Investment Plans

Base plan details are available here. Always refer to the plan terms and condition for full plan details.

Sterling Investment Account

Available from 6 April 2005 to 31 December 2012The SIA is an investment wrapper for collective investments.

Eligibility

  • 18 years attained to 79 years attained. 
  • Must be UK resident.

Minimum Investment

  • £5,000 single payment (£1,000 additional investments).
  • £250 regular monthly payments/£50pm if single payment invested at same time (minimum increase £25pm).

Charges

  • Initial charge
  • Account charge 
  • Fund expenses 
  • Fund Manager charges

Investment Options

A range of funds are available to choose from.

Taxation

Income tax 

All income generated by a fund, whether paid as income, reinvested in a fund or accumulated within a fund, is subject to income tax. 

Capital gains tax 

A capital gains tax liability may arise if there is a gain from selling investments in the account.

Sterling Investment Bond

Available from 6 April 2005 to 31 December 2012.A single premium, non-qualifying, whole of life plan made up of 1,000 identical individual contracts.

Eligibility

  • Life assured minimum age 3 months to 79 years attained. 
  • Must be UK resident. 

Versions

Standard

High Allocation

Higher initial allocation rate. There are exit penalties. Not available with DGTs or Loan Plan Trusts. 

No Exit Penalty 

Lower initial allocation rate. No exit penalties. 

Minimum Investment

  • £5,000 (£1,000 for additional investments) 
  • £10,000 for Distribution Fund and Distribution 2 Fund 
  • £50,000 for Discounted Gift Trusts (DGTs) 

Charges

  • Initial charge 5% 
  • Yearly management charge 1% 
  • Fund expenses 
  • Fund Manager charges 
  • Establishment fee (High Allocation version) 
  • Exit penalties (not No Exit Penalty version)

Investment Options

A range of funds are available to choose from.

Taxation & Trusts

  • The Sterling Investment Bond is non-qualifying for UK tax purposes, meaning that tax may be due on any withdrawals or surrender (cash-in). 
  • If the gain from a withdrawal or surrender takes income into the higher rate tax threshold in that tax year, there may be a liability to higher rate tax. 
  • The plan may be written in trust. 

Sterling Individual Savings Account (ISA)

Available from 6 April 2005 to 31 December 2012.

The Sterling ISA is an investment wrapper for collective investments that has favourable tax status.

Eligibility

  • 18 years attained to 79 years attained. 
  • Must be UK resident. 

Minimum Investment 

  • £3,000 single payment (£1,000 additional investments) 
  • £100 regular monthly payments/£50pm if single payment invested at same time. (Minimum increase £25pm) 

Charges

  • Initial charge 
  • Account charge 
  • Fund expenses 
  • Fund Manager charges 

Investment Options 

A range of funds are available to choose from. 

Taxation

Income tax 

ISAs are free of income tax, except for tax paid at source on UK dividends and any foreign withholding tax, which can’t be reclaimed. 

Capital gains tax 

ISAs are free of capital gains tax.

Policy charges and Expense Deductions

Life plans 
We don’t currently make a charge for switching funds. If in future we decide to charge, we’ll tell you.

10/15 Plus Plan (CE)

Availability

1st February 1978 to Early 1985 (Children's Plans sold from 1980).

Plan Type

Whole of Life contract to provide life assurance protection and medium term investment benefits. Written on Single Life only basis.

Term

Minimum 10 years, Maximum 15 years, did not have to be selected at commencement.

Benefits

Proceeds are payable upon death or encashment, death benefit is sum assured or cash value whichever is greater. Life Managed Fund only, no fund switch option.

Charges

  • Unit Allocation, First 10 Years @ 90% Accumulation Units, thereafter 100% into Accumulation Units with an annual management charge of ¾%. 
  • On Monthly paid cases, 25p per month gross charge. 
  • Stopping Contributions, if the fund value is greater than £1000 plan becomes "Paid up", if less than £1000 the plan is surrendered. 
  • Surrender Charges upon encashment / paid up, full bid value of units less surrender charge:

 

 
Policy year in respect of which last total premium was paid
Percentage of basic gross premium paid from commencement to end of year in which last total premium was paid*
1

70%
2 34%
3

22%
4 16%
5

12%
6 9%
 7 6% 
 8  4%
 9  2%
 10  0%

Policy can be surrendered at any time after 10th anniversary without penalty.

Options

  • Paid Up, Cash - in value must exceed £1000, Sum assured becomes cash in value
    Can be left paid-up even after 15 years
  • Top Up Plan - Was available subject to a minimum premium of £7.50 net per month or £90.00 per annum
  • Children's Plan - If policy issued under T3 Trust, the Nominated Child may take out a whole life or endowment plan for up to £50,000 on 10th/15th anniversary (if aged under 16 on 10th anniversary : not available until 15th)

Note: From 1/7/92 the Adaptable Endowment Plan, Savers version, no longer available - new Maximum Investment Plan available instead.

Taxation and trusts

  • Proceeds are tax free after 10 years
  • The policy can be written in trust

Adaptable Investment Plan (DCS/DCL)

Availability

January 1985 to June 1988.

Plan Type

A Ten year qualifying endowment plan to provide Medium/long term savings, can continue after ten years. Written as either Single Life (DCS) or Joint Life Second Death (DCL).

