For many expatriates in France, an Assurance Vie is one of the most flexible and tax efficient investment solutions available. It offers access to global investment options, advantageous inheritance treatment, and long term tax benefits. Yet despite its popularity, many people fall into avoidable traps when setting up or managing their contract. Understanding what can go wrong is just as important as choosing the right provider, fund selection, and withdrawal strategy.

Below we explore the most common mistakes people make with an Assurance Vie contract. By recognising these early, you can protect your savings, improve returns, and avoid unexpected tax surprises.

1. Choosing the Wrong Investment Profile

One of the main advantages of Assurance Vie is the wide choice of investment options. However, many investors choose a profile that does not match their risk appetite or time horizon. This can lead to disappointment, unnecessary volatility, or even capital loss.

How this mistake happens

• Selecting funds with high risk without understanding the market
• Staying entirely in the euro fund, which limits long term growth
• Relying solely on promotional material instead of advice

How to avoid it

A proper suitability assessment and a clear understanding of your objectives ensures your investment profile fits both your risk tolerance and your financial goals.

2. Ignoring the Tax Implications of Withdrawals

Assurance Vie provides significant tax advantages, especially after eight years. Yet one of the most common errors is withdrawing money too early or without understanding how taxation is calculated.

Why it matters

Withdrawals are taxed not on the whole amount but only on the gain proportion. The chosen tax regime, combined with your personal situation, can significantly influence the final result.

How to avoid it

Always evaluate the timing of withdrawals and understand whether you will select the flat tax or the income tax scale. Professional advice ensures you benefit fully from the tax allowances available.

3. Poor Beneficiary Clause Planning

The beneficiary clause is one of the most powerful and flexible elements of an Assurance Vie. Yet many people leave it blank, too vague, or outdated.

Typical problems

• Naming only one beneficiary without alternatives
• Forgetting to update the clause after marriage, divorce, or children
• Using unclear wording that creates disputes

Best practice

Review the beneficiary clause regularly and ensure it accurately reflects your family situation and estate planning strategy.

4. Misunderstanding Contract Fees

Assurance Vie contracts can include management fees, fund charges, and custody fees. The total cost varies widely, especially between retail and international providers.

Where people get caught out

• Not checking underlying fund charges
• Choosing a contract with high entry or exit fees
• Believing that all euro funds or unit linked portfolios have the same cost structure

How to avoid it

Transparent fee structures allow you to compare providers properly. Independent advisers can help ensure you are not overpaying for administration or investment management.

5. Assuming All Providers Offer the Same Level of Protection

Not all insurers operate the same way. Some offer stronger financial stability, better fund ranges, or more flexible features.

Risks include

• Lack of portability if you move country
• Limited investment universes
• Lower guarantees or weaker solvency ratios

How to avoid it

Choose well regulated insurers with strong track records, international capability, and the financial strength to protect long term savings.

6. Not Understanding How the Euro Fund Works

The euro fund is often seen as safe, but its returns vary and there are rules that many investors overlook.

Common misconceptions

• Believing the euro fund cannot fluctuate
• Thinking it is always the best option during market uncertainty
• Assuming it will match inflation over the long term

How to avoid it

Use the euro fund as part of a balanced strategy rather than the sole investment.

7. Setting Up Multiple Assurance Vie Contracts Without Strategy

Having several Assurance Vie contracts can be beneficial, but only when there is a clear purpose.

Problems arise when

• Investors duplicate fees unnecessarily
• There is no cohesion between investment strategies
• Administration becomes complex for heirs

Better approach

Multiple contracts should be used intentionally: for succession planning, risk separation, or different investment horizons.

FAQs – Top Mistakes to Avoid in an Assurance Vie Contract

Is Assurance Vie a safe investment option?

Assurance Vie is generally considered safe when held with reputable insurers. The euro fund offers capital protection, while unit linked investments carry market risk.

How does an Assurance Vie work in France?

It is a long term savings contract that allows investment into a euro fund and a variety of market based funds. It offers tax advantages for withdrawals and inheritance.

What are the risks of an Assurance Vie?

Main risks include market fluctuations in unit linked funds, misunderstanding tax rules, and choosing unsuitable investment options.

Can I withdraw money early?

Yes, you can withdraw funds at any time. However, early withdrawals may be less tax efficient.

Who is Assurance Vie suitable for?

It is particularly suitable for expatriates, long term investors, and anyone wishing to optimise inheritance planning in France.

Speak to Harrison Brook

Choosing and managing an Assurance Vie contract requires expertise. Our advisers support expatriates in France with transparent, regulated guidance tailored to cross border needs. Whether you are opening a new contract or reviewing an existing one, independent advice ensures your portfolio remains aligned with your goals.

Contact Harrison Brook today to review your Assurance Vie strategy and avoid costly mistakes.