Life insurance is used to protect your loved ones, but also offers you a way of building long-term capital for yourself (to finance a project, top up your pension) or your heirs (on your death). Depending on the solution you choose, it may also enable you to benefit from a regular income or a potential tax advantage.
The best-known and most widely offered life insurance policies in Belgium are the Branch 21 and Branch 23 policies.
"}},{"componentType":"paragraph","title":"Investment insurance (Branch 23)","richBody":{"value":"Classic investment insurance
A Branch 23 investment insurance combines life insurance with an investment in a so-called "underlying" investment fund. The return on this investment insurance is not guaranteed. It’s linked to the performance of the underlying funds in which the insurer has invested the capital you have entrusted to them. To do this, the insurer follows a predefined investment strategy of which you are informed from the outset.
Branch 23 life insurances offer great flexibility in terms of payments ('premiums') and withdrawals (‘redemptions’). Indeed, you can invest everything in one single premium, invest smaller amounts on a recurring basis at your own pace, or combine one single premium with recurring premiums. You pay 2% insurance tax and an entry fee (generally 2%) on each premium paid.
Redemptions are possible at any time. Branch 23 policies offer the significant tax advantage of not being subject to withholding tax on capital gains, regardless of when you make your withdrawal. Please note, however, that redemption charges may be levied by the insurer depending on when you make these withdrawals.
Branch 23 products with guaranteed annuity
These are investment insurance products which invest in an underlying investment fund and guarantee you regular payments (monthly, quarterly, half-yearly or annually) of a pre-defined annuity that is guaranteed for life.
The value of the capital you invest at the outset (the ‘reserve’) changes over time depending on the performance of the underlying investment fund and as your annuity payments are made. If your capital decreases, the predefined annuity will never decrease (unless you withdraw money from your policy yourself).
"}},{"componentType":"paragraph","title":"Savings insurance Branch 21 (THIS PRODUCT IS NO LONGER SOLD.)","richBody":{"value":"A Branch 21 savings insurance is a secure way to save for the medium or long term. You benefit from a guaranteed fixed interest rate on each payment you make up to the maturity date of your policy.
When your policy matures, you get back the premiums you saved plus interest and any profit-sharing amounts. Please note that if you withdraw your capital before maturity, the insurer may deduct charges, and you may be penalised in terms of taxation.
You can use your policy to build up your pension savings, or long-term savings, and thereby benefit from a potential tax advantage (tax relief of 25 to 30%) depending on your personal situation.
What fees are involved? When you subscribe, you pay an entry fee (usually 3.5%) and taxes (2%, except for the pension savings option, which benefits from the specific exemption for pension savings).
Unlike traditional savings or investments, life insurance is an excellent way of planning how you want your estate to be passed on, without having to draw up a will.
"}},{"componentType":"productFeatures","highlighted":false,"items":[{"body":"Life insurance enables you to designate the persons who will receive the capital from your life insurance policy at the time of your death (one or more persons, such as your children, grandchildren or other persons). As the policyholder, you can also change the beneficiaries at any time (provided they have not accepted the benefit), whereas a donation for example is generally irreversible.","title":"Great flexibility"},{"body":"You retain control over your assets and the income they generate. You can redeem all or part of the capital in the life insurance policy.","title":"You decide"},{"body":"The assets built up are more readily available if the beneficiary or beneficiaries are specifically designated. Your beneficiaries do not have to wait for the estate to be officially closed by a notary to access the capital. Please note, however, that inheritance tax will also be payable on these assets.","title":"The funds are rapidly available after your death"}]},{"componentType":"sectionTitle","title":"Want to find out more?"},{"componentType":"paragraph","richBody":{"value":"Want to find out more about your life insurance options? Don't hesitate to contact your Personal Banker. He or she will work with you to find the best option for your own circumstances.
"}}]}}}