Advantages of Investment Funds
First, due to its pooling characteristics private insurance companies can invest in a vast number of investment funds thus allowing investors a dispersion of their capital and a limitation of risks through various styles of management, different strategies and different categories of assets. Such diversification provides greater protection from market risks.
Second, an investment fund comprises various stocks and shares offered by various issuers. This broad diversification of the underlying assets is an important additional factor which reduces investment risks. Such type of risk reduction is not possible within the management framework based on directly purchased shares or bonds.
Finally, investment funds are managed by financial management professionals who possess know-how, expertise and knowledge of financial markets, which is a necessity to secure good performance of investment funds.
Asset Transfer Tool
Under the terms of the Luxembourg life insurance contract the insurer promises the policyholder, in return for premium(s) payment , to pay to the beneficiary designated by such policyholder, a sum of money in the event of death of the insured, the value of which or the method of valorisation of which is established by a contract. The parties to the life insurance contract are the policyholder, the insured and the beneficiary. The insurance company bears the risk and undertakes to pay the sum due to the beneficiary in the event of death of the insured. The payment on the basis of the contract is linked to an uncertain event, which is a hazard lying within the sphere of the insured.