What is the difference between assurance vie and assurance décès in France?

Assurance vie and assurance décès sound as if they may be the same thing, but they serve very different purposes.

An assurance vie is mainly a savings and investment product. You pay in money over time and can usually withdraw it whenever you wish.

The capital belongs to you and may later pass to named beneficiaries. These contracts are widely used for long-term savings and inheritance planning, with favourable tax treatment in many cases. 

Funds can be invested in secure euro funds or riskier market-linked investments (unités de compte).

An assurance décès, in contrast, is a policy designed to protect your family financially if you die. 

You pay premiums in exchange for a guaranteed capital sum or pension paid to beneficiaries on death (which, under certain conditions, may fall outside your estate for inheritance tax).

Unlike assurance vie, the policyholder cannot receive the capital and there is usually no payout if the contract ends during your lifetime.

The key distinction is therefore:

• Assurance vie: a flexible savings and investment product, with withdrawals possible during your lifetime

• Assurance décès: a risk insurance policy intended solely to protect beneficiaries in the event of death.

Both allow you to name beneficiaries and can play a role in estate planning, but they are designed for different financial goals.