Life insurance: how does it work?
According to data from France Assureurs, life insurance is going through a period of record inflows: €19.3 billion in net inflows in the first quarter of 2026, i.e. +€5.7 billion over a rolling twelve months. In the single month of March, gross contributions reached €18.3 billion, bringing the market's annual growth to +14%. This resurgence coincides with the cut in the Livret A rate to 1.5% in February 2026, which led many savers to redirect their savings towards potentially more rewarding products.
With close to €2,000 billion in assets under management, life insurance remains one of the financial products most widely used by French households — favoured for its flexibility, its tax characteristics and its inheritance-planning possibilities.
Discover how a life insurance policy works and why it continues to appeal to so many savers.
What are the advantages of life insurance?
Life insurance is an effective way to strengthen and stabilise your wealth while benefiting from a specific tax framework. In terms of flexibility and gentle taxation, this savings vehicle is very attractive.
Saving in a euro fund (government bonds, corporate bonds, real estate, etc.) suits cautious profiles, whereas a bolder investor may opt for a multi-vehicle policy, investing in unit-linked funds (equities, funds, etc.). This involves more risk, but also greater potential for capital growth. Find out more about the advantages of multi-vehicle policies.
Life insurance stands out for its flexibility: a policy can be partially or fully withdrawn at any time — the funds are generally paid out within a few weeks (maximum legal time limit: 2 months). Contributions are flexible in amount and frequency, within the minimum thresholds set by the insurer. Finally, the taxation of gains is reduced after 8 years, with an annual tax allowance of €4,600 (or €9,200 for a couple) and a reduced rate of 7.5%. Discover the details of the tax advantages of life insurance.
More invested capital
Non-contractual document for advertising purposes. Investment in unit-linked funds carries a risk of capital loss, since their value is subject to fluctuation, both upward and downward, depending in particular on the performance of the financial markets. The insurer guarantees the number of units, not their value, which it does not guarantee. The e-vie life insurance policy is an individual life insurance policy, denominated in euros and/or in unit-linked funds, underwritten by Generali Vie, a company governed by the French Insurance Code. Finary SAS — 58 rue de Monceau 75380 Paris 8 — Investment Firm authorised by the ACPR under no. 19283, ORIAS no. 21001279, member of AMAFI
Diversifying your investment portfolio with a life insurance policy
Life insurance offers a flexible investment wrapper that everyone can manage according to their profile and objectives. The type of policy chosen (single-vehicle or multi-vehicle) greatly influences how investments are allocated.
In a single-vehicle policy, the capital is placed exclusively in a euro fund, a vehicle with capital guaranteed by the insurer, made up mainly of government bonds. For multi-vehicle policies, diversification takes place through investments in equities, ETFs, SCPI (a French non-listed real-estate investment fund, comparable to a REIT), bonds or various funds. The investor can even redirect part of the capital towards less liquid investments such as private equity, offering higher return potential in exchange for illiquidity and an increased risk of capital loss. Learn how to diversify your portfolio with a life insurance policy.
Life insurance and retirement
Preparing for retirement is crucial, and life insurance can play a central role in this respect. Policyholders save as they wish, with no imposed amount, which allows them to set aside part of their monthly income throughout their career. By diversifying their portfolio and controlling their fees, future retirees can initially take risks with multi-vehicle policies, then turn to less risky investment options as retirement approaches. Discover how to prepare for your retirement with a life insurance policy. To estimate the growth of your savings over time, our life insurance simulator can help you project your future capital.
Inheritance and life insurance
Life insurance is an effective tool for passing on wealth, allowing up to €152,500 to be transferred per beneficiary free of inheritance tax for contributions paid before the age of 70. For payments made after the age of 70, an overall tax allowance of €30,500 (shared among all beneficiaries) is applied before inheritance tax is calculated. The capital gains generated by the policy are, for their part, exempt from inheritance tax. Find out more about the inheritance advantages of life insurance.
- Life insurance offers advantageous taxation in inheritance, with favourable tax allowances and tax rates, in particular for payments made before the age of 70 (exemption up to €152,500 per beneficiary)
- The subscription date and the age at the time of payments influence taxation: policies taken out before 20/11/1991 and payments made before 13/10/1998 benefit from particular tax advantages.
- The precise wording of the beneficiary clause is crucial to optimise the transfer, with the possibility of designating second-rank beneficiaries or opting for a split-ownership clause (usufruct/bare ownership).
within your reach
Non-contractual document for advertising purposes. Investment in unit-linked funds carries a risk of capital loss, since their value is subject to fluctuation, both upward and downward, depending in particular on the performance of the financial markets. The insurer guarantees the number of units, not their value, which it does not guarantee. The e-vie life insurance policy is an individual life insurance policy, denominated in euros and/or in unit-linked funds, underwritten by Generali Vie, a company governed by the French Insurance Code. Finary SAS — 58 rue de Monceau 75380 Paris 8 — Investment Firm authorised by the ACPR under no. 19283, ORIAS no. 21001279, member of AMAFI
Conclusion
Life insurance can fit into a diversified wealth strategy, thanks to its flexibility, its tax framework and its inheritance-planning possibilities. Taking the time to analyse your investor profile makes it possible to adapt the level of risk to your objectives and your investment horizon. Comparing the offers on the market — particularly on management fees — remains decisive over the long term. If in doubt, the support of an adviser can be useful to refine your choices.
Regulatory disclaimers: Marketing communication. Investing carries a risk of partial or total capital loss. Past performance is not a reliable indicator of future performance. This article is provided for information and educational purposes only; it does not constitute personalised investment advice, a buy or sell recommendation, or tax advice. The capital guarantee on euro funds is provided by the insurer and depends on its financial strength. In a severe systemic crisis, the French "Sapin 2" law allows withdrawals to be temporarily restricted (liquidity), without affecting the guaranteed capital. Unit-linked funds are not guaranteed and carry a risk of capital loss. Before investing, read the Key Information Document (KID) and, where relevant, consult an authorised adviser. Finary SAS, an investment firm authorised by the ACPR (no. 19283), member of AMAFI. Insurance broker registered with ORIAS (no. 21001279), member of the CNCGP (association approved by the AMF). PSAN registered with the AMF (no. E2022-057).
