Life Insurance at Death in France: Article 757 B,Article 990 I and the €152,500 Abatement

The Two-Track System

French taxation of life insurance at death is built around two key dates: 20 November 1991 (contracts subscribed from that date are subject to the special regimes) and the insured's 70th birthday (premiums paid before 70 are subject to Art. 990 I; premiums paid after 70 are subject to Art. 757 B succession duty). For contracts subscribed before 20 November 1991, only premiums paid after 13 October 1998 are subject to Art. 990 I regardless of the insured's age.

Article 757 B in Detail: Post-70 Premiums

The €30,500 shared abatement

The €30,500 abatement is shared among all beneficiaries of all contracts written on the same insured, in proportion to each beneficiary's share of the taxable premiums. It is not per beneficiary. Beneficiaries who are exempt from succession duty (surviving spouse/PACS) are excluded from the pro-rata calculation, which increases the abatement available to taxable beneficiaries. After the €30,500 abatement, the balance is taxed at the succession duty tariff applicable to the relationship between the insured and the beneficiary. Any unused portion of the beneficiary's personal succession abatement may be applied to reduce the Art. 757 B taxable base.

Representation does not apply under Art. 757 B

The tax authority takes the position that representation never applies for Art. 757 B purposes: a grandchild designated as beneficiary "mes enfants vivants ou représentés" is taxed on their own kinship with the insured (typically the in-line rate), not their deceased parent's. This creates a double liquidation where the grandchild may be taxed in the ordinary succession (where representation applies) and separately as life insurance beneficiary. The double liquidation can be advantageous or disadvantageous depending on whether the succession abatement is fully used.

Co-insured contracts

For jointly-subscribed contracts with co-insureds, only the premiums paid after the last surviving insured's 70th birthday are relevant for Art. 757 B. Practically, premiums should stop once the oldest co-insured reaches 70 — unless the beneficiary would in any case be exempt — to minimise the risk of bringing additional premiums into the succession base.

Article 990 I in Detail: The Flat-Rate Levy

Scope and rates

Art. 990 I applies to capital paid at death on: contracts in case of death (assurance décès); mixed contracts (assurance en cas de vie mixte); and capital-deferred contracts with counter-assurance — i.e. virtually all assurance-vie placement. The levy only applies where the contract is discharged by death and to gratuitous beneficiaries (not where the designation is in consideration of a debt or guarantee).

Social charges (prélèvements sociaux at 17.2%) on unrealised gains within the contract are deducted from the levy base before the €152,500 abatement. The levy and social charges do not share the same base and cannot simply be added.

The €152,500 per-beneficiary abatement

The €152,500 abatement is personal to each beneficiary, not shared. It applies once across all contracts with the same insured paid to the same beneficiary. Where a beneficiary receives capital from multiple contracts with the same insured, the abatement is applied once to the total, and the beneficiary chooses which contract bears the abatement first (producing a sworn declaration attestation sur l'honneur).

This per-beneficiary structure makes multiple-beneficiary designation highly effective for estate planning: each additional beneficiary brings an additional €152,500 of tax-free transmission.

Vie-génération: the 20% additional abatement

For contrats vie-génération (which must invest at least 33% in qualifying social economy, social housing, venture capital or intermediate-company assets), an additional 20% abatement on the gross taxable capital applies before the €152,500 general abatement, and cumulates with it. On a death benefit of €1,000,000, the net levy under a vie-génération contract is €129,500 (effective rate 12.95%) versus €186,094 under a standard contract (effective rate 18.61%) — a saving of €56,594 per beneficiary.

Exemptions under Art. 990 I

The following beneficiaries are exempt from the Art. 990 I levy:

• The surviving spouse (TEPA Act 2007).
• The surviving PACS partner (TEPA Act 2007).
• Qualifying siblings meeting the conditions for succession duty exemption (living together with the deceased, single/widowed/divorced, over 50 or infirm).
• Bodies exempt from succession duty under CGI Art. 795 (qualifying foundations, public-interest associations, etc.).

Contracts excluded from the levy

• Group professional non-redeemable annuity contracts (CGI Art. 885 J).
• Group employee death benefit contracts (CGI Art. 998, 1°).
• Madelin contracts (CGI Art. 154 bis).
• Rente-survie contracts for disabled children.
• Homme-clé business protection policies where proceeds are paid to and taxable in the company.
• Contracts that are à titre onéreux (e.g. mortgage protection insurance where the bank is beneficiary for the outstanding loan balance).

Articulation of the Two Regimes

A single contract may be subject to both Art. 757 B (for the post-70 premium portion) and Art. 990 I (for the pre-70 premium portion after 13 October 1998). The two do not overlap: Art. 990 I explicitly does not apply to sums already within Art. 757 B's scope. Where both apply, the capital must be allocated between regimes proportionally. The products generated by post-70 premiums are excluded from the Art. 757 B base and are neither caught by Art. 990 I.

Optimal Planning: Blending Insurance and Estate

The Art. 990 I levy (20% then 31.25%) and the succession duty tariff (5% to 45%) cross at different wealth levels. The optimal split depends on the amount to be transmitted per beneficiary and whether succession abatements are already used. The key planning principles are:

• Saturate both abatements first: €100,000 parent-child succession abatement + €152,500 Art. 990 I abatement = €252,500 per child transmissible at zero tax.
• For amounts between €252,500 and ~€388,500 per child: transmit via the succession (5%, 10%, 15% tranches are cheaper than the 20% Art. 990 I levy).
• For amounts between ~€388,500 and €852,500 per child: Art. 990 I at 20% is generally equal or better than the 20%–30% succession duty tranches. Life insurance wins as the amount increases.
• Above €852,500 per child: Art. 990 I at 31.25% is systematically more favourable than the 40% and 45% succession duty tranches.
• Multiple beneficiaries: each additional life insurance beneficiary generates an additional €152,500 abatement, while succession abatements are fixed per heir. Multiplying beneficiaries via life insurance is the most efficient way to scale tax-free transmission.

Summary Table: Which Regime Applies?

This article reflects French tax law as of March 2026. Tax thresholds and rates are indexed annually. Readers should verify current figures with the French tax authority (impots.gouv.fr) and consult a qualified adviser before making life insurance or succession planning decisions.