There is a 'non-qualifying' version of the Adaptable Investment Plan, the differences between the non-qualifying version compared to the qualifying version are:

  • 1. The sum assured is equal to one annualised initial contribution, e.g. if the monthly contribution is £50, the sum assured on the non qualifying version would be £600 as opposed to £4,500 on the qualifying version.
  • 2. The planholder need not complete any health or occupation questions on the application form, unless he also wishes to add Waiver of Contribution benefit. This facility is not open to anyone in very poor health with severely limited life expectancy.
  • 3. Whilst proceeds of the plan will always be free of basic rate tax, there may be a liability to higher rate tax if applicable. This applies whenever the encashment takes place.

Benefits 

Proceeds payable upon death or encashment, death benefit is sum assured or cash value whichever is greater. Planholder may link the plan to a maximum of four funds, funds can be switched at any time subject to a charge.

Charges

  • Unit Allocation: Monthly Paid Cases - Months 1-3, Nil allocation, remainder of Years 1 to 5, 100% plus bonus allocation equal to 3 months at end of year 5. Years 6-10, 102% Allocation
    Annually Paid Cases - Year 1, 75% Allocation, Years 2-5, 100% plus bonus allocation equal to 25% of the first contribution at end of year 5 From years 6-10, 102% Allocation 
  • Annual Management Charge of ¾% per year which is reinvested back into units, therefore in effect there is no charge. Unit Deductions will be taken to cover the Monthly expense charge, linked to Average Weekly Earnings (AWE) and Mortality costs - based on difference between cash value and sum assured. 
  • Stopping Contributions, if value is less than £500 the plan is surrendered if it is greater than £500 plan is Paid - up 

Options

  • At Maturity Date:
    1. Continue contributions for a further ten years, at which time all options will again be available (subject to any option being taken that will result in the term being extended e.g. Partial Surrender, Increases).
    2. Allow the Plan to mature. The customer will receive the bid value of the units then allocated to the Plan, free of any income tax liability. 
    3. Exercise the Regular Withdrawal Option, (this can only be taken at Maturity). 
  • On exercising this option the Plan becomes a Whole Life Plan, the Sum Assured reduces to £50 (or cash value of Plan if greater) and the contribution reduces to £1 p.a. 
  • Once the Plan has been changed to this state the customer can then take tax free regular withdrawals and/or one off Partial Surrenders. Regular withdrawals can be taken either monthly, quarterly, 1/2 yearly or annually. The minimum withdrawal is £250.00 p.a. Partial Surrenders can be taken at anytime. 
  • Increases - on plans commencing after February 1985 the customer may choose to increase the policy at any time (subject to underwriting). The term is extended to 10 years from the date of the increase. 
  • Indexation - Each year, the customer may increase contributions in line with the AWE. The term is extended by one year each time Indexation is applied. 
  • Early Cash Facility - A minimum of £250, and a maximum of £1000 or 10% of the sum assured, whichever is the greater, without the need for a Declaration of Health (N.B. both figures are cumulative). It is possible to take in excess of these figures, but a clean Declaration of Health is required. In both cases an amount equal to one contribution must be left in the fund, (one being monthly or annual). 
  • Paid - Up Limit - Value must exceed £500.
  • Stop/Start Facility - Contributions stopped for up to 12 months whilst full life cover maintained. On Reinstatement term is extended or outstanding contributions paid. Customer can request Stop/Start, or Stop/Start can be exercised due to non-payment of contributions. To exercise Stop/Start, the fund value must be equal to, or in excess of, 1/4 of the current annual premium. If plan has remained in Stop/Start for 13 months and is not reinstated then; If value less than £500 = Surrender, If value more than £500 = Paid-Up. Stop/Start cannot be used if there has been a requested Increase within the last 12 months ( i.e. NOT Indexation).

Additional Benefits

Waiver Of Contribution Benefit - Contributions will be waived if the planholder is totally disabled due to sickness or accident for more than three months and is unable to earn his living from his usual occupation or one which is reasonably suitable.

Taxation and Trusts

  • Total Encashment - On AIPs with a 10 year term, the proceeds are tax free after 7½ years (qualifying version only), providing contributions have remained level, and the policy has not previously been made paid-up. (There is a potential liability to higher rate tax if surrendered before this point). If Indexation is applied, the proceeds will be tax free at the ¾ point of the new term, or the 10th anniversary of the policy, whichever is the sooner. If any option has been exercised resulting in a term extension, the proceeds will be tax free at the ¾ point of the new term, or the 10th anniversary of the Policy, whichever is the sooner. 
  • Partial Encashment - The taxation rules are the same as for `total encashment'.
  • Regular Withdrawals - AIPs issued on or before 24 February 1988 contain a Regular Withdrawal facility. Tax free Regular Withdrawals can be taken from the plan at any time after the later of 10 years from the commencement of the plan or 10 years from the exercise of any option within the plan. Therefore, if a customer takes a partial encashment, applies Indexation or an increase in contribution (i.e. exercises an option) then 10 years must elapse before he is able to take tax free regular withdrawals.
    Non-Qualifying AIP's always have a potential higher rate tax liability upon encashment. 
  • The policy can be written in trust. 

Distribution Bond (DJ)

Available from 22 May 1990 - 24 September 2004.

Non qualifying Whole of life contract to provide medium to long term investment with minimal life cover as long as the bond is in force. Written Joint life joint ownership, Joint life single ownership and Single life (split into 100 identical mini - policies).

Benefits

  • Proceeds payable upon death or encashment, the death benefit of the bond will be the greater of 101% of the bid value of the units allocated at the date of notification of death and the sum assured that will be set equal to the original investment. 
  • The sum assured will be increased by the amount of any subsequent top ups paid into the bond and will be reduced by the amount of any withdrawals or partial surrenders.  As a result, the sum assured on the policy may vary over time. 
  • The Distribution Capital Fund, which is the only Fund available. 

