Question to an expert
What is the solution when you want to be able to dip into your savings for your old age, but ensure its transmission?
Life insurance is presented as the means of transmitting one’s financial heritage under tax-attractive conditions. However, when the objective is to ensure the transfer of their assets under the best conditions, very few savers see the capitalization bond as a suitable instrument. However, it is a combination of these two formulas that will improve the tax environment.
Generally, the elderly who wants to pass on their wealth needs to dig into their savings to ensure their standard of living. However, there is a penalizing rule in life insurance in the event that you make purchases after 70 years.
At the time of a redemption, you take back part of the capital that you have invested, but only the fraction of interest that is materialized is subject to income tax. However, when the estate is settled, the rule is different. The administration reasons as if these redemptions were composed only of interest, leaving the amount of premiums originally paid intact even though they constitute the basis for inheritance tax.
The solution to avoid this pitfall is then to divide your savings between life insurance and capitalization bond. The first is intended to capitalize, and interest is not taxed on death. The second will be punctuated by redemptions so as to consume it and reduce to nothing the inheritance tax on this asset.