Disability savings and survivor care contracts (France)

French law provides two contracts for disabled people, covered by article 199 septies of the General Tax Code. The disability savings contract is taken out by the disabled person, when an infirmity prevents the person from working under normal conditions of profitability; lasting at least six years, it lets the person build a lump sum or an annuity. The survivor care contract is taken out by a parent, or a relative, for the benefit of a disabled child: on the policyholder's death, the insurer pays the child a lump sum or lifetime annuity, which provides for the child's needs when the parents are gone. Premiums on both contracts give rise to a 25 percent tax reduction, within a common annual cap of 1,525 euros, increased by 300 euros per dependent child. The annuity received by the disabled person is disregarded, up to a limit, in calculating the disabled adult allowance, so that private savings are not canceled out by a cut in public benefits. For the insurer, the survivor care contract poses a pricing problem: mortality tables for disabled people are poorly documented, and the payment period depends on two lives at once.