Question 1

What is Outstanding Balance Insurance (assurance solde restant dû) in Luxembourg?

Accepted Answer

OBI is life insurance tied to your mortgage. If you die before the loan is repaid, it pays off the outstanding balance, protecting your family from inheriting the debt. Banks in Luxembourg typically require it when granting a mortgage.

Question 2

Is Outstanding Balance Insurance tax-deductible in Luxembourg?

Accepted Answer

Eligible OBI premiums may be deducted as special expenses in Luxembourg. The special age-based increase applies only to an eligible single-premium decreasing-term death policy securing a qualifying loan. This calculator estimates the eligible premium, not the final tax saving.

Question 3

How is OBI calculated in Luxembourg?

Accepted Answer

Premiums depend on the insured amount (your outstanding loan balance), the loan term, your age, and health factors. Cover decreases over time to match the declining balance. Premiums are paid monthly or annually and can be deducted from taxable income.

Question 4

Do I need OBI if my partner is also on the mortgage?

Accepted Answer

When two people share a mortgage, you can take out joint OBI covering both lives, or separate policies for each. The level of cover for each person (e.g. 50/50 or 100/100) affects the premium. Your lender may require a minimum combined cover level.

Outstanding Balance Insurance Tax Deduction Calculator