Are you taking out a loan?
Credit protection insurance (CPI) is an effective solution for ensuring that your loan is fully or partially repaid in the event of your death or disability.
Security
Protect your loved ones by insuring an amount that will be repaid in the event of your death or disability.
Tax benefits
CPI offers income tax relief if you’re a Luxembourg resident or equivalent taxpayer.
Customisable
Choose the option to suit your situation and risk appetite.
How does credit protection
insurance work?
CPI is a form of decreasing term life insurance that insures all or some of the outstanding debt against the risk of death or disability. It is a secure solution as it covers the complete or partial repayment of your loan depending on the amount insured.
With your Relationship Manager you will establish:
- The amount to be insured;
- The term of the policy;
- The number of insured persons;
- The payment frequency.
Tax benefits
€672
The maximum annual tax relief amount is €672 per dependent person in the tax household.2
If you decide to pay your CPI via a single premium, the maximum tax relief threshold may be increased (or subject to an additional increase) to reflect your age and the composition of your household.
For example, by paying a single premium for their loan, a married couple (aged 34 and 35*) with a child who are Luxembourg resident taxpayers may increase the deduction of their insurance premium by up to €18,000.
Taxpayer + child: 7,200 + ((7,200 x 8%) x 5) = 7,200 + 2,880 = €10,080
Spouse: 6,000 + ((6,000 x 8%) x 4) = 6,000 + 1,920 = €7,920
* For taxpayers aged 31 and over, the increased limit for a single premium is 8% x number of years over 30 at the time the insurance policy is taken out.
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CPI is an optional feature which may nevertheless be requested by the bank as a condition for granting a loan, depending on the applicant’s individual circumstances.
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Thresholds cannot be combined with deduction thresholds for interest on personal loans.