Life Insurance
Most of us are very careful when insuring homes, cars, furniture, and other possessions. However, we sometimes forget to insure ourselves.
Financial safety net
We often forget that it is us as individuals who pay for the conditions we live under. Loss of assets is unfortunate, but it rarely hits as hard as the loss of working capacity or the death of a spouse.
Are your insurances properly arranged? When changes happen in your life, you should check if your insurance still matches your needs.
Send us an email at liv@liv.fo or call us at 31 11 11.
Life Insurance
With a life insurance, you insure your family financially if you suddenly pass away.
A life Insurance is therefore intended to help your closest family members get financially back on their feet should you pass away before reaching the age of 67.
The payout will be made to the next of kin unless another written agreement has been made with LÍV.
The payout is tax-free.
Beneficiary Designation
The beneficiary designation determines who has the right to the payout in the event of death.
In most insurance agreements, it is specified that the insurance amount related to death will be paid out to the next of kin, unless another written agreement has been made with LÍV.
Creditor Protection
Creditor Protection: The payout will be made according to the beneficiary designation, and the payout is creditor-protected. This means the amount will be paid to the named recipient, and creditors cannot make claims against the payout from LÍV.
An exception applies if you have designated the estate as the beneficiary. If the payout goes to the estate, the money is not creditor-protected.
Debt Insurance: In this case, there is no creditor protection. The payout will go towards the loan with the financial institution, and the value of the property will increase accordingly. Creditors can make claims against the estate before it is divided among the heirs.
The increased value of the property also affects the inheritance share that the surviving spouse must divide with the children, unless this is limited by a will or there is an option to retain the estate intact (without division).
Inheritance Tax
When heirs receive an inheritance, an inheritance tax is levied on the amount distributed. The tax is set based on how closely related the heir is to the deceased. The inheritance tax system is composed of four groups.
EXAMPLE: An inheritance of DKK 40,000, which is distributed to a cohabitant, is subject to an 11.5% tax. An inheritance distributed to companies, etc., is subject to a flat 10% inheritance tax. The above information is provided as guidance from the Inheritance Tax Act (Lov om arveafgift), which applies in the Faroe Islands.
More detailed regulations can be obtained by contacting the Probate Court, which manages inheritance taxes.
Which Insurance Is Right for You?
Everyone’s needs are different, and they can change multiple times throughout life.
Get an obligation-free conversation with us about your specific needs.
EXAMPLE 1
Monthly payment DKK 162,50
Insurance until age of 67 1/2
Payout in case of death
15-49 yrs
Dkk 500.000
50-54 yrs
Dkk 400.000
55-67 1/2 yrs
Dkk 300.000
Certain Critical Illnesses
Pay out in one Lump-Sum
DKK 125.000
EXAMPLE 2
Monthly payment DKK 262,50
Insurance until age of 67 1/2
Payout in case of death
15-49 yrs
Dkk 1.000.000
50-54 yrs
Dkk 800.000
55-67 1/2 yrs
Dkk 600.000
Certain Critical Illnesses
Pay out in one Lump-Sum
DKK 125.000
EXAMPLE 3
Monthly payment DKK 548,50
Insurance until age of 67 1/2
Payout in case of death
15-49 yrs
Dkk 750.000
50-54 yrs
Dkk 600.000
55-67 1/2yrs
Dkk 450.000
Certain Critical Illnesses
Pay out in one Lump-Sum
DKK125.000
Inability to work insurance
Annua Benefit
DKK 80.000
We are ready to help you
If you have questions or would like advice, you are welcome to contact us.
Send us an email on liv@liv.fo, call us at +298 31 11 11, or log in to the customer portal
Mítt LÍV and send us a message
