Advantages of investing through Life Insurance Policies
Single Premium Life Insurance Policies may be regarded as an alternative to Life Insurance which corresponds to continental mentality.Such Policies represent a legal patrimonial structure with the following advantages.
1. Transfer of Ownership
When the Policy is subscribed the Insurance Company becomes the legal owner of the assets paid in as a premium.
2. Exemption from taxation of income derived from assets
Luxembourg Insurance Companies are exempt from tax on the income and gains they make from the investment portfolios. Luxembourg imposes no taxes within the policy or on payment of surrender, maturity or death benefit proceeds.3. No tax due from the Policyholder during the Insurance Term
Under Luxembourg law, the Policyholder has initial rights regarding the Policy such as change of beneficiaries etc. At the same time the Insurance Company is the legal owner of the assets paid in as a premium and therefore the Policyholder is exempt from tax until the end of the Policy term.4. Optimisation of taxation by application of Double Tax Treaties concluded between the country where the Insurance Co is resident and the country of investments
Double Tax Treaties concluded between different countries apply to residents of the two countries who signed the Treaty. Luxembourg Insurance companies are Luxembourg residents for the purposes of Tax Treaties. Provided the entities in which the Policy's assets are invested are considered.
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