How long does it take to sell SCPI shares held in a life insurance policy?
Do you hold SCPI shares in your life insurance policy and have questions about the terms for selling them? The life insurance framework makes reselling these shares considerably easier than if you held them directly. However, the process isn’t quite as straightforward as it is for a euro-denominated fund. Furthermore, given the state of the SCPI market since 2023, it’s important to take a few precautions.
SCPI in Life Insurance: An Exit Mechanism Different from Direct Ownership
Liquidity is provided by the insurer, not the management company
This is the fundamental difference between holding SCPI shares directly and holding them within a life insurance policy. When investing in an SCPI through a life insurance policy, the insurer owns the shares and bears the liquidity risk. The investor is not a partner in the SCPI, but simply the holder of a life insurance policy whose unit-linked components are invested in SCPI shares.
As a direct result, the policy’s liquidity is guaranteed by the insurer, which means that it allows policyholders to make withdrawals at any time. This rule applies to both euro-denominated funds and SCPIs. Policyholders therefore do not have to wait for the management company to find a buyer, unlike what happens with direct ownership.
The two-month statutory deadline
The investor may request that the insurer partially or fully surrender the policy, in which case the insurance company has a statutory period of two months from the date of the written request to pay the amount claimed (Article L132-21 of the Insurance Code) (source).
In practice, most insurers process requests well before this maximum time limit. In the case of life insurance, the liquidity of the policy units is guaranteed by the policy administrator. Even when demand is low, the administrator is required to redeem the policy units.
An important limitation: the suspension of liquidity
The insurer is free to block withdrawal requests for a specified period by adding a rider to the policy. In fact, the insurer may temporarily suspend the liquidity of SCPIs held in life insurance policies, precisely because this liquidity is not guaranteed by the management companies. This is particularly the case during periods of stress in the real estate market.
This point warrants attention in the current context. As of December 31, 2025, the total value of shares awaiting redemption in the SCPI market stood at 2.8 billion euros, representing 3.14% of the market capitalization. Some insurers exposed to SCPIs facing pressure are therefore adjusting their exit terms.
Withdrawal Value: How Much Does It Cost to Withdraw an SCPI from a Life Insurance Policy?
Calculating the Withdrawal Value
The surrender value is the price at which the insurer values the SCPI shares upon surrender. In some policies, the insurer applies a discount to the net asset value of the shares upon surrender, which can range from 2 to 10 percent.
This value is distinct from the subscription price ( the price at which the shares were originally purchased). It changes over time based on two factors:
- the market value of the real estate holdings of the SCPI, re-appraised annually by independent experts;
- the general terms and conditions of the life insurance policy, which may specify their own valuation method.
Fees Charged Upon Departure
When the shares are sold, the SCPI subscription fees (which were not deducted at the time the shares were purchased) are deducted directly from the sale proceeds. This is advantageous for the investor, as the entire amount invested remains at work for the entire duration of the investment. Depending on the SCPI, the subscription fee ranges from 8% to 12%.
However, these fees must be taken into account, since most other investments charge them up front. For a €10,000 investment with a 10% fee, the net amount received will be €9,000 if the share price has not changed. This is why it’s important to have a sufficiently long investment horizon so that the returns earned can offset these fees.
What are the specific steps for selling SCPI shares through a life insurance policy?
Redemption Request or Arbitrage: Two Distinct Transactions
An investor who wishes to sell his or her shares must request a settlement or redemption under his or her life insurance policy.
- Arbitrage involves changing the allocation of one’s savings—that is, investing them in other investment vehicles. If the goal is to redirect savings to another investment option within the policy (euro-denominated funds, other unit-of-account investments), this is the preferred approach, as it does not result in a withdrawal from the policy and the tax treatment of life insurance continues to apply without immediate taxation.
- A surrender may be partial or total and allows you to recover the funds invested in the policy, with the tax consequences associated with terminating the policy.
The Step-by-Step Process
The process is generally simple:
- Identify the shares you wish to sell by checking the value of your SCPI units in your customer portal or by contacting your advisor.
- Submit your request in writing. If the contract allows for online management, you can place an order through your personal account; otherwise, a letter or a signed redemption form is required.
- Wait for the insurer to process your claim; they have two months to do so (though most act more quickly).
- Receive the funds, net of fees and applicable taxes.
Tax Treatment Based on the Length of the Contract
Taxes apply only to gains
Any capital gains resulting from the sale of shares are taxed under the life insurance tax regime. Tax is due only if the investor redeems the shares. As long as the funds remain in the policy (arbitrage), no tax is due.
In the event of a surrender, the applicable tax treatment depends on the length of time the policy has been in force:
- If held for less than 8 years, gains are subject to a flat tax of 30% (12.8% income tax and 17.2% social security contributions);
- After 8 years, an annual tax deduction applies (€4,600 for a single person, €9,200 for a married couple filing jointly); then, on the remaining amount, the tax rate is reduced to 24.7% (7.5% income tax + 17.2% social security contributions) for premiums paid up to €150,000.
The recommended holding period before selling
You can sell your SCPI shares at any time. However, this is a long-term investment, and it is recommended that you hold onto your shares for an extended period (eight to ten years) to realize a significant capital gain and benefit from the dividends paid out regularly.
This recommendation stems from the fee structure. With subscription fees ranging from 8 to 12 percent deducted upon redemption, it takes several years of distributed returns to offset them. Over a short time horizon (two to three years), the net return may be negative even if the SCPI has performed well. Over an eight- to ten-year horizon, distributed income and any appreciation in the portfolio’s value are more likely to generate a real gain.