Charges

  • Annual Management Charges ~ 1.375% AMC 
  • Unit Allocation 100% 
  • There are no surrender charges 

How the bond works

Investment ‘income’ will accrue to the Distribution Capital Fund as and when it arises increasing the value of units. Twice a year, on the Distribution Dates (1 March and 1 September) the ‘income’ deemed by Zurich to have accrued will be switched into, and will purchase units in, the Distribution Cash Fund.  This Fund in turn will earn interest which will increase the value of units.

The Bond can be set up to take regular cash withdrawals, starting on either of the distribution dates, either as:

  • The full amount distributed from the Distribution Capital Fund to the Distribution Cash Fund. The earliest this can take effect is the first distribution date following the first anniversary of the commencement of the Bond. 
  • A fixed percentage per annum of the original investment. 
  • A level cash amount per annum. 

The earliest either of these two options can take effect is 12 months after the commencement of the Bond.

We recommend a maximum of 5% pa. Payments can be monthly, quarterly, half yearly or yearly. If at any point there are insufficient Distribution Cash Fund units to support a distribution or regular withdrawal, the excess will be realised by surrendering units from the Distribution Capital Fund.  It is important to realise that if the level of the withdrawal exceeds the level of distributions and the rate at which units in the Distribution Capital Fund are being encashed is not matched by growth in their value, the total value of the Bond will fall, eroding the capital.

If no instructions are received, distributions will be re-invested automatically in the Distribution Capital Fund to purchase further units. The client can request the Cash Withdrawal Plan to be set up (or cancelled) at a later date, if required, by sending their written instructions to Client Servicing.

Options

  • There is a facility to "top up" the original investment. 
  • Partial Surrenders available at any time.

Taxation & Trusts

The bond is a non - qualifying life assurance policy. Any gain on death/encashment or any withdrawals exceeding 5% in a policy year will be potentially liable to higher rate tax. If a Gain is incurred as a result of Surrender this will be added to their total taxable income for the Tax year during which surrender took place.

If this figure lifts them into the Higher Rate tax bracket, they will be potentially liable to higher rate tax, less basic tax, on the amount that takes them over the higher rate tax bracket. If the client is a Basic rate tax payer it may be possible to 'Top Slice'. 

A Bondholder can withdraw 5% of the original investment of a Bond each policy year, free of all immediate taxes.  (However, all withdrawals are taken into account when calculating the final gain.)  This allowance is cumulative.

The policy can be written in trust. 

Flexible Investment Plan (AD)

Selling Dates - 1 April 1971 To 31 July 1972

Whole life cover with high investment benefits written on single life basis only. No set term as policy is for whole of life.

Benefits 

  • Proceeds Payable upon death or encashment
  • Death Benefit, sum assured or cash value, whichever is the greater

Funds Available 

100% to either Managed, Property or Equity,

Or 1/2 Property, 1/2 Equity,

or 2/3 Property,1/3 Equity,

or 1/3 Property : 2/3 Equity

Fund Switches

On annually paid plans only, fund switching is allowed at any time. 

Switch charges are as follows:

Value of Fund Switched:

  • up to £999 1% of bid value of units switched 
  • £1000 to £4999 1/2% of bid value of units switched 
  • £5000 to £9999 1/4% of bid value of units switched 
  • £10,000 + free, unless a previous switch has been made in the same policy year, in which case the charge is 1/4% 

Unit Allocation   

 All to accumulation units;

  • Year 1 75%    
  • Year 2 Varies by age, Minimum 75% (65-70 NB at commencement), Maximum 90% (to 40 NB at commencement) 
  • Year 3 100%    

Charges

  • If annual gross contribution is less than £500 or the monthly figure is less than £50, a £6 pa/50p pm gross charge is added. 
  • Fund Management Charge ~ 3/8% per year of the whole fund value.
  • There are no surrender charges 

Options

  • There is no facility to increase
  • Regular Withdrawals are available after ten years, provided premium was reduced to £1.00 pa before 25.2.88 these may be taken on a yearly or half yearly basis 
  • Partial Surrenders are available after ten years if premiums reduced by half and paid annually after 25.2.88  OR if premium reduced to £1.00 pa before 25.2.88 
  • Paid Up Limit ~ Minimum of one years premium paid 

 

Additional Benefits

Guarantee against loss for which an additional premium of 1% is payable, if plan is maintained for 10 years, the proceeds on cashing in the plan within one month after the end of the 10 years will not be less than the total premium contributions made during the ten years. 

Taxation and Trusts

  • Proceeds are tax free after ten years.  If paid-up before this point, there is a potential liability to higher rate tax. 
  • The policy can be written in trust.

Growth Savings Plan (AC)

Selling Dates - 1st May 1971 to 30th June 1975.

Provides life cover with primary emphasis on its investment benefits as a Term Single Life Whole of life with a guarantee date.

Benefits

  • Proceeds Payable Upon death or encashment, Sum assured or cash value whichever is greatest.
  • Only Managed fund available therefore there is no facility to switch to funds. 
  • Unit Allocation, units allocated during first two years are Capital units; thereafter Accumulation units. The amount of unit allocation varies between 80% (65 ANB at commencement) and 95% (up to 40 ANB at commencement) depending on age. 

