Dividing life insurance into pension insurance and endowment insurance is done strictly for technical reasons related to the tax laws. As of January 1, 2016 pension insurance premiums are no longer tax deductible. Amounts paid out from the pension insurance policy are taxed. For endowment insurance policies, it is just the opposite: premiums are not deductible and payments made from the policies are not taxed.
Life insurance companies that operate in Sweden pay a capital gains tax on the assets they manage for the insured. In calculating the capital gains tax, a standardised method is used (capital basis multiplied by the average governmental lending rate during the calendar year immediately preceding the taxation year). The yield arrived at is taxed at 15 percent for pension insurance and 30 percent for endowment insurance.
For endowment insurance with a non-Swedish company, it is the insured and not the insurance company that pays this tax.
The Swedish non-life insurance companies pay corporation taxes that currently amount to 22 percent of the net from the insurance operations.
