January 19, 2022
Flexibility is a major aspect of OneLife solutions. It is inherent to all levels of the solution, in the contract’s features, the variety of investment vehicles, and in its open architecture.
Many features can be tailored at the application stage, and in some instances throughout the life of the contract. Some aspects may appear insignificant but prove to be decisive for your client. The choice of the option as to when the policy is to be terminated (on the death of the assured or at a specified date during the assured’s lifetime) may be an important factor in regards to the tax benefits in certain countries. The appointment of beneficiary(ies) can also be adapted to the evolving context of your client during the contract’s lifetime.
Investment-wise, the solution also offers significant flexibility with four options available:
- External Funds
- Internal Collective Funds
- Internal Dedicated Funds (discretionary mandate by default)
- Specialised Insurance Funds (advisory or buy & hold, only available in some countries such as France or Portugal)
As your client’s needs may change over time, (s)he doesn’t need necessarily to choose only one investment vehicle. It is possible to combine different vehicles within the same contract and switch between them without surrendering the contract (according to his/her tax residence).
The external fund and the internal collective fund solutions allow for collective asset management and are available with an initial premium of EUR 100,000.
The two other solutions allow for individual asset management. Each fund is tailored to the specific needs of a single client and is available with a minimum initial premium of EUR 250,000.
Appointment of custodian bank
For each of these bespoke solutions, your client can appoint the custodian bank of his/her choice and change at any time. It can be one of the 90+ OneLife partner banks, or a new one, provided it is authorised by the Commissariat Aux Assurances.
A custodian bank is often referred to somewhat irreverently as just a holder of the funds, but in reality, this choice has a substantial impact on the overall investment servicing proposition.
As custodian of underlying assets of OneLife contracts, a bank has to be be regulated by the Commissariat Aux Assurances, Luxembourg insurance regulator keeping a close eye on the bond holdings, according to the Luxembourg Triangle of Security. Its role is to protect the policyholder by separating the assets held within a life insurance vehicle from those of the insurance company and the custodian bank, providing the policyholder with a guarantee against insolvency of the insurer or bank.
With these two prudential authorities, the assets deposited with a bank and held within a life insurance contract benefit therefore from a very high level of protection.
At OneLife the standard currency for a contract is Euro, but contracts can also be opened in Sterling, Dollar, Swiss Franc, Danish krona and Swedish krona. OneLife works with custodian banks that are familiar with thoses currencies.
For clients looking for a credit facility, the life insurance portfolio value can be collateralised. Indeed, the Lombard loan enables the client to leverage their portfolio or make investments outside the bank – financial or real estate – with their insurance contract as collateral for credit repayment.
For further information on Luxembourg life insurance or what OneLife can do for you, please contact our teams.
You may also be interested in:
- Our comprehensive white paper on Luxembourg life insurance featuring client case studies
- British expatriates: wealth solution and future return to the UK – A case study
- OneLife Luxembourg life insurance contracts for UK partners and clients – What impacts following Brexit?
- Luxembourg: your safe haven! – Solid, innovative and transparent