Charges

  • Service Premium ~ Only on Monthly paid plans, commencing 1/1/75 or after, never more than 25p per month. 
  • Fund Management Charges ~ 3/8% or 1/2% per year of the whole fund depending on which generation applies to the fund. 
  • Stopping Contributions ~ if value is less than £250 the plan is surrendered if more than £250 it can be paid-up. 
  • Surrender Charges ~ A percentage of the capital units are deducted if the policy is surrendered before the guarantee date.  The percentage decreases in line with the number of years to run. 

Options

  • There is no facility to increase, to set up regular withdrawals nor to take partial surrenders.
  • Paid Up Limit ~ Cash - in Value must exceed £250, Sum Assured becomes Cash-in Value. 

Additional Benefits

  • Accidental Death Benefit ~ In the event of death by accident before age 65, an amount equal to the sum assured will be paid out in addition to the normal death benefit.
  • Family Income Benefit (FIB) ~ In the event of the life assured dying within 20 years or before their 65th birthday if this is sooner, a monthly income will be paid through to the end of 20 years, or the policy anniversary when the life assured would have been 65.
    (NB  The monthly income is tax free and is paid in addition to the Death Benefit.  The monthly income may be commuted for a single cash sum payable at death.) 
  • Renewable Convertible Term Benefit (RCT) ~ In the event of the death of the life assured within the 10 year period an additional sum will be payable over and above the death benefit on the basic plan.  This benefit can be converted to a Pension, Whole of Life or a long term Endowment, or can be renewed for a further 10 years. 

Taxation and Trusts

  • Higher rate tax may apply if client cashes-in or makes policy "paid-up" before its tenth anniversary. 
  • The policy can be written in trust.

Growth Savings Plan (CC)

Selling Dates - 1st June 1975 to 1984.

Provides life cover with investment benefits written to age 60 on single life only basis.

Benefits

  • Proceeds payable upon death or encashment of Sum assured or cash value whichever is the greatest.
  • Only Managed fund available therefore there is no facility to switch to funds.
  • Unit Allocation ~ allocated during the first 3 years are Capital units; thereafter Accumulation units are allocated.  The amount of unit allocation varies from 80% to 95% depending on the ANB of the applicant at time of commencement.

Charges

  • Service Premium ~ Only on monthly paid plans and never more than 25p per month 
  • Fund Management Charges ~ ¾ per year for the whole fund 
  • Stopping Contributions ~ If cash - in value is less than £500, the plan is surrendered, if cash - in value more than £500 the plan can be paid - up 
  • Surrender Charges ~ A percentage of the capital units are deducted if the policy is surrendered before the guarantee date. The percentage decreases in line with the number of years to run

Options

  • Bond Investment ~ At the maturity date the planholder may invest the cash - in value into a single premium investment bond.  The planholder may do so on the basis of purchasing units at the bid price rather than the offer price, without incurring any administrative charges
  • There is no facility to increase, set up regular withdrawals nor take partial surrenders

Additional Benefits

  • Accidental Death Benefit ~ In the event of death by accident before age 65, an amount equal to the sum assured will be paid out in addition to the normal death benefit.
  • Family Income Benefit (FIB) ~ In the event of the life assured dying within 20 years or before their 65th birthday if this is sooner, a monthly income will be paid through to the end of 20 years, or the policy anniversary when the life assured would have been 65.
    (NB  The monthly income is tax free, and is paid in addition to the Death Benefit.  The monthly income may be commuted for a single cash sum payable at death.) 
  • Renewable Convertible Term Benefit (RCT) ~ In the event of the death of the life assured within the 10 year period an additional sum will be payable over and above the death benefit on the basic plan.  This benefit can be converted to a Pension, Whole of Life or a long term Endowment, or can be renewed for a further 10 years.

Taxation and Trusts

  • Higher rate tax may apply if client cashes-in or makes policy "paid-up" before its tenth anniversary. 
  • The policy can be written in trust.
 

Guaranteed Equity Bond - DJ (E)

Available 16 July 1993 to 30 April 2013 Now closed.

The Zurich Guarantee FTSE 100% fund was closed on 30 April 2013 and all Guaranteed Equity Bonds surrendered.

Whole life (100 mini - policies), Single Premium Life Assurance Contract to provide medium to long term growth, with growth linked to the FTSE 100 Index.

On each set date a proportion of the growth in the FTSE 100 index was declared which was applied to the unit price at the next set date.  This proportion reflected the cost of providing the guarantee and varied in the light of factors such as interest rates, market conditions etc. from one quarter to the next.  The proportion of any FTSE 100 growth for each quarter was declared as a percentage and is called the Gearing.

Death Benefit

Original investment or bid value of units (at date of notification of date of death), whichever is the greater, less any previous surrenders or withdrawals.

Funds Available

The Guaranteed Equity Bond Cash Units were automatically switched into the Guaranteed Equity Bond FTSE 100 Units on the set date free of any charge.

Set Dates

The set dates were the 3rd working Friday in September, December, March and June. The policy shared in a proportion of the FTSE 100 index from the point when the Guaranteed Equity Bond Cash Units were switched into Guaranteed Equity Bond FTSE 100 Units.

Unit Allocation 

100%, a 5% bid\offer spread only applies to the Guaranteed Equity Bond Cash Units.

Charges

  • Annual Management Charge ¾% fund management charge per annum. 
  • There are no surrender charges as long as the policy is surrendered on a set date.  If not then a surrender penalty will be incurred.

