Life insurance for children: advice & selection

Estimated read time 5 min read

Life insurance is the preferred investment of the French. Indeed, this investment is a real Swiss army knife of savings that can meet many needs. In this case, you may have considered opening a contract in the name of your child or grandchild?

Unless the minor is emancipated (and over 16), only the minor’s legal representatives are authorized to open a contract in his name, usually the parents. So unless they are their legal guardians (following the death of parents for example), it is not possible for grandparents to open life insurance to their grandchildren.

Note that the opening of the contract requires the agreement and signature of ALL legal representatives. This can make the task complicated in the event of a dispute between the parents… Moreover, if the child is over 12 years old, he must also give his agreement by signing. 🙂

Finally, the beneficiary clause cannot be personalized for a life insurance contract opened in the name of a minor. It’s always the same: the child’s heirs (under the Civil Code ). The child can change it once they reach majority.

For contracts of more than 8 years, you benefit from a reduction of €4,600 (€9,200 for a couple) on your earnings which escape income tax in the event of redemption, but never social security contributions. If your earnings exceed this allowance, they will be taxed at 7.50% for contracts with an outstanding amount of less than €150,000 and 12.80% for higher outstanding amounts.

Note that you can choose to be taxed according to your marginal tax bracket ( TMI ) but this choice will then apply to all income from your savings.

If you thought you could send cash to your children without limit with life insurance, you have to take into account the notion of obviously exaggerated premiums. Indeed, you have to be careful that your payments remain reasonable in relation to your assets.

However, no online broker offers the possibility of taking out life insurance for minors 100% online. Indeed, the electronic signature is not possible for a minor. It will therefore be necessary to complete the file, print it, have it signed by the legal representatives and send it by post.

It is now impossible to take out a life insurance contract for your minor child 100 % online. It will necessarily go through a paper file so that all the legal representatives can sign, as well as the child over 12 years old.

How to choose the best life insurance policy for children?

We have already answered this question in our comparison of the best life insurance policies .

Beware of hidden costs : some banks promote free insurance but they only talk about entry fees! It is also necessary to check the recurring costs such as management fees and above all, the costs of the investment vehicles. To avoid them, favor ETFs .

Avoid traditional bank contracts : they are generally more expensive than the best online life insurance policies, offering less support. Moreover, one may have some doubts about the objectivity of the advice when you are only offered “in-house” funds…

If you prefer the second solution, the act of donation can be carried out under private signature and therefore potentially free. Nevertheless, we advise you all the same to be accompanied by an adviser to avoid the nullity of the assistant pact in the event of error. And don’t forget to declare your donation using the Cerfa 2735 .

You can set several rules for using the funds :

If the children are beneficiaries of a contract opened in your name, you can determine a re-employment clause. For example, the money can only be used to pay tuition fees or as a down payment for a property purchase.

Similarly, you can make a donation under conditions. For example, you give €30,000 to your grandchildren, on the condition that this sum be paid into a life insurance contract and blocked until the end of their studies. In this case, the donation must be notarized and meet certain conditions of articles 900 and following of the Civil Code. In particular articles 944 and 953.

They can then set the date on which the transmission will become effective, for example when the child turns 25. Thus, even if the insured dies before, the sums will continue to grow within the contract.

There is no specific contract for minor children. Thus, there are no payment ceilings on minor life insurance.

How do I cancel or terminate minor life insurance?

As for the subscription, the closing of a life insurance opened in the name of a minor requires the agreement and the signature of ALL the legal representatives (thus the parents). Similarly, the child over 12 must also agree and sign.

Just like adults, minors can hold as many life insurance contracts as they and/or their legal representatives wish.

How to choose life insurance for your grandchildren?

Choosing life insurance for your grandchildren is like choosing the best life insurance policy for an adult . See Best Life Insurance: 2023 Comparison!!

No, only the legal representatives (generally both parents) are authorized to open a life insurance contract for a minor. In addition, the child over the age of 12 will also have to give his consent and sign the subscription documents.

Antoine was a Wealth Advisor and Private Banker before joining Finance Héros. He puts his knowledge and experience of the banking sector at your service.

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