Life insurance and clearly exaggerated premium: it is also necessary to take into account the family situation, the age and the usefulness of the operation

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Mrs. D leaves to succeed her two daughters. She had taken out a life insurance contract designating one of them as beneficiary. Considering the obviously exaggerated premiums paid on the life insurance, his other daughter subpoenas her sister.

Mrs. D, who died on November 25, 2010, was succeeded by her two daughters, Mrs. M and Mrs. Y. She had taken out a life insurance policy designating Mrs. Y and her two children as beneficiaries. Considering the premiums paid on the life insurance manifestly exaggerated in relation to the estate, Mrs. M assigns her sister.

Grossly exaggerated premiums: definition

The life insurance contract allows you to transmit up to 152,500 euros to the people of your choice, without inheritance tax. These sums do not form part of the estate, ie the heritage to be shared between the heirs, which is then reduced. When these sums represent too large a part of the deceased’s estate, the heirs may feel aggrieved and contest the contract.

According to the insurance code, the manifestly exaggerated nature of the premiums paid by the subscriber of a life insurance contract is assessed at the time of their payment, with regard to the age of the subscriber, his financial and family situation as well as than the usefulness of the contract for him.

The Court of Appeal dismisses Mrs M

The Court of Appeal dismissed Mrs. M’s claim, considering that the disputed premiums were not manifestly excessive. Indeed, their amount had been paid at the opening of the life insurance contract on March 11, 2006 by means of four checks for the total sum of 30,500 euros and the cash held by Mrs D when taking out this insurance contract. life insurance amounted to approximately 150,000 euros. Besides, she also owned her house and plots of land. According to the Court of Appeal, it does not therefore appear that the premiums paid on the insurance contract were manifestly exaggerated in relation to the subscriber’s income and assets on the date the contract was taken out.

Mrs. M then appeals in cassation.

The Court of Cassation overturns the judgment

The Court of Cassation noted that the judgment of the Court of Appeal did indeed take into account Mrs D’s financial situation at the time of the payment of the bonuses and noted that this point was not disputed by Mrs M. On the other hand, it did also found that the judgment had not taken into account the family situation, age and usefulness for Ms D of these operations.

The Court of Cassation therefore considered that without also investigating whether, with regard to the policyholder’s age, family situation and the usefulness of the policy for her, the premiums paid were manifestly excessive in view of his faculties, the Court of Appeal deprived his decision of a legal basis. For these reasons the Court of Cassation reverses the judgment of the Court of Appeal.

Source: judgment of the Court of Cassation, second civil chamber, of June 16, 2022

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