Managing your capital

Choosing between an investment fund and a branch 23 product

Funds and Branch 23 life insurance policies overlap in some aspects. However, these investment products also differ in many areas. What solution suits you best?

A comparison: investing in funds

An investment fund is a basket of one or more investment products. A fund may, for example, be a selection of stocks or corporate bonds, or a combination of the two. However, a fund may also consist of other components, such as cash, government bonds, derivatives and so on. And there are many different types of fund.


Investing in a fund entails a little more risk than a traditional savings account or a term account. The choice of the funds you invest in will therefore depend on your specific needs, your risk tolerance, your knowledge of financial products and your investment horizon. This not only applies if you invest directly in a fund, but also if you do so via Branch 23 life insurance. Investing in a Branch 23 life insurance policy therefore broadly corresponds to investing in a fund. However, there are also significant differences.

Significant differences

A Branch 23 product is linked to life insurance


With a life insurance policy, the insurer pays out a capital sum or interest agreed in advance, in exchange for premium payments.


The policyholder holds all the rights to the contract: he signs the contract and nominates the beneficiaries who will receive the capital if he dies. He can also change the beneficiaries during the term, or draw (part of) the capital during that period. A Branch 23 product is therefore very different from a fund in this respect. Do you want a fund to be transferred to a specific person if you die? In that case, you have to provide for it in your will.


The terminology used is different as well: with a life insurance policy, a sum invested is called a ‘premium’, the capital is ‘the reserve’ and to draw money during the term is to ‘surrender’ it.

Different tax treatment


There are marked differences between the taxation of Branch 23 life insurance and of funds.


  • If you invest directly in a fund, you do not pay tax on the sum invested. With a Branch 23 life insurance policy, 2% tax is levied on every premium paid.
  • If you sell (part of) your investment in a capitalisation fund (the most common formula), tax of 1.32% is levied (up to a maximum of 4,000 euros). In the case of distribution funds, purchase or sale on the secondary market etc. different tax rules apply.
  • When you surrender the capital of a Branch 23 product no tax is levied unless the contract provides for a guaranteed return. In that case, a surrender within the first 8 years of the contract is subject to withholding tax on the capital gain.
Branch 23 as an instrument for transferring assets


Unlike a classic fund, a Branch 23 life insurance offers the opportunity to plan the transfer of your assets to your heirs, just as you would want it. You can choose who receives the capital by nominating one or more beneficiaries. This allows you to allocate your assets to different people, such as your grandchildren, at no extra cost.

Is a Branch 23 investment something for you?