, the allowance is only 100,000 EUR per child, with a progressive scale from 5% to 45%. Life insurance therefore offers a significant advantage.

Formula: Taxable amount = Capital - (152,500 EUR x Number of beneficiaries). Tax = Taxable per beneficiary x 20% (up to 700,000 EUR) + surplus x 31.25%.

The 152,500 EUR allowance is the central pillar of the inheritance advantage of French life insurance. Established by Article 990 I of the French Tax Code, it constitutes a derogatory tax regime compared to standard inheritance duties. To fully benefit from it, one must master its rules of application and its limits.

An allowance per beneficiary, not per contract

This is a fundamental point: the 152,500 EUR allowance applies per designated beneficiary, not per life insurance contract. If the same beneficiary is designated on three different contracts with three insurers, all death benefit capital received by that beneficiary is aggregated and a single allowance of 152,500 EUR applies to the total.

Conversely, if you designate three different beneficiaries on a single contract, each has their own 152,500 EUR allowance. The total usable allowance then reaches 457,500 EUR. This is why multiplying beneficiaries is the first optimization strategy.

Age condition: contributions before age 70 only

Article 990 I only applies to premiums paid before the insured person's 70th birthday. This condition is crucial. The premiums paid, the gains generated by these premiums, and the corresponding share of death benefit capital all benefit from the 152,500 EUR allowance per beneficiary.

Beyond the allowance, the specific schedule of Article 990 I applies:

• 20% levy on the taxable fraction between 0 and 700,000 EUR per beneficiary.
• 31.25% levy on the taxable fraction exceeding 700,000 EUR per beneficiary.

This schedule is much more favorable than standard inheritance duties, which can reach 45% in direct line and 60% for third parties.

Article 757 B: the regime for contributions after age 70

Article 990 I should not be confused with Article 757 B of the French Tax Code, which governs contributions made after age 70. The regime is significantly different and less advantageous:

• Global allowance of only 30,500 EUR, shared among all beneficiaries (not per beneficiary as for 990 I). With 3 beneficiaries, each only has 10,167 EUR of allowance.
• Beyond this allowance, standard inheritance duties apply, based on the family relationship between the insured and the beneficiary.
• However, interest and capital gains generated by contributions made after 70 are totally exempt from duties. Only the premiums paid are included in the tax base.

This exemption of post-70 gains can be very advantageous for a policyholder who contributes a significant sum at 71 and lives another 15 or 20 years: the accumulated gains (potentially exceeding the premiums paid) are transmitted completely tax-free.

Summary table of both regimes

To clearly summarize the differences between the two articles:

• Article 990 I (before 70): 152,500 EUR allowance per beneficiary, specific schedule at 20% then 31.25%, base = death capital (premiums + gains), spouse fully exempt.
• Article 757 B (after 70): global 30,500 EUR allowance for all beneficiaries, standard inheritance duties, base = premiums paid only (gains exempt), spouse fully exempt.

The optimal strategy is to maximize contributions before 70 to benefit from the most favorable regime, while knowing that contributions after 70 retain real value thanks to the exemption of gains.

Life insurance is the most powerful estate planning tool in French law. However, it must be used strategically to fully exploit its potential. Here are the main optimization techniques to know.

Designate multiple beneficiaries to multiply allowances

Since the 152,500 EUR allowance applies per beneficiary, each person designated in the beneficiary clause opens the right to their own allowance. For a family with three children, the total allowance reaches 457,500 EUR (3 x 152,500 EUR), nearly half a million euros transmitted without any taxation.

It is possible to go further by also designating grandchildren, nephews, or even third parties (friends, charities). With six beneficiaries, the total allowance reaches 915,000 EUR. This strategy is particularly relevant for large estates.

Prioritize contributions before age 70

Given the major difference between Articles 990 I and 757 B, it is essential to contribute the maximum to your life insurance contracts before turning 70. A saver aged 65 who has significant savings capacity should accelerate contributions in the following five years.

This does not mean you should stop contributing after 70. Post-70 contributions remain valuable for estate planning thanks to the exemption of gains. But the main effort should be concentrated before this milestone.

The split beneficiary clause: usufruct and bare ownership

The split beneficiary clause is a sophisticated tool that allows capital transmission across two generations while optimizing taxation. The principle: the surviving spouse receives the quasi-usufruct of the capital (they have use of it and can spend it freely), while the children receive bare ownership (they will become full owners upon the spouse's death).

