A life insurance policy is a traditional choice and a common form of
capital investment. It provides a rate of guaranteed interest over the
term of the policy as well as offering opportunities for asset
protection, tax planning, and insolvency legislation. The parties to the
insurance contract are the insurance company and the policy holder. The
insurance company issues the policy in return for the payment of the
premium while the policy holder receives coverage for him- or herself
and/or other persons.
The insurance covers the life of the policy holder or another natural person. The beneficiaries are the persons designated by the policy holder who may claim the benefits in the insurance contract upon occurrence of the insured event.
It is also possible
to use a Liechtenstein life insurance policy as a credit instrument.
This flexibility allows the policy holder to utilize it in different
forms as capital investment and/or as a credit instrument. Each
capital-forming insurance is not only a savings but also a financing
instrument. If necessary, such capitalmay be used before maturity by
loaning or pledging.
For the assignment or pledge of life insurance claims to be valid, the assignment or pledge must be in writing and the policy must be handed over. This is thought to protect from precipitancy and for the preservation of evidence. Thus, the policy is basically just a document of evidence. However, there are certain forms that make the policy similar to a security. This applies, for example, to life insurance contracts containing a bearer clause according to which the insurance company may pay benefits to the bearer. In such case the insurance company acting in good faith is authorizedto consider any bearer entitled to the claim.
Since life insurance contracts are frequently effected for a long time period, Article 65 ICA grants a special right of cancellation to the policy holder who may cancel the life insurance contract if the premium has been paid for one year. The cancellation must be submitted in writing to theinsurance company four weeks prior to commencement of a new insurance period. If the policy holder does not wish to pay any further premium, the insurance company shall, upon request of the policy holder, be required to convert in whole or in part any life insurance policy for which premiums have been paid for at least three years into a fully paid-up policy. The insurance contract may provide that the surrender value be paid in lieu of the desired conversion if the insurance sum or annuity resulting from the conversion would exceed an agreed amount. Moreover, the insurance company must, upon request of the policy holder, repurchase in whole or in part any life insurance for which the insured event is certain to occur, if the premiums have been paid for a least three years.
Return from Asset Protection Privilege to Liechtenstein Life Insurance