« Epargne handicap » – Special disability Assurance Vie contract

Even though this contract has been created more than 30 years ago, it is still relatively unknown. But for anybody who has been confronted with disability, it is very important to discover its advantages.

1. Why: Because handicap has a cost and preparing the financial future of a disabled person is important , the government has created in 1987 a law (article 26-l de la loi 87-1061 du 30 décembre 1987) to help parents of handicap children or disabled people themselves to prepare their financial future by giving a tax advantage to encourage them and help them financially.
2. What is it? The contract “Epargne Handicap” is an Assurance Vie savings account contract which gives the beneficiary and the person who set it up tax advantages. This contract gives a tax reduction equal to 25% of the amount you put aside on this saving per year (limited to 1525 euro plus 300 euro per child under your care). So, a tax reduction of 381.25 euro per year minimum. The contract must be existing for at least 6 years (for the amount that gave a tax advantage at least). This contract can then be cashed in or transformed into an annuity or pension withdrawals. It entitles the disabled person to accumulate some capital either by putting in one lump sum or by putting in some Monthly, quarterly or yearly instalments/payments. Those payments can be made either by the disable person or by his or her close family members.
3. Who for: This contract is for people who have a handicap which prevent them from working as anybody else coul This handicap can either be physical or mental. This person can be minor or major but must be a French resident. If the person is working but has a lower wage due to his/her handicap, he or she is eligible. The contract must be under the handicap person ‘s name but payment can be made by family members.
4. How does it work: Like any other Assurance vie saving account and with also the other tax advantages linked to inheritance allowance (tax free allowance up of 152500 per beneficiaries) and income tax advantages after 8 years. The minimum amount to open is 5000 euro but once it is open you can make Monthly regular payment of 50 euro minimum or none at all. It can be invested on shares/bonds or fully secured or both.

Conclusion: Ok, I know it is not much as an advantage (381 euro per year) compare to the difficulty faced by being disabled or having a child in that situation but one must make the most of what we get in life and every contribution as little as they may be can help. Feel free to contact me for any further information.

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