Unit-linked insurance products
Traditionally, life assurance companies offer guaranteed return products, where premiums are managed in the insurance company’s general fund or in that of the mother company.
In addition, Luxembourg firms offer a wide range of so called “unit linked” products that are based on one of the following:
- External investment funds, managed by experienced asset managers;
- internal collective funds, which operate like undertakings for collective investment in transferable securities (UCITS) and which allow mandated collective management tailored to the different risk profiles of investors;
- internal dedicated funds that permit discretionary, mandated management that takes the subscriber’s personal objectives into account. Several dedicated funds can be grouped within the same life assurance contract.
The possibility of diversifying assets held in a life assurance contract increases in proportion to the amount invested and the type of funds chosen. Hence, the range of potential assets widens from national or international equity, money market and bond funds, through alternative funds and structured products, and goes as far as integrating portfolios of listed and non-listed securities.
The management strategy can be changed at any moment throughout the life of the contract.