Options

  • There is no facility to "top up" the original investment 
  • Cash withdrawals may be set up at any time on a yearly, half yearly, quarterly basis and are only available on the set date.  They must commence at least one year after the commencement date.
    Withdrawals may be paid as a:
    1. level cash amount
    2. increasing cash amount
    3. fixed percentage of fund value 
  • Partial Surrenders available on set dates only.  If not a surrender penalty will be incurred. 

Taxation and Trusts

  • Taxation, the bond is a non - qualifying life assurance policy. Any gain on death/encashment or any withdrawals exceeding 5% in a policy year will be potentially liable to higher rate tax.
    If a Gain is incurred as a result of Surrender this will be added to their total taxable income for the Tax year during which surrender took place.
    If this figure lifts them into the Higher Rate tax bracket, they will be potentially liable to higher rate tax, less basic tax, on the amount that takes them over the higher rate tax bracket.
    If the client is a Basic rate tax payer it may be possible to 'Top Slice'.
  • Trusts, the policy is not normally written in trust. 

Guaranteed Income Bond (DJ[G])

Available 1 December 1990. A Single premium, non - qualifying life assurance policy, to provide a regular guaranteed income, and repay the original investment at the end of the 5 year term. 

The plan consists of a series of single premium endowments. Each endowment matured in turn to provide the income payments and the last endowment matures with a value equal to the original investment at the end of the term.  (Each maturity value is a guaranteed amount).

Income Payments, paid either annually on the policy anniversary, or monthly.
Annual plans  =  6 endowments (5 income payments + 1 for original investment).
Monthly plans =  61 endowments (60 income payments + 1 for original investment).
The last endowment matures at the end of the 5 years.

Written as Single life or joint life second death could not be written in trust. Death Benefit = Original investment. There are no surrender charges, however, early surrender values are not guaranteed. There is no facility to increase.

Taxation

The Guaranteed Income Bond is a non - qualifying life assurance policy. 

Each income endowment matures with a nominal gain only (£12.00 for an annual case and £1 for a monthly case). This gain is liable to higher rate tax but not basic rate.

On the guarantee date, the last endowment policy matures with a value equal to the original investment.  The gain realised is the sum of all the income payments received, less the nominal £12.00 per annum gains already realised.

The early surrender value will be a percentage of the original investment and cannot be guaranteed.
There will be a liability to higher rate tax if the surrender value, when added to any income payments received less the £12 per annum gains already realised, totals more than the original investment.
There is no basic rate tax liability.
On Death the original investment is returned on the death of a single life assured or on the second death in joint life cases. The gain is the sum of any income payments received, less the nominal £12 per annum gains already realised.

Top Slicing, any gain will attract top - slicing relief.

Investment Bonds (AF, AG, AH, AJ)

Available 1 May 1971 to 21 May 1990.

A Non qualifying Whole of life contract to provide medium to long term investment with minimal life cover as long as the bond is in force. Written Joint life joint ownership, Joint life single ownership and Single life.

Benefits

  • Proceeds payable : Upon death or encashment, death benefit between 101% and 250% of cash - in value at death, dependent on the age of the life assured at death and the original rating factor. The death benefit is calculated based on the bid value of the units allocated at the date of notification of death 
  • Funds Available, Managed, Property, Fixed Interest Deposit, Gilt Edged, Equity, Overseas Earnings, American Equity, American Managed, American Property, Far East, European, High Income 
  • Fund Switches, if 1st switch is from Fixed Interest there is no charge, on other switches normally 1/2% of value of units 

Charges

  • Annual Charges
    Issued up to 6/4/72, 3/8% unless subsequently switched to "new fund"
    Issued between 6/4/72 and 1/1/76: 1/2% unless subsequently switched to "new fund"
    Issued after 1/1/76:  3/4% 
  • Unit Allocation, 100% of original investment allocated to chosen fund 
  • No Surrender Charges 

Options

  • Regular Withdrawals
    Cash withdrawals may be set up at any time on a yearly, half yearly, quarterly or monthly basis provided minimum left of £250. 
  • Partial Surrenders ~ Available at any time provided minimum left of £250 

Taxation & Trusts

  • The Investment Bond is a non-qualifying, life assurance policy. If a gain is incurred as a result of surrender this will be added to their total taxable income for the tax year during which surrender took place.  If this figure lifts them into the higher rate tax bracket, they will be potentially liable to higher rate tax, less basic rate tax, on the amount that takes them over the higher rate tax bracket.
    If the Client is a basic rate tax payer it may be possible to 'Top Slice'. 
  • The policy can be written in trust. 

Investment Bond (DJ)

Available from 22 May 1990 - 20 January 2001.

A non qualifying Whole of life contract to provide medium to long term investment with minimal life cover as long as the bond is in force. Written Joint life joint ownership, Joint life single ownership and Single life (split into 100 identical mini - policies).

Benefits

Proceeds payable upon death or encashment, the death benefit of the bond will be the greater of 101% of the bid value of the units allocated at the date of notification of death and the sum assured that will be set equal to the original investment. The sum assured will be increased by the amount  of any subsequent top ups paid into the bond and will be reduced by the amount of any withdrawals or partial surrenders.  As a result, the sum assured on the policy may vary over time.

Charges

  • 5% bid offer spread. 
  • Annual Management Charges ~ Bonds issued prior to 11 October 1991, 1.25% AMC, Bonds issued on or after 11 October 1991, 1% AMC for High Income fund, 1.25% AMC for the remaining  funds managed by Threadneedle.  
  • Unit Allocation 100%, however if the bond investment had been made as a result of another Zurich Lump Sum product being encashed within the previous 12 months unit allocation will be 103%. 
  • There are no surrender charges. 
  • Some of the funds have an extra yearly management charge. 
  • Additional fund expenses will apply depending on which funds are chosen. 

