Insurance

Net premium

By the Finances Indépendants editorial teamUpdated on 3 min readAlso known as: Prime nette, Invested premium

Contents
  1. What is the net premium?
  2. The 4.4% insurance premium tax
  3. The charges on top
  4. How to read a return honestly
  5. What can be negotiated
  6. Not to be confused with
  7. Further reading
  8. Frequently asked questions
4.4%
Insurance premium tax, except for the PLCI/VAPZFPS Finance2026
0%
Insurance premium tax on a PLCI/VAPZ premiumFPS Finance2026

What is the net premium?

The net premium is the amount actually invested in the contract, after everything deducted from your payment. It differs from the gross premium, which is the sum you pay in.

The gap between the two comes from three items: insurance premium tax, the broker's and insurer's entry charges, and any loadings for additional cover. The contract's return applies to the net premium, never to the gross premium.

The 4.4% insurance premium tax

The Belgian tax on insurance transactions is 4.4% of the premium paid for most individual life insurance contracts. It is deducted on entry and cannot be recovered.

The PLCI/VAPZ (free supplementary pension for the self-employed) is exempt, an advantage rarely highlighted in comparisons: for the same gross premium, a PLCI/VAPZ invests 4.4% more than a standard pension savings contract. That initial gap then compounds over the whole life of the contract.

The charges on top

Several layers of charges stack up, and they cannot be compared like for like: some are charged once, others every year.

  • Entry charges, deducted from each payment and expressed as a percentage of the premium.
  • Annual management charges, deducted from the accumulated value, so they weigh more as the capital grows.
  • Exit or surrender charges, depending on the contract and when it pays out.
  • Risk loadings, when the contract includes death or incapacity cover.

How to read a return honestly

An advertised rate generally applies to the net premium and before management charges. Two contracts showing the same rate can therefore produce noticeably different results depending on their loadings.

The only comparison that counts is the projected capital at maturity, for an identical gross premium, including all charges and exit taxation. Ask for this projection in writing: an insurer or broker can provide it, and a refusal is telling in itself.

For a pension contract, add the exit: a flat 10% for an IPC (individual pension commitment, EIP/IPT) or a POZ/CPTI (pension agreement for the self-employed), a notional annuity at your marginal rate for a PLCI/VAPZ, plus the NIHDI (INAMI/RIZIV) levy of 3.55% and the solidarity levy. The final net figure is what counts.

What can be negotiated

Entry charges are the item most often open to negotiation, especially on large premiums or a long-term relationship. Management charges less so, and insurance premium tax not at all.

On a contract funded for twenty or thirty years, a difference of one point in entry charges and a few tenths in management charges adds up to thousands of euros. That is a discussion to have before signing, not after.

Not to be confused with

The terms close to Net premium and what sets them apart.

Net premium and the gross premium
The gross premium is what you pay in, the net premium what is invested. The gap corresponds to insurance premium tax and entry charges.
Net premium and the net return
The net premium is an amount on entry. The net return is a rate after management charges and exit taxation. You need both to compare two contracts.

Further reading

Net premium: frequently asked questions

  • The amount actually invested in the contract after deductions: the 4.4% insurance premium tax, entry charges and any loadings. The return applies to this amount, not to the sum you pay in.

  • No, the PLCI/VAPZ is exempt. For the same gross premium, it therefore invests 4.4% more than a standard pension savings contract, and that gap compounds over the whole term.

  • Entry charges on each payment, annual management charges on the accumulated value, any exit charges, and risk loadings if the contract includes cover. Some are charged once, others every year.

  • By asking each provider for a projection of the capital at maturity, for an identical gross premium, including all charges and exit taxation. Comparing advertised rates tells you nothing.

  • Entry charges often are, especially on large premiums. Management charges less often, and insurance premium tax not at all, since it is set by law.

  • On a contract funded for twenty or thirty years, yes: the gap adds up to thousands of euros at maturity, because what is not deducted keeps compounding. That is a discussion to have before signing.

Official source

  1. FSMA. View (new tab)(Official source, accessed on 2026-09-19)