Luxembourg life insurance gains popularity in France

Luxembourg life insurance has seen significant growth among French savers, with 16.4 billion euros deposited in 2025, according to the Association des Compagnies d'assurances du Luxembourg. This represents more than 53% of the total 31.1 billion euros deposited in Luxembourg that year.

Growth rate in Luxembourg outpaces that in France

While the amount is less than the 192.1 billion euros collected from French life insurance contracts, the growth rate in Luxembourg is higher. In 2025, the collection in France increased by 10% compared to 2024, while the collection in Luxembourg by French people rose by 20.3%. In 2024, the increase was already 58.1% compared to 2023.

Tax advantages not the main driver

The growth of Luxembourg life insurance is not attributed to tax advantages, as French tax laws apply to individuals who are fiscally resident in France. Philippe Crevel, economist and director of the Cercle de l'Épargne, clarifies that French life insurance already offers relatively advantageous taxation, especially after 8 years of holding, with a reduced tax rate on gains and a tax allowance of 4,600 euros.

Potential tax changes may affect Luxembourg insurance

However, the draft of the 2027 finance bill may restrict these tax advantages to French life insurances only, potentially increasing the taxation on Luxembourg life insurances if the measure passes.

Perceived security drives interest

The enthusiasm for Luxembourg life insurance is primarily linked to the perceived security of these contracts. Luxembourg insurers emphasize the "super-privilege" and the "security triangle." The super-privilege ensures that holders of contracts are considered first-line creditors in case of failure, prioritizing their reimbursement over other debts.

Security triangle protects assets

The security triangle involves independent depositary banks approved by the Luxembourg regulatory authority, the Commissariat aux assurances (CAA), which holds the assets of subscribers, protecting them in case of insurer failure.

Concerns about state intervention

This perceived security is linked to fears of a potential "bankruptcy of the State," exacerbated by the Sapin 2 Law from 2016, which allows the State to temporarily limit life insurance withdrawals during a financial crisis. However, Philippe Crevel argues that this measure is intended to prevent banking panic and does not imply direct state access to savings.

Lower entry barriers increase accessibility

The growth of Luxembourg life insurance has also been driven by democratization of the product. Previously, the entrance ticket was high, typically 250,000 euros, limiting access to wealthy individuals. However, recent offerings from online banks and fintechs have lowered the entry barrier.

More investment options in Luxembourg

Luxembourg life insurance also offers a broader range of investment options, with some contracts providing access to over 4,000 products, compared to around 600 in France. However, Philippe Crevel questions the justification for the enthusiasm, citing the case of FWU Life Insurance Lux, which was placed in liquidation in 2025, affecting 30,000 French contracts.

Reimbursements delayed, complaints filed

Reimbursements for affected savers were expected to begin in 2028, and some filed complaints for fraud. Despite the security features, Philippe Crevel notes that the scenario of a French state bankruptcy remains distant, and the security triangle may not fully protect French assets in Luxembourg in such a case.