Surrender of the life insurance contract: is it still worth saving?

As an investment and tax optimization tool, life insurance plays an important role in financing the economy. That said, reversals of legislation could deter households from saving. A tax of up to 30% is provided for in the event of the redemption of life insurance.

A new tax on life insurance is at the heart of discussions, sparking heated debate. In short, if a member wishes to redeem his life insurance and terminate his contract, he will be subject to a 30% tax, calculated on the redemption value. A news that does not encourage citizens to save.

This is precisely what confides to Inspirations ECO, a well-informed source within a large local insurance company. “The news is not necessarily going to favor savings”, she underlines before relativizing, “that said, the situation is still being assessed”. And to add: “several scenarios are put forward and according to each one, a proposal will be transmitted to the supervisory ministry by the Moroccan Federation of insurance and reinsurance companies (Fmsar)”.

Same story for Fouad Douiri. The former chairman of the management board of RMA Watanya, and former energy minister, believes that “life insurance is not only a savings solution but also a financing of the productive economy”. And for good reason, “all savings are invested in the national economy”. He considers that “the State must encourage the citizen to save”. Hence his disagreement with the introduction of this tax. “Introducing a 30% tax can be brutal and difficult to assimilate.

The government should adopt a more flexible and adaptable solution, or even scrap this proposal altogether.” On the insurance side, the impact of the application of this measure will be significant. It is likely to result in a considerable drop in collection from customers. “Members, meanwhile, will eventually abandon the idea of ​​saving,” said the former minister.

Life insurance represents 46.1% of the Moroccan market

According to data published by the Moroccan Federation of Insurance and Reinsurance Companies (FMSAR), local insurers recorded a 9.8% increase in their turnover in 2021 to 49.809 billion dirhams (MMDH). The Life and capitalization branch accounted for 46.1% of market premiums, i.e. 22.942 billion dirhams in 2021.

The remaining 53.9%, ie an amount of 26.867 billion dirhams, is divided between the various Non-life branches, including Automotive. The latter recorded 12.988 billion dirhams of premiums issued in 2021, followed by personal accidents and accidents at work which show respective turnovers of 4.772 billion dirhams and 2.319 billion dirhams. Reinsurance acceptances increased by 0.7% to stand at 3.071 billion dirhams as of December 31, 2021.

Kenza Aziouzi / ECO Inspirations

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