Funds Available

A range of funds are available from which a maximum of 12 funds can be selected at any time.

We don’t currently make a charge for switching funds. If in future we decide to charge, we’ll tell you.  

Options

  • There is a facility to "top up" the original investment. 
  • Cash withdrawals may be set up at any time on a yearly, half yearly, quarterly or monthly basis.
  • Withdrawals may be paid as a:
    1. level cash amount
    2. increasing cash amount
    3. fixed percentage of fund value 
  • Partial Surrenders available at any time

Additional Benefits

Loyalty bonus - Certain versions of the bond provide the investor with an extra allocation of units if the bond is retained for a specified period of time. 

Taxation & Trusts

  • The bond is a non - qualifying life assurance policy. Any gain on death/encashment or any withdrawals exceeding 5% in a policy year will be potentially liable to higher rate tax. If a Gain is incurred as a result of Surrender this will be added to their total taxable income for the Tax year during which surrender took place.
    If this figure lifts them into the Higher Rate tax bracket, they will be potentially liable to higher rate tax, less basic tax, on the amount that takes them over the higher rate tax bracket.
    If the client is a Basic rate tax payer it may be possible to 'Top Slice'. 
    A Bondholder can withdraw 5% of the original investment of a Bond each policy year, free of all immediate taxes.  (However, all withdrawals are taken into account when calculating the final gain.)  This allowance is cumulative. 
  • Trusts - the policy can be written in trust
 

 

 

Lifetime Income Plan (ALA, ALB)

Sold between November 1974 to August 1979.

  • Type of Plan Annuity. Plan provides guaranteed lifetime income and a deferred income written on 
  • Single or Joint Life Second Death 
  • Age Limit ~ Minimum age 55,  Maximum age 85 
  • Lump sum investment of Minimum £1000 , No Maximum 
  • Purpose ~ Immediate Annuity - for a lump sum at commencement this provides a guaranteed lifetime income, and a Deferred Annuity - available on request or on the client's 85th birthday, or at the 10th anniversary if the client was age 76 or over at commencement.
    (Deferred Annuity on Client's 85th birthday: if Joint Life, use younger birthday, even if Life Assured is deceased.)

Options (At deferred annuity)

  • Increase in income provides an extra payment in addition to the immediate annuity. 
  • Cash lump sum provides a surrender value, however immediate annuity payments will continue. 
  • Postpone the deferred annuity (postpone option selection to a later date).
    (It is only possible to take one of these options) 

Taxation

  • Immediate and deferred annuity payments are split into two elements: capital and interest elements, these are both subject to tax unless an application for exemption from income tax on the capital element of a purchased life annuity is received. If this form is received the interest payment only is subject to tax. 
  • The cash lump sum is subject to basic rate and higher rate tax. 
  • If the client does not pay any tax, an R85 form should be completed so that annuity payments are paid gross. 

Maximum Investment Plan (CS, CSL)

Sold 4 September 1979 to April 1985.

A 10 year qualifying unit-linked endowment plan, to provide investment benefits over a 10 year period with an option at Maturity to continue for a further 10 years. Could be written as Single Life (CS), or Joint Life Second Death (CSL).

There are 2 options available on joint life second death plans:

a) Joint Life, Single Ownership
Here there are two lives assured, only one of whom is the policy owner. The plan continues until the death of the last survivor. If the owner dies first, ownership passes to the executors or administrators of his/her estate. If the other life assured dies first, the plan continues, in effect, on a single life, single ownership basis.

b) Joint Life, Joint Ownership
Here there are two lives assured who will both be policy owners. On the death of the first life assured, the plan continues automatically on a single life, single ownership basis.
Contributions payable monthly or annually. 

Benefits

Proceeds payable upon: 
Death = Sum assured or cash value which ever is greater., 
Encashment = bid value of units allocated to plan less an early surrender charge. 
On maturity = bid value of units allocated to plan.

Charges

  • Unit Allocation - There is a 5% bid offer spread. A percentage of each contribution is allocated to units at the offer price. For the first ten years, allocation ranged from 89% to 100% depending on age and premium. If contribution continue after ten years, the allocation rate is 105%.
    All 12 Life Funds available; Managed, Gilt Edged, American Property, Equity, Fixed Interest Deposit, Far East, Overseas Earnings, American Managed, European, Property, American Equity and High Income.
    Clients may invest in up to 4 funds at any one time.
    * These funds were not available when the plans were taken out but are now available to switch into. 
  • Fund Switches
    Available at any time subject to a minimum switch of £500. An administration charge is automatically deducted from the investment at the time of the switch equivalent to 0.5% of the switch value. It is also possible to leave existing funds where they are, and redirect future investments - contributions - into a different spread of funds, free of charge. 
  • Annual Management Charges of ¾% per year of the whole fund value 
  • There are monthly deductions from units to cover:
    1. Indexed policy fee (stops after 10 years contributions paid).
    2. Mortality risk (i.e. death benefit). 
  • Stopping Contributions ~ If the value is greater than £1000, the plan is made Paid Up, if the value is less than £1000 then the plan is surrendered. 

