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Luxembourg assurance-vie
Luxembourg assurance-vie: the same taxation, unlimited protection.
For a French resident, a Luxembourg contract is taxed exactly like a French contract. The differences lie in the protection of your assets, the investment universe, and the fact that the contract remains valid even if you move abroad.
Your assets are protected by a super-privilege, with no limit on the amount (Article 118 of the Luxembourg law of December 7, 2015). In France, policyholders' coverage is capped at €70,000.
Luxembourg levies no tax: this is tax neutrality. Only the state where you reside imposes the contract, according to its own rules.
contributions, with €250,000 of financial assets, open access to dedicated funds and a wider investment universe (Circular letter 15/3 from the Insurance Commission).
The triangle of security
Three parties, and your assets kept separate from those of the insurer.
The Commissariat aux Assurances
The Luxembourg regulator approves the insurer and continuously monitors the assets that represent your contracts.
- Approval of the insurer by the Luxembourg regulator
- Ongoing monitoring of the assets that represent your contracts
The custodian bank
Your assets are held at a custodian bank, separate from the insurer's own funds.
- Assets held at a custodian bank
- Separated from the insurer's equity
- A tripartite agreement organizes the control
The super-privilege
If the insurer were to default, the policyholders would have priority over all other creditors over the assets of their contracts.
Taxation
For a French resident, nothing changes.
Articles 125-0 A, 990 I and 757 B of the French General Tax Code (CGI). A contract taken out abroad must be declared each year with the income tax return (Article 1649 AA of the CGI, form 3916-bis).
For whom
Three situations where it makes the difference.
The limits
This is something that the super-privilege does not guarantee.
The security triangle protects the position of subscribers in a liquidation. It does not protect the value of the underlying assets.
The case of FWU Life Insurance Lux: on July 19, 2024, the insurer informed the Insurance Commission that it no longer met its capital requirements. On July 23, the regulator froze the assets representing the contracts. The court ordered liquidation on January 31, 2025, and claims remained open until January 31, 2028. Protection therefore hinges on three choices: the insurer, the investment vehicles, and the advisor.
Sources: Luxembourg Insurance Commission (press release of July 19, 2024 and information on the liquidation of February 5, 2025); Law of December 7, 2015, Article 116; ACPR, competent guarantee fund in the event of failure of insurance companies (the FGAP does not intervene for life insurers operating in France under freedom to provide services).
The contracts
The Luxembourg insurers in our selection.
Entry fee: 0.5 % of payments, 0 % on SwissLife Altitude. With €125,000, €250,000 and €500,000 paid in, 0.5 % represents €625, €1,250 and €2,500. Annual management fees are the same from one insurer to another and decrease according to the amount invested: they are listed in the key information document of each contract, provided before any subscription (documents to be receivedThese are conditions specific to Balmont Conseil.
Simulators
Run the numbers with your own figures.
Frequently asked questions
What we are being asked to do.
What is a Luxembourg assurance-vie policy?
A Luxembourg life insurance policy is a life insurance contract taken out with an insurer established in Luxembourg, under the supervision of the Insurance Commission. For a French resident, it is taxed exactly like a French contract: Luxembourg levies no tax.
The difference lies in the protection: your assets are separate from those of the insurer at a custodian bank, and the super-privilege protects them without limit of amount (article 118 of the Luxembourg law of December 7, 2015), whereas the French guarantee stops at €70,000.
Is Luxembourg life insurance risky?
The risk of an insurer defaulting exists, as it does everywhere. It is mitigated: assets are segregated at a custodian bank, there is ongoing regulatory oversight, and there is an unlimited super-priority lien. The French €70,000 guarantee fund does not apply to a life insurance company established in Luxembourg.
With a unit-linked contract, the capital remains exposed to the markets, in Luxembourg as well as in France. The case of FWU Life Insurance Lux, which went into liquidation on January 31, 2025, is detailed above.
Is this declared to the French tax authorities?
Yes, and it's mandatory: a contract taken out with an insurer established outside of France must be declared annually with your income tax return (Article 1649 AA of the French General Tax Code, form 3916-bis). The Luxembourg insurer also transmits the contract information to the French tax authorities.
What is the minimum amount required to open a contract?
Insurers often set an initial payment between €100,000 and €250,000. Access to dedicated funds and unlisted assets then depends on your subscriber category, defined by the Insurance Commission: for example, €125,000 paid in and €250,000 in financial assets for the first category (circular letter 15/3).
What are the costs of a Luxembourg contract?
With Balmont Conseil, the entry fee is 0.5% of the deposits, and 0% with SwissLife Altitude. Annual management fees are the same from one insurer to another and decrease depending on the amount invested; they are detailed in the key information document for each contract, provided before subscription. See also entry, management and arbitration fees.
Can I transfer my French assurance-vie policy to a Luxembourg contract?
Not directly: a transfer without loss of seniority is only possible between contracts with the same insurer (PACTE law of May 22, 2019). It is necessary to redeem the existing contract, which triggers tax on the gains, and then reinvest.
Often, the old contract is kept because of its seniority, and the new funds go to Luxembourg. Both options are calculated before a decision is made.
What happens if I move abroad?
The contract remains in effect, without any termination. Luxembourg does not levy any taxes: it is the country where you reside that taxes withdrawals and transfers, according to its own rules and tax treaties. This is already the principle today: for a French resident, the Franco-Luxembourg convention of March 20, 2018, reserves taxation for France. This is what makes it the benchmark contract for mobile families. After leaving the European Union, some insurers no longer accept additional payments: the insurer confirms this in writing before departure. See also What to do with your French assurance-vie policy when leaving.
