There are different types of life insurance policies: savings insurance (branch 21 ) and branch 23 investment insurance. These life insurance policies are therefore not only an insurance policy but also a savings or investment solution. The big difference between the two is that branch 21 has limited risk and an interest guarantee is given for every deposit for a certain period, while branch 23 insurance invests in underlying funds. With investment insurance, you have a chance of a higher return, but that is of course not risk-free. The life insurance component is largely the same for both: both can be used to do succession planning. Below you will find what you can do with life insurance in terms of succession planning. If you are interested come and visit this site
Money available quickly after death
When you die, your and your spouse’s accounts will be blocked. Before they are released back, the tax authorities or the notary must check whether you or your heirs have tax or social security debts. As long as this procedure is ongoing, the accounts will remain blocked. But if you name your partner or someone as a beneficiary of a life insurance policy, the money from the insurance is available more quickly after death.
Alternative to a will
When you die, your assets do not always automatically accrue to your partner (for example, if you are not married). Then a branch 21 savings insurance or branch 23 investment insurance is an interesting solution. This makes it very easy to designate a beneficiary, such as your partner or your children. Moreover, you can change that choice at any time.
Save inheritance taxes with Generation-Skipping
When inheritance tax is a graduated rate applies: the greater the power, the more it gets into higher tax brackets and the more inheritance your dependents have to cough. If you divide your assets among several people, a larger part of your assets is taxed in the lower brackets and that results in savings. It can be done, for example, by allocating part of your assets in the event of death to your grandchildren via branch 21 savings insurance or branch 23 investment insurance. In many cases, they also enjoy a tax reduction in the inheritance tax. In this way, even a double saving is possible.
Succession planning through donation
A common technique for succession planning is to donate. You only pay the gift tax, which is lower than the inheritance tax. As a donor, you want to be sure that the donated assets are not badly managed. Thanks to a controlled transfer of assets (via a life insurance policy), you still have sufficient control and say over the assets. As long as you are alive, you retain control of the contract and the beneficiary.
Extra protection with additional death cover
To ensure your family or partner against the financial consequences of your death, you can have the assets built up through a life insurance policy supplemented with or up to a certain amount, subject to medical acceptance and subject to payment of the risk premiums. This can be done in the following ways: You want to leave a minimum capital to the beneficiary(ies), regardless of the development of the stock market or of your assets. Then you can opt for a supplement up to the desired amount.
In addition, a percentage death cover is also possible. In the event of the insured’s death, the reserve is then supplemented by a certain percentage. This is very useful in view of the payment of the inheritance tax due. You can also financially protect your next of kin in case you should die as a result of an accident. You always choose to whom the accrued capital will be paid out and you can still change the additional cover during the course of the contract. Keep in mind that additional coverage entails an additional cost and may depend on favorable medical acceptance.
Tax Optimization
Each product has its own taxation. Insurance products are usually subject to a premium tax. You pay stock market tax for financial products such as investment funds and shares. The return is often also capped by a withholding tax. With branch 21 savings insurance or branch 23 investment insurance with (partial) capital protection, you only pay withholding tax if you surrender the contract within the first eight years. In addition, some savings insurance policies also qualify for tax savings, such as pension and long-term savings.