What is a tak21 life insurance policy?

 

 An insurance contract that is regularly used as a savings product, but also often in the context of estate or succession planning.

Expect net return

Several insurers have increased the guaranteed interest rate. For those who deposit money in a branch21 insurance policy in mid-February 2023, there is already much more interest than in previous years. But much more than a net return of 1.5 to 2 percent per year on the savings reserve is not yet possible. The savings reserve is what remains after deduction of entry costs.

Characteristics

A branch 21 life insurance policy is a savings product with a term of at least eight years. The return of a class 21 consists of two components: a guaranteed return and a profit sharing, which depends on the results of the insurer. Please note that some insurers only guarantee the return in the first year of the contract. Other insurers guarantee the return for the first eight years and others for the full term. A branch 21 life insurance policy should certainly not be confused with a branch 23 life insurance policy, where neither the capital nor any return is guaranteed.

2022

After several interest rate increases by the European Central Bank, various insurers started raising the guaranteed interest rate on branch 21 life insurance policies in the autumn. Several insurers now guarantee more than 1 percent interest. In the light of an inflation of more than 10 percent, this still looks meager, but that inflation is likely to fall in the coming years. There are not yet many super safe savings alternatives that yield more.

Protection

The reserves - what remains after deducting the costs and premium tax - are covered in our country by the deposit guarantee up to 100,000 euros per customer and per insurer. The Belgian insurers pay a contribution to the Guarantee Fund for this. If you take out a contract with a foreign insurance company, you do not have that protection. Those who take out a life insurance policy that pays out a capital upon death can designate one or more beneficiaries. With such a savings formula you can offer the people you love - but who do not automatically inherit something from you - financial protection in the event of your death.

Cost

The entry costs that insurers charge, sometimes run up to 6 percent. Only 94 euros of every 100 euros ends up in the insurance contract. This way you start saving with a substantial arrears. Negotiating the costs well is the message. In the essential information of the life insurance, the investor can find the expected returns in different scenarios and over different periods. Those scenarios are, for example, a stress, unfavorable, moderate and favorable life and death scenario.

Taxation

Of every 100 euros you deposit, 2 euros also go to the tax authorities. This tax is called the premium or insurance tax. A life insurance policy as part of pension savings escapes that premium tax. In exchange for that tax at the start, no withholding tax is due at the finish line on branch 21 contracts that run longer than eight years and one day.

Sustainable or not?

Only AG Insurance and Argenta currently have branch 21 life insurance policies with the Belgian label for sustainability from Towards Sustainability . The sustainable supply is also limited for savings and term accounts. Only the niche banks that focus 100 percent on sustainability are making the effort for the time being. The money that people deposit into accounts and branch 21 insurance usually ends up on the balance sheet of the financial institutions. It is easier to invest the customers' fresh money in a sustainable way than to make the institution's entire policy more sustainable.