When to Consider Buying Life Insurance

10 things to know before getting life insurance in Luxembourg

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Life insurance should be considered to protect your loved ones. But do you know enough about this financial product before entering into a contract? Discover our answers to the questions you ask yourself!

In a few words what is it?

This type of insurance is usually long-term and provides a saving : Your heirs will benefit when you die.

Specifically, you will be placing money regularly until the end of your life.

Are there any fees?

Every time you make a payment, you have to pay an entrance fee up to 5% be can. However, it is entirely possible to negotiate them. If you choose a contract that is only available online, this fee may not apply.

Management fees can also be collected annually. They are usually around 1% and are deducted from the amount you have saved. Some companies offer a regressive rate: the more you save, the lower the cost.

Note that any fees you may be charged are listed in black and white on your contract. Before signing it, it is better to read it carefully so as not to be surprised at the first samples.

Who do I contact?

If you are with a Bank or one insurer subscribe, you are required to take his products with you, you will be offered no other choice. To avoid this, you can get one Look for brokers .

The latter enjoy a certain degree of independence and can recommend the most suitable products for your profile regardless of their origin. To do this, he conducts a market study before making a proposal.

Is it risky?

The concept of risk differs from person to person. In order to minimize possible losses, however, the option " Means in euros "best suited. Here there is no risk of losing the amount invested, it always stays the same: only the amount of the interest varies. If you are willing to take a slightly higher risk for better returns, you can opt for." Stock market shares decide or in Invest real estate .

Does your heart swing between the two possibilities? You can mix the media so that whatever happens, you are sure to still get some benefit.

In order to use the security card, you also have the option of taking out several life insurance contracts. They split your money between different banks / banks online / insurers / etc to protect you if one of them has problems with solvency. So don't go too far at the risk of your management becoming chaotic.

How do I name my beneficiaries?

When you enter into your contract, you will be asked to fulfill a recipient clause: it exists in the "standard" version and identifies your spouse and children (born or unborn) as beneficiaries of your life insurance .

However, you are under no obligation to opt for this imposed clause. You can customize them by entering the name of your heirs and the distribution of capital for each of them.

This clause is modifiable throughout your life and is not fixed at the time you sign the contract.

Can I touch the money invested?

Yes, you can get the capital there at any time placed to have, but no costs (unless you have chosen a product due to it and that it hasn't happened yet).

How much to bequeath?

To help you, make a list of your monthly expenses : Shopping, transportation, housing, school fees for children, etc. With this fixed amount you have a better view of the lifestyle that you and your loved ones lead and you can more easily determine how much money they will need to continue the same after your disappearance to live.

Also, consider how much money your family will need to fund your funeral so they can pay for it without embarrassing themselves.

See your calculations The length of time you want to keep them safe . Even if you can only invest what seems ridiculous right now, go for it. As your income grows, you can increase your life insurance coverage in the future. It is better to have a modest insurance rather than insurance.

You can see for how long you would like to accommodate your relatives. Even if you can invest an amount that you find uncomfortable, go for it. As your income increases in the future, you can increase your life insurance coverage. Better to have modest insurance than no insurance at all.

Subscribe to life insurance, is it complicated?

No, especially since today you can do it directly over the internet to do. From home you can too by phone contact an advisor who can guide you through the subscription process.

Can I transfer my contract?

It is impossible to switch from one bank / insurer to another . However, you can cancel your contract at any time with the organization where you have a contract. Before doing this, it is better to do even better research as it could cost the closure, especially from a tax point of view. Sometimes it's better to leave your life insurance like this and just stop paying any more money. There is another option: buy back your insurance and withdraw the capital regularly.

Is it beneficial for tax purposes?

As a policyholder, you enjoy tax deductions, regardless of whether you are a Luxembourg resident or a cross-border commuter. You can deduct your life insurance premiums by entering the amount on your tax card.

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