Whether you are a parent or grandparent, it is natural to want to secure your family’s financial future. Possible solutions include tax-enhanced insurance policies specially designed for this purpose, and which allow you to consolidate your future financial position.
Would you like to guarantee financial peace of mind for your family in the event of an accident or your death? Life insurance policies are one option worth considering. Packages vary between companies but the main types can be divided into two categories: term life policies and endowment policies.
Whether the payout is fixed or decreases over time, term life insurance offers your family financial security. In the event of the policyholder’s death during the term of the policy, it pays out money to your chosen beneficiary or beneficiaries.
Mortgage protection insurance covers the outstanding balance of your mortgage. It constitutes a term life insurance and the amount payable will fall over time.
The equivalent insurance for personal loans is called loan protection insurance.We do not cover it in this content.
Strictly speaking, term life insurance pays out a fixed amount. This solution ensures that your beneficiaries receive this money if you die before your policy expires.
Endowment policies combine the benefits of life assurance and insurance. They pay a guaranteed amount if you are still alive when the policy matures, plus any profit share. If the policyholder dies before the policy matures, then beneficiaries receive the guaranteed term payment plus any profit share. Here too, most insurance companies allow you to take out additional cover (disability, accident).
As well as greater financial security for your family, this insurance lets you claim a tax deduction (…)
As well as greater financial security for your family, this insurance lets you claim a tax deduction if you are a Luxembourg (tax) resident. Its amount will depend on your situation.
MAXIMUM DEDUCTIBLE AMOUNTS ON PREMIUMS AND CONTRIBUTIONS | ||
---|---|---|
Taxpayer | Without spouse | With spouse |
without children | EUR 672 | EUR 1,344 |
with 1 child | EUR 1,344 | EUR 2,016 |
with 2 children | EUR 2,016 | EUR 2,688 |
EUR 672 per additional child |
It is worth noting that, although these products are exempt from Luxembourg income tax, the maximum deductions for this insurance cannot be claimed on top of deductions for interest on personal loans. Never forget that tax deductions are subject to conditions and may change with the legislation.
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