Luxembourg life insurance and expatriation

Why take out Luxembourg life insurance?

Luxembourg life insurance for expatriates

When you're an expatriate, taking out Luxembourg life insurance is an excellent financial investment. There are a number of reasons for this. 

First and foremost, Luxembourg life insurance offers a diversified range of financial investments with attractive returns .

Luxembourg life insurance also offers a high level of financial security. In return for the payment of premiums, you benefit from a capitalization vehicle that can be used in the event of the subscriber's life or death.

What's more, this contract operates within a particularly advantageous civil and tax framework. It offers tax neutrality and security with regard to the assets deposited.

Luxembourg life insurance is particularly advantageous for expatriates and internationally mobile clients. 

What is Luxembourg life insurance?

Classic life insurance, but not only...

At first glance, Luxembourg life insurance looks like a classic life insurance contract, with great investment flexibility. But under Luxembourg law, the policyholder benefits from the "Triangle de Sécurité" and a "Superprivilège".

The subscriber undertakes to pay regular premiums (or a single premium on opening). Premiums will be invested in financial, money-market, mandatory or equity vehicles, depending on the chosen risk profile and expected return.

The contract is taken out for a fixed term, determined on the subscription date. However, the subscriber may withdraw the funds at any time. At present, there is no penalty for early withdrawal. The subscriber recovers funds valued at time t.

Please note that subscription and management fees are applied to the amounts invested.

Life insurance contract maturity

In the event of the policyholder's death, life insurance pays out a lump sum or annuity at maturity.

For example, in the event of retirement, the policyholder can opt to receive regular income. It should be noted, however, that in the case of payment in the form of an annuity, there is no guarantee that the capital will be passed on to the beneficiaries.

In the event of the policyholder's death, the beneficiaries named in the contract receive the capital sum, excluding inheritance tax.

Safety triangle for life insurance policies

The "Triangle de sécurité" system is designed to protect the policyholder. Luxembourg life insurance policies are not part of the balance sheet of the insurance company from which they are purchased.

Life insurance contracts are registered with an independent custodian, approved by the Commissariat aux Assurances. This CAA exercises a supervisory role that ensures the balance between technical provisions and representative assets.
More concretely, the funds saved in a Luxembourg life insurance policy are kept separate from those of the insurance company's shareholders and creditors. Customers' assets are thus protected.

Super-Privilege for life insurance policyholders

What's more, in the event of the insurance company's bankruptcy, the policyholder of the Luxembourg life insurance contract has a "Super-Privilege". He or she is a first-ranking creditor on the regulated estate through the CAA. And this super-privilege applies before other creditors, including public creditors! Savers are therefore certain of recovering their financial assets.

What's more, unlike in other countries such as France, the warranty is unlimited.

Tax-neutral life insurance in Luxembourg

One of the key features of the Luxembourg life insurance contract is its tax-neutrality. It adapts to the policyholder's country of residence and/or nationality.

That's why life insurance offers several major advantages for expatriates and geographically mobile people. Even more so when they regularly change country of residence as a result of professional transfers.

Because life insurance is tax-neutral, Luxembourg does not tax premiums or capital gains realized on surrender or expiry of the policy.

Depending on your country of residence, your life insurance policy may provide you with a higher net return, once tax has been deducted.

In addition, premiums paid into a life insurance policy can be deducted from your taxable income. For more information, click here.

A secure investment

Luxembourg's economic stability

When it comes to investment security, Luxembourg is renowned for its economic and financial stability .In fact, this is praised every year by the rating agencies.

Choice of currencies and units of account

With Luxembourg life insurance, investors can choose to invest in a wide range of currencies and units of account. In this way, Luxembourg life insurance contracts protect against unfavorable currency exchange rates.

Consequently, the subscriber of a Luxembourg life insurance policy can choose to pay in the currency of his or her country of residence. This makes it easier to make payments or withdrawals in another currency. This is particularly interesting if the policyholder has changed country of residence in the meantime.

Confidentiality and unseizability of life insurance policies

Finally, Luxembourg law has made confidentiality a basic principle of all exchanges. Creditors cannot seize life insurance policies.

Life insurance, a potential guarantee for a property purchase

On the other hand, they can be pledged as collateral when taking out a bank loan. Ask your bank for details. Life insurance allows you to buy real estate more cheaply, avoiding the cost of mortgaging your property, for example.

Where can I take out life insurance? Which insurance companies are available in Luxembourg?

Gold partner

Banque Raiffeisen Luxembourg

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