Options

  • Paid Up ~ Available providing value, after the deduction of the early surrender charge, is £1,000 or greater. The death benefit reduces to the bid value of remaining units allocated and all options under plan fall away (e.g. no fund switching, no increases). Cash value automatically pays out at maturity (providing the cash value has not been extinguished by the monthly expense and mortality deductions). Plan can not be reinstated from Paid Up status. 
  • Early Surrender Charge is applied 
    1. on early encashment (before end of 10 years)
    2. or when contributions are permanently stopped before a full 10 years contributions have been paid.
    Surrender charge is as follows: -
    Number of complete years
    premiums paid Fixed charge as a percentage of one year’s gross annual premium
    Less than 3 40%
    3 38.5%
    4 37%
    5 34%
    6 30%
    7 25%
    8 17.5%
    9 10%
    After premiums have been paid for at least 10 years the cash-in value is the bid value of units remaining allocated. 

Maturity Options

  • Encash the plan, tax free and without incurring a surrender charge. 
  • Continue Contributions for a further 10 years. Unit allocation will increase to 105%. 
  • Reduce contributions to £1 and sum assured to £50, and take tax-free yearly, or half-yearly cash withdrawals, on the anniversary and six month point only. Minimum withdrawal is £250 (or £125.00 half yearly). If the plan is totally encashed before the end of this further 10 year term, the proceeds are free from any income tax liability or surrender charge. 
  • Reduce contributions to £1 and sum assured to £50, and take a Partial Surrender on the anniversary and six month point only. Minimum amount £250. Maximum amount is so as to leave £250 in plan. It is not possible to take a Partial surrender if cash withdrawals have been chosen. 
  • Reduce contributions to £1 and sum assured to £50, and allow fund to accumulate. Tax free withdrawals may be taken at a later date if required (only on the anniversary and six month point). Limits as option 3 

(N.B.  It may be possible to fund the continued contributions out of the withdrawal payments which are received by the client - i.e. 'recycle investments'.  The withdrawals must be taken and the contributions paid by the client - they cannot be recycled internally).

Taxation and Trusts

  • Taxation - Surrender Proceeds are tax free after 3/4 of the term or 10 years if earlier. If contributions cease, or the plan is made Paid - Up before these points, there may be a liability to higher rate tax
    Cash Withdrawals are tax free after 10 years.
    MIP's that continue for a further 10 years after the original 10 years, are tax free after the original 10 year term. 
  • The policy can be written in trust.
 

Maximum Investment Plan (DI)

Available 1 July 1992 - 31 July 2002.

A 10 year qualifying endowment plan (issued as a cluster of 10 "mini – policies) to provide investment benefits over a 10 year period with an option at Maturity to continue for a further 10 years. Could be written as Single Life (DIS), or Joint Life Second Death (DIL).

There are 2 options available on joint life second death plans:

  • Joint Life, Single Ownership, there are two lives assured, only one of whom is the policy owner.
    The plan continues until the death of the last survivor.
    If the owner dies first, ownership passes to the executors or administrators of his/her estate.
  • If the other life assured dies first, the plan continues, in effect, on a single life, single ownership basis.
    Joint Life, Joint Ownership,there are two lives assured who will both be policy owners.
    On the death of the first life assured, the plan continues automatically on a single life, single ownership basis.

 Contributions can be payable monthly or annually.

Benefits

  • Proceeds payable upon 
    Death = Sum assured or cash value which ever is greater., (For children under 16 years, if the sum assured is greater than £25,200, the death benefit will be a return of contributions).
    Encashment = bid value of units allocated to plan less an early surrender charge.
    On maturity = bid value of units allocated to plan.
  • Funds Available
    All 12 Life Funds available
    Managed, Gilt Edged, American Property, Equity, Fixed Interest Deposit, Far East, Overseas Earnings, American Managed, European, Property, American Equity, High Income
    Client may invest in up to 8 funds at any one time. 
  • Fund Switches
    Available at any time, an administration charge is automatically deducted from the investment at the time of the switch. It is also possible to leave existing funds where they are, and redirect future investments - contributions - into a different spread of funds, free of charge. 
  • Unit Allocation, there is a 5% bid offer spread. A percentage of each contribution (excluding the part for Waiver of Contribution benefit, if applicable), is allocated to units at the offer price.
    The higher the level of regular contribution the greater the rate of allocation will be:
    Total contribution (including any charges for waiver of contribution):
    Monthly Annually Unit Allocation
    Up to £49.99  Up to £599.99 97%
    £50.00 to £74.99 £600.00 to £899.99 100%
    £75.00 to £99.99 £900.00 to £1199.99 101%
    £100.00 or more £1200.00 or more  103% 

When an increase is applied to a plan, the % of unit allocation is as the above table.
Where indexation is applied to a plan, the % of unit allocation is the same as for the original plan.

Charges

  • Annual Management Charges, 1¼% per year of the whole fund value 
  • There deductions from the regular contribution for:
    1. Waiver of Contribution benefit (if applicable)
    2. Initial charge of 5% (bid/offer spread).
    There are monthly deductions from units to cover:
    1. Indexed policy fee (stops after 10 years contributions paid).
    2. Mortality risk (i.e. death benefit). 
  • Stopping Contributions, if the surrender value is less than 1/4 of the current annual premium the cash - in value is paid out less the early surrender charge. If the surrender value is greater than 1/4 of the current annual premium the policy will go to Stop/Start, this is available only as a result of underpayment, can not be requested.  

The client may miss up to 12 monthly payments whilst still maintaining full life cover (as long as the policy value can support the monthly expense and mortality deductions). The plan may be restarted by paying the outstanding contributions within a 13 month period.  The maturity date will then remain the same.

