Luxembourg life insurance offers several advantages for expatriates and an international mobile clientele: profitability, investment diversification, taxation and security.
Luxembourg life insurance is at first sight a completely classic life insurance contract. At maturity, it allows the payment of a capital or a pension, such as regular income when you retire. In the event of death, the beneficiaries designated by the subscriber receive a capital excluding inheritance tax.
Tax neutrality of Luxembourg life insurance
One of the major features of the Luxembourg life insurance contract is its tax neutrality. It is adapted to the subscriber’s country of residence. This is why it offers several major advantages for expatriates. This is all the more interesting when the subsriber change country of residence as a result of professional transfers. Luxembourg does not tax either premiums or capital gains realised at the end of the contract. Depending on your country of residence, your contract may thus provide you with a higher net return, once the tax is deducted.
A secure investment
Regarding the security of its investment, Luxembourg is renowned for its economic and financial stability, which is acknowledged each year by the rating agencies. In addition, the investor may choose to invest in many currencies and units of account. Luxembourg life contracts thus protect against unfavourable exchange rates between currencies. The subscriber can choose to contribute his savings in the currency of his country of residence. This makes it easier to make payments or to withdraw savings in another currency. This is all the more interesting if the country of residence has changed in the meantime.
Moreover, under Luxembourg law, the subscriber of a life insurance policy benefits from the “Triangle de Sécurité” and a “Superprivilege”. First of all, the insurance policy is not part of the balance sheet of the insurance company with which it is subscribed, but is registered with an independent depositary approved by the “Commissariat aux Assurances“. The funds saved are separate from those of the insurance company’s shareholders and creditors. This protects clients’ assets. In addition, in the event of the bankruptcy of the Insurance Company, the subscriber of a Luxembourg life insurance policy is a first ranking creditor. And this, in front of other creditors, including public creditors! The saver is therefore certain to recover his assets, especially since, unlike in other countries, such as France for example, the guarantee is unlimited.
Finally, Luxembourg law has enshrined confidentiality as a basic principle of trade. In addition, creditors cannot seize life insurance contracts. On the other hand, they can be pledged as security in the subscription of a loan to finance a real estate acquisition for example.