LUXEMBOURG LIFE INSURANCE

As an alternative to traditional French life insurance, a person resident in France also has the possibility of subscribing to a life insurance contract with a Luxembourg insurer. It will then be a contract governed by French law, giving the right to the same tax advantages as French life insurance, but the offer of Luxembourg insurers has been specially designed for wealth customers with significant capital to invest, and present many advantages:

 

- The Triangle of Security: a reinforced policyholder protection regime, in which all assets linked to life insurance contracts must be deposited in the accounts of an independent depositary bank, which is itself approved by the Luxembourg regulatory agency of the insurance sector, the Commissariat aux Assurances (CAA). In addition, the assets of the subscriber must be separated from the capital of the insurance company and the bank, and the CAA closely monitors compliance by each life insurance company with the rules in terms of solvency ratio.

 

- The “Super privilege”: the subscriber of a Luxembourg life insurance contract has the status of first-rank privileged creditor of the insurance company on the mass of assets representing technical provisions, and this for an unlimited amount. In France, this protection is limited to 100,000 euros per person and per bank.

 

The offer of Luxembourg insurers also differs by giving the possibility of setting up within its life insurance contract, a Dedicated Internal Fund (FID) or a Specialized Insurance Fund (FAS):

 

FID: The management of the client's portfolio will be delegated to a third-party management company independent of the insurer, which will set up dedicated and personalised management for the client, within a completely decompartmentalised investment universe: for example, it will be possible to invest in ETFs, or even in securities directly. The choice of manager will be made from a large number of management companies available, and we will be there to help you find a quality manager who is able to meet your needs.

 

FAS: Since 2015, it has also been possible to set up a Specialised Insurance Fund, which has in common with the FID that it provides access to an extremely wide investment universe. This time, however, there is no dedicated manager, and it is the investor who will make his own management choices. One limit however, the FAS must respect the rules of life insurance and the investments are aimed at the long term, therefore arbitrage between funds remain possible but limited. This choice can be very interesting for a wise investor who wishes to manage his investments by himself, while limiting the annual management fees of his contract and taking advantage of the favorable tax framework of Luxembourg life insurance.

 

We have extensive experience in both FID and FAS and in both cases we will be able to offer you personalised support at very competitive rates, do not hesitate to contact us so that we can study together more in details your project.