The co-subscription of a life insurance policy has several advantages for married couples. We take stock of the issues, the advantages of the different types of co-subscriptions.
Joint underwriting in life insurance – iStock-Andrii Zastrozhnov
What is co-subscription?
Co-subscription in life insurance means joint subscription to a contract. Unlike individual subscription, the contract is therefore held by two people, who then become co-subscribers and co-insured. This joint membership is exclusively reserved for married couples. Linked to the matrimonial regime, the co-subscription life insurance contract cannot be maintained if the spouses divorce. A separation implies a total repurchase of the contract. The two ex-spouses are then free to take out a new life insurance contract, each on their own, but lose the tax advantages of their old contract.
The benefits of joint underwriting
One of the most obvious advantages of co-subscription is that it makes it possible to have a common management of the contract, the latter being fed by common funds. By investing and managing a joint sum, the spouses benefit from the tax advantages of life insurance and, depending on the type of co-subscription chosen, protect each other in the event of death. Each action carried out on the contract (payment, redemption, modification of the beneficiary clause, etc.) requires the signature of both co-subscribers. Management can however be simplified, allowing by agreement one of the two spouses to pilot alone the realization of certain current operations.
Two possible scenarios
There are currently two types of co-subscriptions. The first provides for a first-to-die outcome. This implies that the contract automatically ends on the death of one of the two co-insureds. The funds are then paid to the designated beneficiary. In this case, the surviving spouse, if he is not automatically designated beneficiary, loses the advantages of the investment. The second scenario involves a second-death outcome. The contract therefore continues with the surviving spouse on the death of the first and he becomes the sole holder. The contract also retains its tax anteriority. This second scenario makes it possible to protect the surviving spouse, who can in particular dispose of the accumulated capital while preserving the tax environment in force at the time of the joint subscription.
