Fourgous and PACTE transfers (French life insurance)
Mechanisms allowing a life insurance contract to be converted or transferred to another contract with the same insurer without losing its tax seniority.
In life insurance, a contract's age has tax value: it opens the eight-year benefit and, for the oldest contracts, even more favorable regimes. Changing contracts normally means surrendering the old one, paying tax on the gains, and starting from zero. The law of 26 July 2005, through the so-called Fourgous amendment, created a first exception: converting, with the same insurer, a contract invested only in euros into a multi-fund contract, without losing seniority, provided part of the savings is invested in unit-linked funds. The 2019 PACTE law broadened the principle: a policyholder may transfer all or part of a contract to another contract with the same insurer, for example a newer, cheaper one, keeping its seniority, on condition that a share is invested outside the euro fund. A transfer to another insurer, however, is still treated as a surrender. These mechanisms pursue a public policy aim, channeling savings toward financing companies, and a limited competition aim: they open mobility within one house, not between houses. Full portability exists today only for the retirement savings plan.
A saver has held a euro contract since 1998 with a 1 percent annual charge. Her insurer offers a recent contract at 0.6 percent; thanks to the PACTE transfer, she moves her savings into it while keeping the 1998 date, on condition that she invests a share in unit-linked funds.
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.