Publish-editorial — Being at the head of a large capital is not always easy to manage. Indeed, even if the idea of rental real estate quickly comes to us, not everyone necessarily wants to embark on such an adventure. This is whyturning to life insurance is a more than conceivable and interesting solution. Indeed, the overall performance of this type of investment can be good with advantageous taxation. In this context, there is the possibility of taking out a life insurance policy in Luxembourg, which offers a greater number of advantages than in France. Why ? We explain this to you.
How does life insurance work?
First, let’s recall what life insurance is and how it works. Indeed, the latter is used less and less for its initial objective (that of releasing capital in the event of death for a third-party beneficiary), but rather for its profitability and/or to prepare its succession.
How life insurance works overall
Life insurance is an investment, rather long-term, which makes it possible to combine profitability and security. In principle, the subscriber places a capital, while having the possibility of making additional payments later in his contract (by monthly payments, quarters or other).
When subscribing, you complete a questionnaire regarding your risk profile. This questionnaire will allow you to define your profile and therefore the level of risk you are ready to take (the riskier a contract is, the higher its profitability can be over time).
What are the objectives for life insurance?
When opening life insurance, two objectives are traditionally required.
Firstly, the profitability of the contract: if we compare with the rates of various passbooks, it is more profitable to invest in life insurance over the long term because it allows access to more remunerative supports on long period than passbook accounts.
The other often-targeted objective is to be able to pass on capital to loved ones with advantageous taxation.
This is why, depending on your needs, you can open life insurance with a different objective from one contract to another.
Why choose Luxembourg for its life insurance?
You may not know it, but it is quite possible (and legal) to open a life insurance policy in Luxembourg. The only condition being to declare to the tax authorities the opening of this contract in your income tax declaration. Therefore, studying the fact of opening a life insurance in Luxembourg, as on the assurancevieluxembourg.eu site, allows you to benefit from more advantages than in France.
How life insurance works in Luxembourg
The operation in Luxembourg is more or less the same as in France : Luxembourg life insurance is a contract by which the insurer undertakes to pay an annuity or capital to the insured or to his beneficiaries in return for the payment of a premium (i.e. a sum of money). Moreover, speaking of the beneficiaries, know that the choice is completely free, there is no obligation for there to be a relationship between the beneficiaries of the contract and the subscriber.
Savings also remain permanently available from the moment you open your life insurance in Luxembourg. Therefore, if you need to withdraw all or part of your savings, you can do so, regardless of the amount you have invested. In short, the operation of life insurance in Luxembourg is the same as in France, but you benefit from additional advantages by opening your contract in Luxembourg.
The advantages of investing capital on life insurance in Luxembourg
Let’s go without further ado to what interests us: the additional advantages of investing capital in life insurance in Luxembourg:
- Advantageous taxation : as a French tax resident, you continue to benefit from French taxation since Luxembourg is fiscally transparent. This is good news since the taxation of life insurance is very advantageous both in the event of the life or death of the subscriber.
- Financial security : your capital is protected in the event of default by the insurer. Indeed, the insurer must always separate its own funds from those of the clients. This means that clients’ assets are always housed in an entity other than that of the insurer (in an external bank). The CCA (Commissariat aux Assurances Luxembourgeois) ensures that there is real segregation of assets.
- Diversified management : life insurance contracts in Luxembourg allow for a diversity of management and much greater investment possibilities than in France. For example, it is possible to have several currencies within the same contract (in Euro, Dollar or other) and to be able to invest in private equity (PE) that is to say unlisted companies.
- Greater stability in the country : Luxembourg is a very stable country economically and politically. The debt to GDP in Luxembourg is 30% against 120% for France!
How can a consulting firm help you invest your capital?
It is in this perspective that going through a consulting firm (like WSI Consulting for example) represents real added value. Thus, you will enjoy the following advantages:
- Regular and long-term monitoring of your life insurance contract
- Creation of an audit of your situation and your objectives
- Proposals for tailor-made solutions (in particular thanks to the collaboration with many insurers)
- Degressive management fees: the greater the amount invested, the lower the management fees.
- Long-term advice adapted to your situation
- Proposal of an allocation linked to the level of risk you wish to take
- Objective and independent advice
- …
It is difficult to list all the advantages of going through a firm to invest your capital on life insurance in Luxembourg. Nevertheless, if you had to remember only one thing, it is that it is a real and concrete support throughout your life insurance. Enough to ensure you an investment in complete peace of mind, even if, in the end, you remain in control of what you want to do with your money.
Content offered by Assurance vie Luxembourg
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