An attractive maturity benefit
Three levers for higher returns
Capital market dynamics are unpredictable. As an insurer, we have no influence over them, but we can create the conditions for clients to face the play of market forces well prepared, so that their portfolio holds its own over the long term.
Effective costs, meaning the total costs of an insurance product measured as the annual reduction in yield, are the key yardstick for comparison. According to a BaFin study, the most expensive quarter of the market for fund-linked and hybrid insurance most recently stood at 1.9% over a 30-year term, and individual products at more than 3% (BaFin, June 2026). For Liechtenstein Life Invest and Liechtenstein Life Pension, the insurance conditions provide that no acquisition costs are charged within the contract.
That is no coincidence. It is the result of a well-thought-out concept with three strong levers.
1. A broad fund universe
For many experts, ETFs are the first choice: a high degree of diversification, low costs and transparent index tracking. ETFs track indices passively and usually have a total expense ratio (TER) of 0.1 to 0.5%, considerably less than actively managed funds, whose TER is often between 1.0 and 2.0%. Active funds can add value above all in specialist segments (e.g. themes or sectors).
Liechtenstein Life consistently follows the value-for-money principle. ETF or active, what counts is the cost-benefit ratio for the client.
In addition, being based in Liechtenstein gives access to the EEA and Swiss fund markets, which allows particularly broad diversification.
2. A clear cost structure
The problem with conventional fund-linked policies is that acquisition and distribution costs reduce the savings portion and slow down wealth accumulation.
That is why the Liechtenstein Life product family relies on the innovative NAV model, which pays remuneration on an ongoing basis out of the contract value. This means that most of the contributions are invested right from the start, and the compound interest effect kicks in sooner.
A worked example shows the effect. With a monthly savings rate of €200 over 30 years and an assumed gross return of 6% a year, effective costs of 1.0% result in final capital of around €163,700, while effective costs of 2.5% result in around €126,200. The cost difference of 1.5 percentage points therefore amounts to around €37,500 (payment at the start of each month, costs as an annual reduction in yield, before taxes).
Over the long term, this benefits clients and intermediaries alike: continuous wealth accumulation means your income grows steadily, too.
3. Maximum flexibility
A direct brokerage account is regarded as a particularly flexible way to invest. At first glance, insurance seems to be at a disadvantage here.
However, the many options in a direct brokerage account come at a price. Contribution changes or top-ups often incur fees. Sales and fund switches are taxable.
Our pension insurance Liechtenstein Life Invest gives clients complete freedom: according to the fee table, top-ups, contribution changes and fund switches are free of charge. On request, annual rebalancing keeps the portfolio on course. If the course needs correcting, the investment strategy is changed. When the goal is in sight, the balance can be moved into lower-volatility funds with a shift to reduce the risks.
Cost control, targeted investment and room for adjustments, plus the tax advantages of a fund-linked policy: no flat-rate withholding tax (Abgeltungsteuer) during the accumulation phase and, for a payout after a term of at least twelve years and from age 62, only half of the gains are taxed (§ 20 (1) no. 6 sentence 2 EStG, the German Income Tax Act, for contracts from 2012). All of this potentially gives clients a return advantage and increases the likelihood of a maturity benefit that creates financial freedom in retirement.
The value of your investment can fluctuate.
Article published by Prosperity Solutions AG
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