Investing in Luxembourg life insurance: EF, ICF, SIF and IDF
Luxembourg life insurance offers unparalleled flexibility and security in terms of investments. At the heart of this architecture are four vehicles adapted to the different forms of investment: external funds (EF), internal collective funds (CIF), internal dedicated funds (IDF) and specialised insurance funds (SIF).
Choosing Luxembourg life insurance means that clients benefit from a tailor-made investment strategy based on:
- Their wealth objectives
- Their investor profile
- Their current and future country of residence
The different vehicules for investing in life insurance
Video transcript
Luxembourg life assurance
A financial instrument with manifold assets
#investment
Investing in Luxembourg life assurance
With Luxembourg life assurance, your client benefits from a customised investment strategy according to their:
- Wealth objectives
- Investor profile
- Country of residence (present and future)
Four investment vehicles
The wealth may be invested in four different types of vehicle
COLLECTIVE MANAGEMENT
1. External funds (EFs)
Mutual funds proposed by reputed international fund managers
2. Internal collective funds (ICFs)
Funds created by an insurance in collaboration with fund managers
INDIVIDUAL MANAGEMENT
3. Internal dedicated funds (IDFs)
Funds specially created for your client
4. Specialised insurance funds (SIFs)
Tailor-made funds with greater freedom of management
Maximum flexibility!
Five advantages for maximum flexibility
- Multi-currency management option
- Multiple vehicles within the same policy
- wide range of assets
- Portfolio diversification
- Adaptable investment strategy
Luxembourg life assurance
Tailor-made wealth management solutions
Disclaimer: the content of this communication does not constitue any offer or solicitation for the purchase of any life assurance product. OneLife does not warrant, represent or guarantee that the information contained within this communication is complete, accurate or up-to-date at the time of distribution. Neither is this information intended to constitute any form of legal, fiscal or investment advice and the information provided in this communication or any other pre-contractual document should therefore be used only conjuncture with appropriate professional advice obtained from a suitable qualified independent and professional source. January 2023
Four vehicles are available to house investments within the life insurance policy:
Collective investment vehicles:
- External funds (EF): insurer selection of mutual investment funds offered by reputable international fund managers.
- Internal collective funds (ICF): funds tailor made by an insurer in collaboration with well-known asset managers according to specific objectives. ICFs are specific to an insurer and are reserved for its clients.
Individually-managed vehicles
- Internal dedicated funds (IDF): investment funds tailor-made for the client, managed by the investment manager of their choice, with assets held in the custodian bank that they have appointed.
- Specialised insurance funds (SIF): tailor-made investment funds with two management options: either to allow the client to manage their investments with the help of an advisor, or to invest in one go and keep the investments until maturity, without the intervention of a manager.
Access to these different vehicles depends on the net transferable wealth, the amount invested in the life insurance policy and the policyholder’s country of residence. It is possible to combine several vehicles within the same policy according to the objectives.
Collectively-managed funds
External funds (EF)
The insurer offers a selection of mutual funds marketed and managed by internationally renowned managers. The client makes their choice with the help of their advisor based on their objectives and risk profile.
The client has the choice between equity, bonds, money market, mixed, sector-based, flexible funds, etc., denominated in euros or in other currencies.
Internal collective funds (ICF)
These are tailor-made funds designed by the insurer in collaboration with reputable managers and are reserved for the company’s clients in order to meet their different wealth objectives and investment profiles.
They allow a higher degree of personalisation than external funds at lower transferable wealth and investment requirements than individually managed funds.
Automatic switching
Collective investment vehicles offer an automatic switch option that can be activated or deactivated at any time.
The automatic switch option makes it possible to activate automatic fund purchases and sales within the vehicle in order to:
- Secure capital gains
- Minimise losses
Individually-managed funds
Internal dedicated funds (IDFs)
The client’s assets, which are held by the custodian bank of their choice, are entrusted to their appointed manager, who offers a personalised management based on the client’s objectives and investor profile.
This approach allows for a tailor-made investment strategy. It also offers access to a much wider range of assets, depending, however, on the client’s transferable wealth and the amount invested in the policy.
For families: the Umbrella IDF
Members of the same family may jointly hold an IDF for their respective life insurance policies, provided that they have the same investment strategy.
Specialised insurance funds (SIFs)
N.B. the availability of this vehicle depends on the policyholder’s country of residence.
With this vehicle, the policyholder has increased management freedom. The assets are entrusted to the custodian bank of their choice, with two management options:
- The “advisory” SIF: the client chooses their investment adviser. The latter sends them buy and sell proposals which they validate on a case-by-case basis. As such, the client remains an active player in the management of their assets.
- The “Buy and Hold” SIF: the client selects the assets held in the policy and entrusts them to the custodian bank of their choice until the expiry of the policy. This approach provides access to a broad investment universe including real estate funds, private equity etc. (in compliance with the legislation).
