In principle, you can use life insurance to benefit one or more people in your life by designating them as beneficiaries. The amounts placed on a life insurance policy are not considered part of your estate and are not taken into account when calculating the legal reserve (the minimum share of your inheritance to which they are entitled), as life insurance is transmitted “outside the estate.” However, there is a limit set by law: if the premiums paid by the policyholder are deemed to be excessively high given their financial situation, they can be included in the estate and may be subject to legal action for infringing on the legal reserve.
The excessiveness of the premiums is assessed at the time the money is paid based on several criteria: the age, financial and family situations of the policyholder, as well as the usefulness of the policy for them. This serves as a safeguard to prevent the insured individual from disinheriting their children. Proving the excessive nature of the premiums can be difficult for heirs initiating legal action. They must not only be aware of the existence of the policy but also reconstruct the deceased person’s assets at the times when the payments were made.
Even when the excessiveness seems plausible and evidence can be provided, it is still necessary to convince the judges of the case, as their assessment is sovereign. Quantitative criteria such as income or assets may be more convincing, but qualitative criteria such as family situation or the utility of the policy are also considered. This means that two courts could render different decisions in similar cases. Furthermore, the judges must take into account all criteria established by case law to assess the excessiveness of the premiums.
In a recent case, the Supreme Court criticized the appellate judges for not considering the deceased insured’s overall financial situation, including their real estate, savings, and income at the time of each payment, when evaluating the excessiveness of the premiums. Thus, it is essential for heirs seeking to challenge life insurance premiums to gather as much evidence as possible and present a strong case to persuade the judges of the excessive nature of the amounts paid. The assessment of the excessiveness of premiums in life insurance policies remains a complex legal matter that requires careful consideration of various factors and thorough legal argumentation.
