Valley International / investing
French assurance-vie explained for foreign residents
French assurance-vie is an investment account governed by insurance law. It is not the same thing as a life insurance policy in English-speaking countries, despite the name. We look at how it is taxed and at who inherits it, because the two work differently.
The assurance-vie used for savings holds investments within an insurance contract. You pay money to the insurer and choose from the investments available under the policy. These may include a euro fund with a contractual guarantee and unit-linked funds whose value can fall. A withdrawal, known as a rachat, returns part of your capital and any associated gain; article 125-0 A of the French tax code governs the income-tax treatment of that gain.
What changes after eight years
Once the contract has been open for eight years, qualifying withdrawals benefit from an annual income-tax allowance on their gain portion: €4,600 for a single person, €9,200 for a couple taxed jointly. The allowance applies across your qualifying policies, rather than separately to each one. Social levies need separate treatment. The opening date therefore matters, but it is one consideration alongside fees and investment choices.
Who receives the money after your death
The beneficiary clause identifies who should receive the death benefit. Its French tax treatment depends on several dates, including the policy’s subscription date and the dates and ages at which premiums were paid. Articles 990 I and 757 B govern different situations. Establish which payments fall under each rule before estimating what the beneficiaries would receive.
For an international family, the beneficiary clause should be considered alongside the will and the law governing the succession. French forced-heirship rules for foreign residents explains those questions. A policy and a will serve different purposes, and neither should be drafted on the assumption that the other settles every inheritance issue.
Access to your savings and investment risk
An investment-based assurance-vie is different from pure life cover or a retirement plan. Eight years is a tax milestone, not a general lock-in period. Withdrawal conditions still matter: an accepted beneficiary clause, a pledge — the contract given as security for a loan — or restrictions affecting an underlying asset can limit access. Check the insurer’s guarantees and processing conditions rather than treating the contract like a current account. Keeping your French assurance-vie after leaving France covers a later change of residence.
What a US person has to check before signing
The underlying funds inside a French assurance-vie are generally European collective investment vehicles, and for US tax purposes those are typically passive foreign investment companies. Whether the US treats the contract as insurance, and therefore looks through to the funds or does not, depends on how the contract is built and is not settled by the fact that French law calls it insurance.
A US person should obtain advice from a US professional before signing the contract. The page Investing in France as a US citizen or green-card holder explains why the constraint comes first.
References cited
Frequently asked questions
Is assurance-vie the same as life insurance in my country?
The French term covers insurance contracts with different features. For savings, assurance-vie usually means an investment-based policy with a beneficiary clause. It should not be confused with pure life cover, which insures a death benefit. Read the proposed contract’s investment and death-benefit provisions rather than relying on the translated name.
Is my money locked in for eight years?
No general eight-year lock-in applies to a savings assurance-vie. Eight years changes the French income-tax treatment of withdrawals. Access can nevertheless be affected by the policy, a pledge, an accepted beneficiary clause or the investments held. Check those conditions and the cost of a withdrawal when deciding.
Should I open a contract now even with a small amount?
Opening a suitable policy starts its tax holding period, even if you initially pay in a modest amount. Later payments do not restart that period. Compare the minimum payment, ongoing fees and investments before opening one solely for its date.
How are my beneficiaries taxed?
Identify the beneficiaries, the policy’s date and the age of the insured person at each payment. Articles 990 I and 757 B apply to different situations, with their own territorial conditions and exemptions. A policy funded over several periods may require more than one calculation.
ÉTHIQUE ET PATRIMOINE, a French simplified joint-stock company (SAS), registered office at 41 rue Saint-Ferdinand, 75017 Paris, France, Paris Trade Register no. 803 414 796, VAT no. FR 40 803 414 796, registered with ORIAS under number no. 24001817 (www.orias.fr) — Financial investment adviser (CIF) no. 18002418, member of ANACOFI-CIF, a professional association approved by the Autorité des marchés financiers, and Anacofi-Courtage for its brokerage activity. Presence: Paris, Montpellier, London, Singapore, Hong Kong, Bangkok, Shanghai and Dubai.
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Book a callWritten by Stéphane Molère, President of Éthique et Patrimoine — page last reviewed on 2026-09-15 — reference date for the rules: 2026-09-07.