Life insurance for company directors in France: benefits, tax rules and trade-offs in 2026

For a company director in France who regularly generates personal surplus — through salary, dividends, or the proceeds of a business sale — the question of where to invest that money arises quickly. Assurance-vie (the French life-insurance savings wrapper) comes up almost every time, often by reflex, sometimes for the right reasons, and rarely with all the facts on the table.

As an accounting firm, our role is not to recommend specific contracts or investment products: that falls within the regulated scope of a conseiller en gestion de patrimoine (wealth manager, or CGP) authorised by the AMF. What we can do is clarify the tax framework, map the key trade-offs, and highlight the mistakes we see repeatedly in directors' files. That is what this article covers.

Direct answer: in 2026, assurance-vie remains a sound option for a director who wants to combine liquidity, diversification, and estate planning. Its tax treatment after eight years is genuinely favourable (social levies held at 17.2%, reduced income tax within annual allowances), and the per-beneficiary inheritance allowance of 152,500 euros on premiums paid before age 70 makes it a strong transmission vehicle. It does not replace a well-structured remuneration plan or a PER (French retirement savings plan), but it complements both.

The question starts from a concrete reality: a director typically accumulates constraints that salaried employees do not face. Wealth is often concentrated in the business, pension provision is limited, and personal liquidity depends directly on remuneration and distribution decisions. Assurance-vie addresses several of these constraints at once.

First advantage: liquidity. Unlike a PER, whose funds are locked until retirement except in exceptional circumstances, assurance-vie allows partial withdrawals at any time. For a director who may need capital quickly — an investment opportunity, a sudden drop in activity, a personal project — that flexibility has real, practical value.

Second advantage: diversification. Most directors' wealth is already concentrated in property and in the value of their business. Assurance-vie introduces other asset classes without committing capital to a heavy legal structure.

Third advantage: estate planning. This is often the decisive argument. Sums passed on through assurance-vie sit outside the standard French succession framework. Premiums paid before age 70 benefit from a 152,500 euro allowance per named beneficiary, which represents a significant inheritance advantage for a director who plans ahead.

Fourth advantage: tax efficiency that compounds over time. The wrapper improves with age. After eight years, withdrawal tax becomes materially lower, and partial withdrawals within the annual allowance can be taken without surrendering the policy.

Our reading#

In the files we handle, assurance-vie adds the most value when it is opened early in a director's career — even with a modest initial premium. The eight-year tax clock starts on the date the policy is opened, not on the date of subsequent contributions. Opening a policy at 40 with 5,000 euros rather than at 48 with 80,000 euros means gaining eight years of favourable tax treatment on all future withdrawals.

This is the area where confusion is most common. The following rules apply to premiums paid after 27 September 2017.

Tax on withdrawals#

Key point for 2026: social levies on assurance-vie remain at 17.2%, not 18.6% as applied to dividends and capital gains on securities. Assurance-vie is explicitly excluded from the CSG increase that applies to other capital income (source: impots.gouv.fr, "L'assurance-vie et le PEA"). That 1.4 percentage point difference matters on substantial balances.

The annual allowance after eight years is 4,600 euros for a single person and 9,200 euros for a couple. Gains within this limit are exempt from income tax, but the 17.2% social levy still applies.

Tax on inheritance transfers#

The 152,500-euro per-beneficiary allowance on premiums paid before 70 is assurance-vie's primary estate-planning advantage. A director who names two children as beneficiaries can pass on up to 305,000 euros outside the standard succession and inheritance tax framework. The beneficiary clause must be drafted carefully: an imprecise or outdated clause can cancel this benefit entirely.

Worked example#

A 55-year-old director has paid 200,000 euros into a policy opened ten years ago. Accumulated gains stand at 40,000 euros. He makes a partial withdrawal of 15,000 euros, of which 3,000 euros represents gains on a proportional basis.

• Annual allowance available: 4,600 euros (single filer)
• Gains within allowance: 3,000 euros < 4,600 euros, so income tax = 0
• Social levies: 3,000 x 17.2% = 516 euros
• Effective overall rate: 17.2%

If the same withdrawal had been made before the eight-year mark, the tax charge would have been 3,000 x 30% = 900 euros. The difference accumulates significantly over years of regular partial withdrawals.

This is the most common trade-off we discuss with directors who are actively building savings. The two wrappers follow different logic and are not mutually exclusive.

What the PER offers that assurance-vie does not#

The PER (plan d'épargne retraite, France's individual retirement savings plan) allows contributions to be deducted from taxable income, up to the annual retirement savings ceiling. For a director in the 41% or 45% income tax band, that deductibility delivers an immediate and substantial tax reduction. The trade-off is that funds are locked until retirement, except in specific circumstances: disability, judicial liquidation, expiry of unemployment rights, death of a spouse, over-indebtedness, or purchase of a primary residence.

