
Case Study: Portability France - Italy
Euro Fund | Units of account | |
---|---|---|
Cover | Total premiums paid (denominated in foreign currency) minus the costs of the policy | Number of units of account |
Financial risk | Supported by the insurance company | Supported by the subscriber |
Underlying | Mostly government and corporate bonds | All types of financial assets authorised by the insurance company |
Return/performance | Extremely limited, linked to the composition of the euro fund, the fall in government bond yields and the insurance company's policy on profit distribution | Potentially unlimited, depending on the performance of the policy’s underlying assets |
Investment strategy | Limited to the insurance company's strategy for the management of the euro fund | Customisation of the strategy depending on the client's investment objectives |
Investment limits | Limited to the part of the premium invested in euro funds by the insurance company | No investment limits (except for the choice of specific assets) |
Exit penalties |
Potential exit penalties in the event of early surrender (according to the company's euro fund) |
In practice, there is no exit penalty for the policy’s underlying investments |
The euro fund and units of account are both eligible investments within a Luxembourg life insurance policy. The euro fund offers a guarantee of the premiums paid (less the contract fees), unlike units of account whose performance is linked to the underlying assets of the contract. The unit-linked life insurance contract offers greater flexibility in terms of the type of eligible financial assets and customisation of the strategy according to the risk profile of the policyholder.