Life insurance and taxation

Like every year, the last quarter of the year is an opportunity to look at the solutions available to make the best use of the amounts deductible from your tax return. It's also a good time to take out savings products tailored to your own needs and investor profile.

, Sales Executive Local Market at Cardif Lux Vie, discusses these seasonal themes.

What solutions might be of interest when preparing your tax return?

In Luxembourg, the last few weeks of the year are synonymous with tax returns, and insurance is an effective way for individuals and professionals alike to reduce their taxable income while preparing for the future.

Several types of insurance policies are tax-deductible under the heading "Special expenses":

- Premiums paid on "article 111bis" supplementary pension scheme insurance contracts (pillar no. 3 of the pension system), and on "article 111" programmed savings life insurance contracts;

- The single insurance premium paid to cover a mortgage loan for your own home (ASRD contract - Assurance Solde Restant Dû, with a single premium payment);

- For self-employed workers, premiums paid on "Article 110" supplementary pension scheme insurance contracts (pillar no. 2 of the pension system).

What is the added value of Cardif Lux Vie and its solutions?

Our added value lies first and foremost in the solidity of our Company and in the strength of our business model, with both deep roots in the Luxembourg market and a diversified international Wealth Insurance business. We are also backed by a leading European financial group: Cardif Lux Vie is 66.7% owned by BNP Paribas Cardif and 33.3% by BGL BNP Paribas. This enables us to sustain our development over the long term within a framework of controlled risk, and thus provide our customers with the stability and peace of mind they expect.

This diversified model enables us to offer Luxembourg residents an unrivalled range of investment vehicles. Within our 'programmed savings' or 'pension savings' contracts, customers can invest in Collective Internal Funds (or FICs profiled according to the level of risk desired by the customer), external funds (selected according to both their performance and strict ESG criteria), or in the General Fund. The latter, managed directly from Luxembourg by our team of experienced managers, has assets under management of almost €8 billion and offers a capital guarantee (gross of management fees and tax) provided directly by the insurer. It has performed very well, with a 3.5% return in 2023 (gross of management fees and tax).

Cardif Lux Vie's offering also gives customers a high degree of flexibility in managing their contracts: switching between products, making additional payments, increasing or reducing the periodic premium, or even suspending the payment plan to deal with unforeseen circumstances. All these operations are possible and handled by a dynamic, responsive team.

How do you reconcile savings and responsibility?

At Cardif Lux Vie, we take a strategic view of ESG issues and work actively to develop more responsible contracts. In this respect, we are particularly proud to have recently been awarded the LuxFlag "ESG Insurance Product" label for the 3rd year running for our tax-deductible "article 111bis" pension insurance and "article 111" programmed savings life insurance policies. We are the first company in Luxembourg to be awarded these labels. In practical terms, this means that all the investment vehicles we offer, classified as Article 8 or 9 under SFDR regulations, respect, encourage or promote investments or projects with environmental or social qualities.

More generally, Cardif Lux Vie's mission is to make insurance more accessible, i.e. more inclusive, more understandable, simpler, easier to underwrite and easier to use. Specifically, in 2024, Cardif Lux Vie redesigned its OptiSave+ programmed savings contract to make it more inclusive, by reducing the medical formalities for death benefits, regardless of the policyholder's age.

In conclusion, Cardif Lux Vie remains committed to providing its clients and partners in Luxembourg with real added value in the distribution of our insurance solutions. The company will provide all the technical and commercial support required to respond quickly to customer requests before 31 December, the deadline for submitting tax returns.

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