Life insurance taxation after 8 years: allowance and rates 2026

Life insurance taxation after 8 years is one of the great strengths of this investment, but it often remains poorly understood. Past that milestone, the taxation of gains becomes noticeably lighter thanks to an annual allowance and a reduced rate. Here is what actually changes from the eighth year of holding.

One principle: tax only hits the withdrawal

As long as your savings stay in the policy, gains are not taxed: you can let your life insurance grow without taxation. Tax applies only at the time of a withdrawal (partial or total), and only on the share of gains contained in that withdrawal. The capital you paid in is never taxed.

The 8-year date is counted from the opening of the policy, not from each payment. It is therefore the age of the policy that triggers the favourable regime.

The annual allowance of 4,600 euros (or 9,200 euros)

This is the most concrete advantage. After 8 years, you benefit from an annual allowance on the gains withdrawn:

• 4,600 euros for a single person;
• 9,200 euros for a married couple or civil partners taxed jointly.

This allowance is overall: it is assessed across all your policies, not policy by policy. In practice, by splitting your withdrawals over several years, you can withdraw substantial gains while limiting, or even cancelling, income tax.

The tax rate after 8 years

Beyond the allowance, the remaining share of gains is taxed. For payments made from 27 September 2017 onwards, the regime depends on the total amount of your premiums:

• 7.5% on gains corresponding to premiums paid up to 150,000 euros;
• 12.8% above that 150,000-euro premium threshold.

You can also, at the time of your tax return, opt for the progressive income tax scale if it is more favourable to you. This option is overall and covers all your investment income for the year.

Social levies: 17.2% in every case

Do not forget them: social levies of 17.2% apply to gains, including those covered by the allowance. They are deducted on an ongoing basis on the euro fund and at the time of withdrawal for unit-linked supports. The 8-year allowance therefore reduces income tax, but not the social levies.

What to keep in mind before a withdrawal

After 8 years, the most common strategy is to spread your withdrawals year after year to stay under the allowance ceiling. Choosing the right policy, with reduced fees and high-performing supports, remains decisive for the net return: that is the purpose of our comparison of the best life insurance.

These tax rules can change and include special cases (older policies, payments before 2017, inheritance transfer). For a precise situation, refer to the official website impots.gouv.fr or consult an adviser. Past performance is not a reliable indicator of future performance.