Assurance Vie (“life insurance” in French) isn’t just life cover — it’s one of France’s most powerful wealth-building and tax-efficient investment vehicles. It’s especially attractive for expats and retirees because it combines flexible investing with powerful tax and inheritance planning benefits.

In this updated guide you’ll learn:

• What Assurance Vie is and how it works
• Key tax and withdrawal rules in 2026
• Inheritance planning advantages
• Practical tips for expats and retirees

An Assurance Vie is a tax-advantaged investment wrapper offered by insurance companies. It allows you to invest in a wide range of assets — from capital-guaranteed fonds en euros to unit-linked funds (equities, bonds, property funds, ETFs, etc.) — inside a single contract.

While technically a type of life insurance contract under French law, it functions mainly as a flexible investment and savings vehicle — not just protection.

Assurance Vie has become a cornerstone of French savings for several reasons:

• Tax-efficient growth

Your investments grow inside the contract without annual income or CGT charges. You’re only taxed when you withdraw — and only on gains, not your capital.

• Flexible access to capital

Unlike pensions, you can access your money any time. There’s no minimum age to start withdrawals.

• Estate planning advantages

You can nominate beneficiaries directly, often avoiding French forced heirship rules.

• Diversification & optional currencies

Many contracts allow investments beyond euros and offer diversified funds from multinational managers.

France’s Assurance Vie market continues to grow strongly — with over €2 trillion in assets — as savers seek both tax efficiency and diversification.

You pay premiums (lump sum or regular contributions) into a policy. The insurer then invests those funds according to your chosen strategy:

✔ Fonds en euros – secure, capital-protected (though yields are moderate)
✔ Unit-linked (UC) – exposure to stocks, bonds, property funds, and more

You can switch between funds without triggering tax events — enabling strategic portfolio changes as markets evolve.

• Key principle:
  ✔ You are taxed only on the growth element of any withdrawal (called a rachat).
  1. Tax on Withdrawals

  Contract Age	Income Tax	Social Charges	Total
  <8 years	12.8%	17.2%	30%
  ≥8 years	7.5%*	17.2%	~24.7%*

  * After 8 years, gains can be taxed at 7.5% income tax plus social charges on the first €150,000 of premiums per person. Amounts above this pay the flat 30% total tax (12.8% + 17.2%).

  1. Annual Tax-Free Allowances After 8 Years

  Once your contract is 8+ years old, you benefit from annual allowances on growth:

  ✔ €4,600 per individual
  ✔ €9,200 per couple

  Gains within those limits are income-tax free (social charges may still apply).

Assurance Vie is especially powerful for legacy planning for both French residents and many expats.

Legacy Tax Benefits

• €152,500 tax-free per beneficiary for premiums paid before age 70
• Amounts above this are taxed at 20% up to €700,000, and 31.25% beyond

Special Rules

• If you fund the policy after age 70, the allowance drops to €30,500 total across all beneficiaries.
• Spouses & PACS partners are fully exempt from inheritance tax on the benefit.

⚠️ A proposed French tax reform could revisit inheritance taxation on very large contracts (aligning them with standard succession tax rates up to 45%), but this was not adopted in the 2025 Finance Law — though the topic may resurface.

While powerful, Assurance Vie isn’t suitable for everyone without careful planning.

⚠️ High Fees

Some policies, especially those sold to expats, carry management fees above 3% and surrender charges that erode returns.

⚠️ Exit Penalties

Early withdrawals or switching to another provider can trigger loss of tax benefits in some cases.

⚠️ Wealth Tax (IFI)

Contracts are generally excluded from France’s real-estate wealth tax (IFI), unless they hold property funds where your total real estate portfolio exceeds €1.3M.

⚠️ Non-EU Contracts

Assurance Vie products from outside the EU (e.g., UK, Isle of Man) may face less favourable French tax treatment if not fully compliant.

When selecting a policy, consider:

• Regulatory Compliance

Ensure the provider has a French fiscal representative so you retain full tax and inheritance benefits.

• Investment Options

Look for wide UC access and strong fund managers, aligned with your risk tolerance and retirement timeline.

• Fees & Transparency

Choose low fee structures and transparent exit terms — especially important for long-term planning.

• Currency Options

If you’re funding in GBP, USD, or CHF, ensure the contract supports it.

Tip: Work with advisers familiar with both French tax rules and your home country tax system to avoid cross-border pitfalls.

✔ Start Assurance Vie early — longer contracts unlock more tax advantages.
✔ Use it as part of a broader retirement plan, alongside pensions and taxable accounts.
✔ Review periodically to rebalance assets and adapt to your life stage.

If you’d like a personalised review of your situation, tailored to your residency status and retirement goals, feel free to contact us — we offer private consultations to help you make the most of Assurance Vie.

If you want some more tips about life in France as an expat, check out our guide here to learn everything you need to know.