Portability Is Redefining Life Insurance: An In-Depth Look

Since the passage of the Pacte Act, the rules governing the portability of life insurance policies have been relaxed. In practice, however, this change remains limited. Policy transfers, tax implications, and requirements to meet: here’s what you need to know before optimizing your existing policy.
 

Regulated and Partial Transferability
Long limited to the transfer of single-fund policies to multi-fund policies, life insurance portability has evolved with the 2019 Pacte Act. It is now possible to transfer an older life insurance policy to a newer one, even if the new policy is not strictly a euro-denominated fund. This transaction has no tax implications, provided that the insurer remains the same. However, insurance companies are not required to accept the request.
 

If your request is denied, you can still take out a new policy, but this will result in the loss of the tax benefits associated with the length of the original policy. As a reminder, a policy that has been in effect for more than eight years entitles you to an annual tax deduction on withdrawals: 4,600 euros for a single person and 9,200 euros for a couple. Maintaining these benefits is therefore a key factor in deciding whether or not to transfer the policy.
 

Some companies are taking the initiative and offering to transfer policies to a more modern plan on their own. Since 2023, insurers under the umbrella of France Assureurs have committed to facilitating this process by offering an automatic transfer when the new policy is deemed appropriate for the policyholder’s profile. However, this practice is contingent on both policies being marketed simultaneously by the same distributor.
 

Why Consider a Transfer?
Internal portability allows you to retain the tax benefits of the original policy while benefiting from a more effective or flexible management framework. By switching to a newer policy, the policyholder can gain access to a wider range of investment options, more modern management approaches, or additional guarantees.
 

This transfer also provides an opportunity to entrust the policy to a new manager, provided that the manager is a partner of the insurance company. Some insurers also offer policies that are better suited to contemporary wealth management goals, particularly with regard to estate planning or managed accounts.
 

In 2023, 303,000 internal transfers were carried out in France, totaling 12.3 billion euros. While this figure is still modest compared to the more than 50 million active life insurance policies, it reflects a growing trend toward modernizing savings without losing tax benefits.
Before initiating a transfer, you should review your annual statement, which should outline the terms and conditions for portability. And above all, check whether any fees apply to the transaction. While portability can help boost your savings, it should not reduce your net return due to hidden costs.