The advantages of this technique are multiple:

• The spouse is fully exempt from life insurance inheritance tax, regardless of the amount received in quasi-usufruct.
• The bare-owner children each benefit from the 152,500 EUR allowance on the bare ownership value (which is lower than full ownership, according to a tax schedule based on the usufructuary's age).
• Upon the usufructuary spouse's death, the children recover full ownership of the capital without any additional duties, thanks to the natural extinction of the usufruct.

Example: a clause written "My spouse in quasi-usufruct and my children in bare ownership, in equal shares" allows the spouse to use the capital while preserving the children's rights.

Practical example: a family with 3 children

Consider Jacques, aged 62, who holds 600,000 EUR in life insurance contributed before age 70. His beneficiary clause designates his three children in equal shares (200,000 EUR each).

• Each child benefits from the 152,500 EUR allowance.
• The taxable share per child is 200,000 - 152,500 = 47,500 EUR.
• The 20% levy applies: 47,500 x 20% = 9,500 EUR per child.
• Total tax: 3 x 9,500 = 28,500 EUR.
• Net capital transmitted: 600,000 - 28,500 = 571,500 EUR, i.e., an effective rate of only 4.75%.

Under standard inheritance law, with an allowance of 100,000 EUR per child, the duties would have been significantly higher (approximately 58,000 EUR in total with the progressive direct-line scale). The saving achieved through life insurance is nearly 30,000 EUR in this example.

If Jacques had also designated his 4 grandchildren as beneficiaries, the total allowance would have reached 7 x 152,500 = 1,067,500 EUR, easily covering the 600,000 EUR capital with no tax at all.

The 152,500 EUR allowance is a major tax lever, but its optimal use requires anticipatory and structured estate planning. Several advanced techniques maximize its effectiveness within a comprehensive estate strategy.

Strategic allocation between contracts and beneficiaries

To fully exploit the allowance, it is recommended to calibrate the capital of each contract based on the number of beneficiaries. If you have 450,000 EUR to transmit via life insurance and three children, allocate 150,000 EUR per child to stay just below the 152,500 EUR threshold and avoid any taxation. If your capital is higher, consider designating additional beneficiaries (grandchildren, nephews) to multiply the allowances. You can also open separate contracts for each beneficiary to facilitate management and tracking. The key is to ensure that the beneficiary clauses of all your contracts are consistent with each other and reflect your transmission wishes.

Life insurance and the Dutreil pact: two complementary tools

For business owners, life insurance can be combined with the Dutreil pact(Article 787 B of the French Tax Code), which allows a 75% exemption on the value of shares transmitted by succession or gift, subject to conservation and management conditions. By placing the non-business portion of your wealth in life insurance (cash, financial investments), you benefit from the 152,500 EUR allowance on this capital, while business shares benefit from the Dutreil exemption. This combination allows transmitting considerable professional and financial wealth with very reduced taxation.

Planning cross-generational transfers

Life insurance allows you to skip a generationfor tax purposes. By directly designating your grandchildren as beneficiaries, each benefits from the 152,500 EUR allowance, without the capital having to pass through the intermediate generation (your children). This strategy is particularly relevant when your children already have sufficient wealth and you wish to help the next generation. It also avoids double taxation: without this strategy, the capital would first be taxed at your children's succession, then a second time at your grandchildren's succession. With direct transmission via life insurance, you eliminate one level of taxation. For wealth of 900,000 EUR with six grandchildren, the total allowance reaches 915,000 EUR, allowing entirely tax-free transmission.

The importance of contribution timing

The date of contributions to your life insurance contracts has a determining tax impact. Contributions made before October 13, 1998 benefit from total exemption from inheritance duties, with no limit on amount or age. For contributions after this date but made before age 70, Article 990 I with the 152,500 EUR allowance applies. It is therefore essential not to confuse these different regimes and to plan your contributions accordingly. If you are approaching 70, accelerate your contributions to maximize the benefit of the most favorable regime. After 70, contributions remain relevant thanks to the exemption of gains (Article 757 B), but their planning must account for the reduced global allowance of 30,500 EUR shared among all beneficiaries.