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Eight years, with a 150 000 € threshold on top
The explanation, in the order it is meant to be read · 25 sections · 845 words · 5 min
Mrs Aubert holds a twelve-year-old policy and believes she is under the reduced 7.5 % rate. She has paid in 180 000 € of premiums. The income attached to the 30 000 € above the 150 000 € threshold is still taxed at 12.8 %. Before you read on: on what exactly is that threshold assessed, and on what is it not?
What you will be able to do
- Place the eight-year threshold and what it changes about the rate.
- Remember the 150 000 € premium threshold and the rate it triggers.
- Tell apart the rate applying to premiums paid before 27 September 2017.
- Remember the social levy rate specific to life insurance.
- Identify the cases in which income is wholly exempt.
Two clocks, not one
Life insurance combines two criteria that cross each other, and it is that crossing which confuses people. The first is the age of the policy, with a threshold at eight years. The second is the total amount of premiums paid, with a threshold at 150 000 €.
Before eight years, income attached to premiums paid since 27 September 2017 bears a flat withholding of 12.8 %. Age plays no mitigating part at that stage: a seven-year-old policy is treated like a one-year-old one.
From eight years on, the rate falls to 7.5 % — but only for income attached to the fraction of premiums not exceeding 150 000 €. Above that threshold, the corresponding income stays taxed at 12.8 %.
An old policy therefore does not switch wholesale into the favourable regime. It splits: part of its income falls under 7.5 %, the rest under 12.8 %, in proportion to the premiums sitting on either side of the threshold.
Definition
The 150 000 € threshold — The total amount of premiums paid, net of repayments, above which the income of a policy older than eight years stops benefiting from the reduced rate. It is assessed across all policies held by the same taxpayer, not policy by policy.
Summary table
| Age of the policy | Premiums under 150 000 € | Premiums above 150 000 € |
|---|---|---|
| Less than 8 years | 12.8 % | 12.8 % |
| 8 years and over | 7.5 % | 12.8 % |
Key figures
- Reduced rate after eight years, under the premium threshold
- 7.5 %
- Flat rate before eight years, or above the threshold
- 12.8 %
- Premium threshold opening the reduced rate
- 150 000 €
- Social levies specific to life insurance
- 17.2 %
A social levy rate that did not follow
Life insurance income bears social levies at 17.2 %, and not at the 18.6 % applying since 1 January 2026 to other investment income. The increase did not reach this category.
The 1.4-point gap is small but real, and it shows up in any comparison between wrappers. Applying 18.6 % to a life insurance withdrawal overstates the charge, exactly as applying 17.2 % to a dividend understates it.
Social levies differ from income tax on a second and more important point: they strike the whole of the income, without the benefit of the annual allowance that lightens income tax.
Old premiums follow their own rules
The regime described above covers premiums paid since 27 September 2017. Earlier premiums keep a separate treatment, which the date of the withdrawal does not change: it is the date of PAYMENT that governs, not the date of exit.
For those older premiums an optional final withholding applies, whose rate depends on duration: 35 % under four years, 15 % between four and eight years, 7.5 % beyond. Taxation under the progressive scale remains available.
A policy opened before 2017 and funded since therefore carries two layers of premiums, each with its own rules. This is the main source of divergence between a mental calculation and the assessment that arrives afterwards.
The insurer's annual statement usually sets out the two layers separately. Reading it before deciding on a withdrawal costs a few minutes and avoids reasoning on an average rate that applies to nothing in particular.
Four situations that erase the tax
Certain events wholly exempt the income from tax, whatever the age of the policy: redundancy, early retirement, second or third category disability of the policyholder or their spouse, and judicial liquidation.
The exemption is bounded by a deadline: the withdrawal must take place before 31 December of the year following the event. After that date the ordinary regime resumes, with no way back.
Two limits are worth knowing. The exemption covers income tax only: social levies remain due. And it is not presumed — it has to be claimed, with supporting evidence.
Mistakes to avoid
- Believing a policy over eight years old is wholly taxed at 7.5 %, when the premium threshold splits the computation.
- Assessing the 150 000 € threshold policy by policy, when it covers all the taxpayer's policies.
- Applying 18.6 % of social levies, when life insurance keeps 17.2 %.
- Using the withdrawal date to classify premiums, when it is the payment date that governs.
- Expecting a gradual easing before eight years, when the rate only moves at the threshold.
- Treating the redundancy exemption as automatic, when it must be claimed and the withdrawal made in time.
Educational content, current with the sources cited. It does not replace advice tailored to your situation. These courses are neither certifying nor CPF-eligible: they prepare for no certification registered with the French RNCP or specific register.