ASSURANCE VIE

The assurance vie is France's most popular investment wrapper, with total assets under management reaching €2,107 billion at end 2025, far ahead of the Livret A and LDDS regulated savings accounts which together total around €615 billion. Far more than a simple savings product, it is a powerful wealth management tool that allows you to grow your capital in a tax-efficient environment and pass it on to your beneficiaries under highly favourable conditions.

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An assurance vie is primarily a tax-efficient wrapper within which an investor can hold different types of assets, either in guaranteed form through the fonds euros, or through units of account (UC) invested in equities and bonds. In 2025, new contributions followed a similar pattern to previous years, with approximately 60% directed towards the fonds euros and 40% towards units of account.

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With the average fonds euros yield estimated at 2.65% gross in 2025 (before social charges of 17.2% and capital gains tax), and the Livret A savings rate down to 1.7%, the assurance vie is regaining its appeal. A growing number of investors seeking better returns are turning to units of account, most commonly in the form of collective investment funds (OPCVM).

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Not all assurance vie contracts are equal : they do not all provide access to the same fonds euros or the same units of account, and charges (entry fees, annual management fees) can vary significantly from one contract to another and from one distributor to another. Choosing the right assurance vie is therefore essential. At Optimal Conseil Patrimoine, we guide you through this process independently, with no entry fees, favouring ETF-based allocations to maximise the net performance of your investment.

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The tax advantages of the assurance vie fall into two main categories:

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1) Taxation during the life of the contract

As long as no withdrawal is made, there is no tax on unrealised gains, allowing you to compound your investment over many years with no tax liability. The one exception concerns social charges applied to the fonds euros portion, which are deducted once a year.

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For withdrawals made before 8 years, gains are taxed at the flat rate (PFU) of 30%, comprising 17.2% social charges and 12.8% capital gains tax.

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After 8 years, investors benefit from an annual tax-free allowance of €4,600 (€9,200 for a couple) on gains. Beyond this allowance, a reduced rate of 7.5% applies, rising to 12.8% if total assurance vie holdings exceed €150,000.

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Example: €90,000 is invested in a contract which grows to €100,000 after 5 years. The contract is therefore made up of 90% capital and 10% gain. On a withdrawal of €20,000, tax at 30% applies only to the gain element within that withdrawal, i.e. 30% of €2,000, giving a tax bill of €600. Had the same withdrawal been made after 8 years, only social charges of 17.2% would have applied, giving a tax bill of €344.

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2) Inheritance on death

On the death of the policyholder, the assurance vie allows up to €152,500 per beneficiary to be transferred free of inheritance tax, for premiums paid before the age of 70. Beyond this allowance, a tax rate of 20% applies up to €700,000 per beneficiary, then 31.25%. For premiums paid after age 70, a global allowance of €30,500 applies to the premiums paid, with any interest remaining exempt. Both allowances can be combined.

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At Optimal Conseil Patrimoine, we will work with you to build a diversified and personalised allocation, tailored to your profile and objectives. This may include a fonds euros component for security, alongside units of account invested in equities, bonds and alternative assets. We favour well-performing, low-cost funds, making extensive use of ETFs to maximise the net return on your investment.

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We are committed to helping you select the right contract for your needs, with no entry fees and full transparency on all costs and charges. Our transparency and objectivity are at the heart of everything we do.