Many French savers spend decades building capital through life insurance, retirement savings plans, and similar products. At retirement, instead of taking a lump-sum payout, policyholders often opt for a life annuity—a reliable stream of income paid regularly until death. This approach provides financial security, complementing pensions that typically fall short of pre-retirement earnings.
A life annuity delivers regular payments—typically monthly or quarterly—to the beneficiary until their passing. These payments stem from lifelong savings accumulated in vehicles like life insurance, retirement savings plans (PER), or stock savings plans (PEA), where premiums build capital over time.
At contract maturity, savers choose between a one-time capital payout or converting savings into a life annuity for ongoing income. This is especially popular among retirees seeking to bridge the gap between pensions and former salaries.
The annuity amount is calculated based on total savings, the policyholder's age, and life expectancy data from France's National Institute of Statistics and Economic Studies (INSEE). INSEE's mortality tables provide gender-specific life expectancies under current conditions, ensuring fair, data-driven valuations.
The primary benefit is predictable, regular income that bolsters retirement pensions, securing your lifestyle long-term—ideal if you outlive average expectancy.
Annuities are often revalued annually to counter inflation, with the exact amount locked in at contract signing for peace of mind.
Insurers offer choices like a guaranteed minimum revaluation (technical rate) for higher initial payments, though it may taper over time, or a standard annuity for steadier long-term value. Some contracts include reversibility, extending payments to designated beneficiaries after your passing.
With a simple life annuity, unused capital reverts to the insurer upon death. Reversible options protect heirs by continuing payments (fully or partially), per contract terms.
Taxation mirrors pensions: full annuities from retirement products face income tax (after 10% abatement) plus ~17% social charges. Life insurance or PER annuities tax only a portion—70% if under 50, 50% (50-59), 40% (60-69), or 30% (70+ at first payment).
Once selected, you can't switch to a lump sum, so assess liquidity needs carefully before committing.
