Life insurance Luxembourg

It is subdivided into assurance on death, insurance on  survival, mixed insurance and additional benefits.

Assurance on death includes:

•    Temporary assurance that covers the insured for an amount that remains the same for the whole duration of the policy. This amount is paid to the beneficiary in the event the insured dies during the term of the policy.
•    temporary insurance covering the balance remaining of a medium or long term loan in the event the insured dies during the term of the policy.The beneficiary in this case is usually the lending organisation or bank.

Assurance on survival is essentially made up of a lump sum paid on maturity.

This capital can be guaranteed in the policy (plus profit sharing) or directly linked to an investment fund.

For the latter, it should be understood that the investment will go up and down depending on the stock market. You mustn’t be alarmed by this since all savings invested by insurance companies are strictly controlled by the Commissariat aux Assurances of Luxembourg.

They compile a list of funds and guidelines to protect the investor. The greater the investment the more flexibility there is in that regard.

Mixed insurance includes both a death component and a life component. With this type of cover the risks are mutually exclusive i.e. the insurer pays either in the event of death or the event of survival. Special packages can be adapted to customer needs if they intend to have more coverage for the risk of death or conversely more coverage on survival. Fixed term insurance is mainly used to protect the future of your children or to build a pension pot.

It is possible to save with life insurance to build up a lump-sum for your old age. This is possible for everyone but it is fiscally more attractive for families with several children: maximum deductions!

There are four additional benefits available:

•    additional accident insurance, or ACRA (as known it’s known in Luxembourg), covers a payment of double or triple the death benefit if the insured dies as a result of an accident
•     additional disability insurance, or ACRI (as known it’s known in Luxembourg), covers the premiums if the insured becomes disabled during the term of the policy i.e. the insurer pays the premiums for the insured to the extent of the disability by % so long as it exceeds 25% and the disability has lasted at least 3 months
•     additional insurance against the risk of hospitalisation, or ACRHo (as known it’s known in Luxembourg), is a daily benefit paid to the insured for each day spent in hospital
•    additional family insurance guarantees the payment of an additional death benefit in the event that the partner of the insured dies either at the same time as the insured or after the insured, provided it is before the end of the policy.

Insured person or product:

1.    an individual
2.    a couple: In this case we are talking about insurance for two people
3.    a group of people: In this case we are talking about group insurance

Tax deductions:

Savings invested in life assurance are deductible as special expenses, under article 111 of the tax code.

Life, Death, Disability, Health, Accident and Civil Liability Insurance
Maximum deductible amounts as of 1 January 2002.

Without spouse With spouse
Taxpayer € 672 € 1 344
Taxpayer with 1 child € 1 344 € 2 016
Taxpayer with 2 children € 2 016 € 2 688
Taxpayer with 3 children € 2 688 € 3 360


Any capital paid on maturity is not taxable as income.
Contact us to find out how you could save by filing a tax return and achieving tax optimisation

Higher limit and increased higher limit for payment protection insurance
When the borrower takes out a temporary assurance on death with a single premium to cover a real estate loan or a mortgage, special maximum amounts are added to the normal limits.

Taxpayer Increased limit (1) Higher increased limit
Between 30 and 50 (per year)
Maximum deductible
50 and over
Without children € 6 000 € 480 € 15 600
With 1 child € 7 200 € 576 € 18 720
With 2 children € 8 400 € 672 € 21 840
With 3 children € 9 600 € 768 € 24 960
With 4 children € 10 800 € 864 € 28 080
Per additional child € 1 200 € 96 € 3 120

How to calculate the absolute limit per taxpayer

  • basic limit: €672 + €672 for joint taxation + €672 per dependent child
  • allowance for single premium: sum of the single premium (without exceeding €3000) + €672 per child dependent
  • additional allowance: 8% x number of years over 30 (age of borrower when policy taken out) x result of b.