What assurance-vie offers that the PER does not#

Assurance-vie preserves liquidity. Its estate-planning mechanics are stronger: the 152,500-euro per-beneficiary allowance has no equivalent in the PER. There is no ceiling on contributions. And it can serve as a personal reserve for a director navigating a period of lower activity.

Quick decision table#

Our view: for a director who has adequate pension provision (or who already contributes via a Madelin or company PER scheme), assurance-vie is often the right complement. For a director in a high tax band who is still building retirement rights, the PER may take priority. A combination of both, with a considered allocation between the two, is often more effective than an either-or decision.

This question comes up less often but deserves a clear answer.

The direct comparison#

The underestimated risk: many directors open a securities account because they find assurance-vie less transparent on fees. That reasoning is partial. On significant balances, the post-eight-year tax advantage of assurance-vie typically offsets management fees, particularly when the wrapper also serves an estate-planning purpose.

Practical scenario#

A 52-year-old director receives a net dividend of 120,000 euros after withholding tax. She is weighing a securities account against an assurance-vie policy. She already owns a buy-to-let property and her primary residence. Her main objective is to transfer wealth to her two children in 15 to 20 years.

In this context, assurance-vie is the natural fit. The 120,000 euros paid in before age 70 will sit within the 152,500-euro per-beneficiary allowance. On a securities account, the same capital would be subject to standard inheritance tax on death. The potential difference over a 20-year horizon is substantial.

Assurance-vie is not a single product. It typically contains two main investment options with radically different risk profiles.

Fonds euros (guaranteed fund): capital is guaranteed. Returns are modest — broadly 2 to 2.5% net for the best contracts in 2025, figures to be checked for current contracts. This option suits a precautionary reserve or a conservative portion of the portfolio. It is not designed for long-term capital growth.

Units of account (unités de compte): no capital guarantee. The director invests across a range of vehicles — equity funds, ETFs, REITs, bond funds, and in some contracts, private equity. The risk of capital loss is real and must be explicitly accepted. In return, the long-term return potential is significantly higher.

Our reading: for a director with a 15 to 20-year horizon and the capacity to absorb market volatility, a predominantly unit-of-account allocation is generally more consistent with a transmission and wealth-building objective. A euros-fund component can still be maintained to cover short-term withdrawal needs. The right split between the two depends on personal risk profile — and that is precisely the work of a regulated wealth manager.

1. Check that the clause reflects your current family situation. A policy opened before a divorce, remarriage, or the birth of a child may contain a clause that is no longer appropriate.
2. Be precise. "My spouse" can create complications if marital status has changed. Prefer a clause naming beneficiaries by full name and date of birth.
3. Provide for representation. If a named beneficiary predeceases you, who receives their share? The clause must address this.
4. Avoid contradictions with your will. Assurance-vie sits outside the estate, but conflicts can arise if documents are inconsistent.
5. Review the clause after every major family event: marriage, civil partnership, divorce, birth, or death of a named beneficiary.

Assurance-vie is not a starting point. It fits into a sequence of decisions we work through with our clients.

Step 1: calibrate remuneration. Before investing, set a remuneration policy — salary, dividends, profit-sharing — that is consistent with your tax and social security position. See our guide on director remuneration planning.

Step 2: build a liquidity reserve. Three to six months of personal outgoings, immediately accessible. The Livret A pays 1.5% and the LEP pays 2.5% (rates effective 1 February 2026) for eligible savers.

Step 3: consider assurance-vie. Once the reserve is in place and remuneration is structured, assurance-vie can receive surplus personal cash in a medium-to-long-term framework.

Step 4: layer in a PER where deductibility adds value. For directors in the 41% or 45% bracket, the PER can complement assurance-vie by capturing the upfront tax deduction.

Step 5: structure transmission. Beneficiary clause, alignment with any will or gifts, anticipation of inheritance tax exposure.

• Opening a policy without a defined objective: without a clear horizon, no allocation can be coherent.
• Paying premiums after age 70 without having planned ahead: the allowance drops from 152,500 euros per beneficiary to a global 30,500 euros across all beneficiaries.
• Overlooking fees: a traditional bank contract with 3% entry fees and 1% annual management charges can erase much of the tax advantage.
• Leaving the entire balance in the guaranteed fund by default: for a long horizon, this is almost always sub-optimal.
• Failing to update the beneficiary clause for years.
• Confusing personal assurance-vie with a corporate capitalisation contract: these are distinct wrappers with different tax treatment and objectives.

Assurance-vie always needs to be assessed alongside your remuneration structure, personal tax position, and transmission objectives. We can frame that conversation with you, in coordination with your wealth manager if you have one.

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For information only — not investment advice. This article is written for informational purposes by Hayot Expertise, a chartered accountancy firm based in Paris. It describes the French tax and legal framework applicable in 2026 but does not constitute personalised investment advice within the meaning of AMF regulations. Decisions about financial and insurance products depend on your individual circumstances, risk profile, and objectives; they require the involvement of a regulated wealth manager (CGP). Tax rules may change; verify all thresholds and rates at the time of your decision. Last updated: 26 May 2026.