© Sébastien Duijndam pour Action contre la Faim
Headline
How to take out a life insurance policy to benefit Action contre la Faim?
DONATING A LIFE INSURANCE POLICY TO ACTION CONTRE LA FAIM IS A PARTICULARLY SIMPLE, EFFECTIVE WAY OF HELPING US TO SAVE LIVES.
A preferred method for many thanks to the tax benefits it entails, this form of donation is an advantageous way to bring your philanthropy plans to life with total peace of mind.
Want to find out more about donating a life insurance policy? How is it different from a legacy? What are the advantages of a life insurance policy? What about inheritance taxes? What are the benefits of donating a life insurance policy to an association? We are here to guide you in your choice of the best form of donation for you.
WHY TAKE OUT A LIFE INSURANCE POLICY TO HELP OUR ASSOCIATION?
Taking out a life insurance policy to help Action contre la Faim is an excellent way of taking care of those around you while fighting the causes of hunger with us. Deeply affected by the tragic fate of millions of children, women and men suffering from malnutrition, many have already made this simple, generous gesture. This was the case for Geneviève, who made this step in 2016:
‘I thought of Action contre la Faim because I’m very concerned by the future that awaits children, especially the youngest ones. Issues linked to hunger really torment me; I’m very sensitive to this subject. I have images of suffering in my head, and I can’t accept them, especially at a time when we have enough to feed everyone living on this planet. That is the main reason why I got involved with this association.’
Geneviève, Bayonne (64).
testimonial from a benefactor
Paule, donator since 2011
“Retired for some twenty years now, I sometimes wondered what would become of the furniture, the objects of my daily life and the life insurance I had taken out? Life had left me no family, and I had no heirs, but there was no question of my assets reverting to the state. So what could I do on my own? A friend of mine was donating to Action contre la Faim and introduced me to the organization. That’s what I wanted to do, fight hunger and above all the lack of water, because I think that’s even more terrible. Now my will is in favor of the Action contre la Faim association, to which I bequeath all my assets. In this way, I’m helping to build a better world and pass on a legacy of peace and hope.”
WHAT IS A LIFE INSURANCE POLICY?
In France, a life insurance policy is a saving mechanism through which you can build up capital by making one-off or regular payments. The parties involves are the financial intermediary, the bank or insurer, and the individual. One person can have several life insurance policies, meaning they can prepare different projects at the same time, whether they are for the short term or the long term. Depending on the type of policy, the built-up capital is paid out in the form of either an annuity or a lump sum to the beneficiary or beneficiaries named by the person who took out the policy.
WHAT ARE THE DIFFERENT TYPES OF LIFE INSURANCE POLICIES AND THEIR ADVANTAGES?
LIFE INSURANCE
This is a savings tool that can increase the capital you pay into it through gains generated until the policy term expires. There is no set legal duration for the policy, which means the holder can cancel it while they are still alive.
DEATH INSURANCE
‘Death insurance’ covers the risk associated with the insured party until their death. Upon their death, the amount of capital defined when the policy was taken out is paid to the named beneficiary or beneficiaries.
CONDITIONS FOR WITHDRAWING THE FUNDS
‘Death insurance’ will not pay out until the death of the holder. Meanwhile, in the case of ‘life insurance’, the funds can be accessed at all times, should the holder experience any cash flow problems. Withdrawing all of the funds paid in will end the policy. The applicable taxation fluctuates depending on when the withdrawal is made.
‘I am delighted to be able to help to improve the living conditions of the populations you encounter. The world is vast and its needs are many. I am behind you in your activities to assist those living in poverty.’ Thérèse, Nieppe (59)
WHAT ARE THE TAX IMPLICATIONS OF A LIFE INSURANCE POLICY?
During the policyholder’s lifetime, the gains generated may be subject either to the income tax scale or, if the taxpayer so chooses, to a fixed rate, which decreases the longer the policy is held. Furthermore, the tax on a withdrawal is reduced when the policy has been held for between four and eight years. Beyond eight years, an allowance is granted, which allows for withdrawals that are practically tax-exempt.
Upon the death of the policyholder, policies below €152,500 with premiums paid before the insured party’s 70th birthday are exempt from tax. Beyond that, a flat rate of 20% will apply up to €700,000, then 31.25% on the part above €852,500.
WHO CAN I DONATE A LIFE INSURANCE POLICY TO?
THE BENEFICIARY CLAUSE
The policyholder can name one or several beneficiaries – their heirs, for example – in the beneficiary clause. However, healthcare professionals and assistants who care for them at the end of their life cannot be named beneficiaries. This prohibition also applies to owners and staff of the care home where the policyholder was living before their death.
We advise you to pay close attention to the wording of the beneficiary clause, especially to make sure that there are no admin fees. Any ambiguity or absence of a named beneficiary may render the policy void, and the amounts invested will go back into the policyholder’s estate.
DONATING TO A RECOGNISED PUBLIC UTILITY ASSOCIATION
The policyholder may name a third party or even a legal person (an association or foundation, for example) as a beneficiary of all or part of a life insurance policy.
If the named association is a recognised public utility organisation, inheritance taxes, transfer taxes and flat rate life insurance taxes do not apply.
LIFE INSURANCE AND INHERITANCE
A life insurance policy allows assets to be transferred ‘outside of the estate’: as forced heirship* obligations do not apply, the capital paid by the insurer to the named beneficiary or beneficiaries is not taken into account when the estate is settled.
*Forced heirship rules mean that the children (or, in their absence, grandchildren) and the spouse of the policyholder have a right to inheritance and cannot be disinherited. It aims to protect these family members, who may request that the amounts paid for the life insurance be reinstated into the estate if they are deemed ‘excessive’.
HOW DO I SET UP AN ASSOCIATION AS A BENEFICIARY?
To name an association as the beneficiary of a life insurance policy, its name and the postal address of its headquarters must be included in the beneficiary clause. Even if you have already taken out your policy, you can modify the name(s) of the beneficiary or beneficiaries at any time. Simply contact your insurance provider to request the change.
Other advantages are available to you as a donor:
- You will benefit from tax relief – in the form of an exemption from inheritance taxes, transfer taxes and flat rate life insurance taxes – if you name our public utility association as a beneficiary.
- You will play an active, sustainable role in fighting world hunger, as 89% of our expenses go to our humanitarian activities.
- You will make sure all your choices will be respected, as we take great care in meeting your expectations and using the resources you give us according to your wishes.
Would you like to pass on resources to fight and eradicate hunger to future generations? Do you want to bring even more meaning to your life by asserting your values, such as sharing and solidarity? We are here to listen to you and assist you every step of the way as you build your life insurance project.
TO FIND OUT MORE OR ASK US A QUESTION, DON’T HESITATE TO GET IN TOUCH:
Manon BESSON
Head of Liberalities and Philanthropy
Rachel ROQUE
Head of Liberalities and Life Insurance
E-mail : servicelegs@actioncontrelafaim.org
Phone number : 01 70 84 84 84 (direct line)
Post : receive our free, confidential life insurance information brochure.
