Often, people with disabilities cannot benefit from a normal source of income as able-bodied employees. To overcome this shortfall in their portfolio, it is necessary to adopt a certain savings strategy.
In this sense, a product such as special disability life insurance allows them to make significant tax savings while building reserve capital for the future. Here is all the useful information about it.
How does this contract work?
Disability savings life insurance is an investment vehicle that must be taken out directly by the disabled person himself. As opposed to a survivor’s pension contract it is not possible to join via parents.
It will then be necessary to see with a specialized organization and gather all the necessary documents and supporting documents. Beneficiaries must have a degree of disability greater than or equal to 80%. A minimum holding period has been set. It is for 6 years and the contract can be financed by regular or one-off payments, limited to €1,525 per year (€300 increase per child).
What are the benefits for the recipients?
The terms of disability savings life insurance do not differ too much from the terms of a conventional contract. In fact, in terms of benefits, they are almost the same with a few more benefits. The most significant difference is therefore the possibility to deduct contributions from the taxable income.
Obviously, there are some rules to follow in this sense. The reimbursement is 25% of the amounts paid. For a disabled person who is alone, a tax reduction of €381 (€1,525 x 25%) per year must therefore be expected. A further €75 can be reduced for each child.
Furthermore, it is possible to combine this product withbenefit for disabled adults (AAH) and the compensation allowance for a third party (ACTP). Nevertheless, it should be known that withdrawal can only take place in an annuity.
What about investment cars?
The accumulated funds in the disability savings life insurance contract are invested in the same way as the capital in a normal contract. Beneficiaries thus have the choice between a fund in euros (lower risk) or the combination with several units of account (shares, SCPI shares, etc.).
In the first option (mono-support contract), social security contributions are not invoiced every year, but only at the time of redemption.