Characteristics
A branch 21 life insurance policy is a savings product with a term of at least eight years. Its return is made up of two elements: on the one hand, a guaranteed return and, on the other hand, a profit sharing which depends on the results of the insurer. Please note that the duration of the guaranteed return varies depending on the insurer. Some guarantee it only for the first year of the contract, others for the first eight years, still others for the entire life of the product. Finally, branch 21 life insurance should not be confused with branch 23 life insurance which guarantees neither capital nor return.
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A branch 21 life insurance policy is a savings product with a term of at least eight years. Its return is made up of two elements: on the one hand, a guaranteed return and, on the other hand, a profit sharing which depends on the results of the insurer. Please note that the duration of the guaranteed return varies depending on the insurer. Some guarantee it only for the first year of the contract, others for the first eight years, still others for the entire life of the product. Finally, branch 21 life insurance should not be confused with branch 23 life insurance which guarantees neither capital nor return. Various financial institutions report that they sell more branch 23 than branch 21 life insurance policies. Yet Belgians are known to be prudent savers. Traditionally, branch 21 insurance is more popular. Due to historically low interest rates, however, few people are still attracted to such policies. More and more branch 23 products are also offered as part of pension savings or supplementary pensions (group insurance), whereas previously, only branch 21 life insurance allowed ” save for the pension. The reserve – what remains after deduction of costs and premium tax – is protected, in our country, by the deposit guarantee, up to 100,000 euros per customer and per insurer. Belgian insurers pay a contribution to the Guarantee Fund for this purpose. If you have taken out a contract with a foreign insurance company, you do not have this protection. Anyone who takes out a life insurance policy under which capital is paid out in the event of death can designate one or more beneficiaries. This savings formula makes it possible to offer loved ones – who are not necessarily legal heirs – financial protection in the event of death. The entry fees charged by insurers sometimes go up to 6%. In this case, for each tranche of 100 euros, only 94 will actually be paid into the insurance contract. Under these conditions, you therefore start saving with a serious delay. We advise you to negotiate well. In the life insurance key information document, the investor can find the expected returns in different scenarios and over different time periods. These scenarios are, for example, a “stress” scenario, an unfavorable, intermediate and favorable scenario, in the event of life as in the event of death. On each tranche of 100 euros paid, 2 euros go to the tax authorities. This tax is called the premium tax or insurance tax, which is exempt from those who have taken out life insurance taken out as part of their pension savings. In exchange for this tax paid on departure, you will no longer have to pay withholding tax on branch 21 contracts kept for at least eight years and one day. Currently, there are only 14 branch 21 insurances that have obtained the Belgian label for sustainability from Towards Sustainability. They are all issued by AG Insurance. “For the moment, the offer is quite limited but the interest of the insurance sector continues to grow,” says Tom Van den Berghe of the Central Labeling Agency. We can therefore observe a clear difference with savings accounts and term accounts for which interest is limited to niche banks that focus 100% on sustainability. It may not sound very sexy, but savings and investment insurance are very common, even among young people who are saving for their pensions. “Michaël Van Droogenbroeck and Ewald Pironet, authors of the book” Investeren in de eerste helft van je leven ”
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