Life insurance used for saving planning purposes has existed for a long time. Nevertheless, the culture of saving through life insurance is not very developed in Spain. The tax authorities have focused on creating tax benefits for small savers but not for high net worth investors.
The world of life insurance for private banking clients definitely has a huge potential. The Unit Linked and the Taylor Made Life Insurance contracts are unique and powerful tools for state planning. They are usually unknown by tax and financial advisors due to their initial repulse to insurance policies.
One of ELIPSE’s main targets is to accompany the final client´s tax and financial advisors when they venture within the world of life insurance for state planning. This would always take place under a full collaboration mind frame.
UNIT LINKED POLICIES
This solution/tool, where the client assumes the profit and risk of the underlying assets, is by far, the most powerful vehicle to reach the client´s state planning goals in different family and personal situations.
RECURRENT SUBSCRIPTIONS TO LIFE INSURANCE POLICY
The aging population in Spain and developed countries generates concern on the solvency of the Spanish Public System of pensions to jubilees. This makes savers increasingly analyze and study private saving alternatives. There are many efficient ways of doing this through private insurance companies; ways which are very valid to compensate possible imbalances in the social security in the future.
TOOL FOR THE SUCCESSION PLANNING
The policyholder can designate and modify the beneficiaries in different cases and mark conditions in order to receive the benefit at the time he/she decides
WEALTH PLANNING
Depending on the connection between the policyholder and the beneficiaries, their places of residence and time of receiving the benefit payment there are many alternatives. Advice from a tax advisor is recommended
PORTABILITY
Unit Linked policies are accepted in most jurisdictions. Customers can change their residence without negative effects and keep their policies alive
DEFERRAL OF INTERNAL TAXATION
Deferral of internal taxation if certain conditions are fulfilled. Gains and returns accrue within the policy will not be taxed until surrenders are made or the contract is terminated
PROTECTION OF WEALTH
In certain cases, the policies will be protected against claims of third parties
SECURITY
In the case of Luxembourg and Ireland there are laws that super protect the policyholders, so their investments are outside the balance of the custodian bank and the insurer
CONFIDENTIALITY
There is no public information about the policies, so no one knows the content of the contracts
CHOICE
Of the portfolio manager, the custodian bank and the insurer. Everything is decided by the policyholder. The investor can maintain the asset manager or financial advisor.
FLEXIBILITY OF THE UNDERLYING ASSETS
In certain cases, the policy asset manager can choose non-traditional assets as private Equity, structured products, unlisted companies, Hedge funds, private debt, etc