After 13 months, if contributions are not restarted, the early surrender charge will be deducted. The policy will then either be:

1. Paid up ~ If remaining value £1,000 or greater

2. Surrendered ~ If remaining value less than £1,000

All options under the plan fall away (e.g. no fund switching, no increases) whilst plan is at Stop/start status.  If the plan is restarted, the options are available as before.
Stop/Start may be available on the whole plan, or any of the "mini - policies" within the plan. Please note though,  Stop/Start can not be requested, it is only available as a result of underpayment.
After 13 months, if contributions have not been restarted, the early surrender charge will be deducted.  If the remaining surrender value is £1,000 or greater the policy will be made Paid up If the remaining surrender value is less than £1000 the cash value is paid out.

  • Paid Up Status is available only after 13 month Stop/Start period, providing value, after the deduction of the early surrender charge, is £1,000 or greater.  The death benefit remains the sum assured (as long as the policy value can support the monthly expense and mortality deductions).
    All options under plan fall away (e.g. no fund switching, no increases).
    Cash value automatically paid out at maturity (providing the cash value has not been extinguished by the monthly expense and mortality deductions). 

 

Options

  • Early Surrender Charge is applied:
    1. on early encashment (before end of 10 years) or
    2. when contributions are permanently stopped before a full 10 years contributions have been paid.
    This applies to the plan, or any of the "mini - policies" within the plan. The surrender charge is 12½% of any unpaid contributions due up to the end of the 10 years. (This includes the contributions due for Waiver of Contribution benefit, if applicable.) If plan has Indexation, the contributions due are based on the contribution level at the time the plan ceased.) 
  • Indexation ~ Must be chosen at commencement and contributions increase each year in line with the Average Earnings Index.  Indexation occurs automatically on each policy anniversary until regular contributions reach twice their original level, or until maturity. Each indexation increase is split evenly across all 10 "mini - policies".  

If indexation is declined on the plan, or any of the "mini - policies" within the plan, the maturity date of the plan/"mini - policies" will be extended by 10 years from that point, in order to keep the plan/"mini - policies" qualifying. Indexation only available on first 10 years, not available if plan continued for a further 10 years.

  • Increases

Available within first 10 years, subject to underwriting. Any increase will normally be applied to one of the "mini - policies" within the plan. When an increase is applied to a "mini - policy/policies":

1. the "mini - policy" must run for a further 10 years  (i.e. the term of the "mini - policy" is extended).
2. if indexation applies to the "mini - policy" it will fall away.
3. as any increase extends the term of the "mini - policy", tax free proceeds can be taken at the earliest of 10 years or 3/4 of the new term.
(The remaining "mini - policies" will not be affected by an increase to one or some of the "mini - policies", and will mature at the original 10 year point). 

 

Additional Benefits

  • Waiver of Contribution Benefit must be chosen at commencement and is only available on Single Life plans. Contributions are 'waived' if Life Assured unable to earn living through usual/suitable form of occupation for a period of more than 3 months. The benefit will apply up to the policy anniversary immediately preceding age 65 male/60 female (or normal retirement age) or up to the original maturity date of the plan. 
  • Maturity Options

    1) Encash The Plan ~ Tax free and without incurring a surrender charge. Under this version of the MIP it is possible for the proceeds to be reinvested into a variant of the PIB with no establishment fee or early encashment charge ~ full details can be found in the PIB handbook. 

    2) Continue Contributions ~ For a further 10 years (unit allocation will remain at the same level).If the Continuation option is chosen and then contributions cease, as long as at least one monthly contribution has been paid under the new term, the plan or "mini - policy/policies" will be made paid up.  the Cash proceeds may be taken in full as a tax free cash lump sum, at any time before the 20th policy anniversary.

    3) Take Tax Free Cash Withdrawals ~ Contributions must continue for a further 10 years.  Unit allocation will remain at the same level, subject to a minimum remaining plan value (currently 4 times the annual contribution).  If below this level, unit allocation is subject to a maximum of 101%. Any cash withdrawal will extend the term of the "mini - policy/policies" by 10 years. If the plan, or any of the "mini - policies" within the plan, is totally encashed before the end of this further 10 year term, the proceeds are free from any income tax liability or surrender charge.
    (N.B.  It may be possible to fund the continued contributions out of the withdrawal payments which are received by the client - i.e. 'recycle investments'.  The withdrawals must be taken and the contributions paid by the client - they cannot be recycled internally).

    Taxation and Trusts 

  • Taxation ~ Surrender Proceeds are tax free after 3/4 of the term or 10 years if earlier, (a change to the plan, or "mini - policies" within the plan, may have resulted in an extension of the original term).
    Example:
    A 10 year MIP is tax free on total surrender after 7½ years  (i.e. there have been no changes to any of the "mini - policies".)
    A MIP with an 18 year extended term (originally a 10 year plan with indexation, indexation then declined in year 8, the plan therefore is extended by 10 years to 18), is tax free on total surrender after 10 years.  (This applies to the whole plan or any of the "mini - policies" within the plan.)
    If contributions cease, or the plan, or any of the "mini - policies" within the plan, is made Paid - Up before these points, there may be a liability to higher rate tax.  (Each "mini - policy" is assessed separately for any higher rate tax liability).
    Cash Withdrawals tax free after 10 years (contributions must be maintained).
    MIP's that continue for a further 10 years after the original 10 years, are tax free after the original 10 year term.
  • The policy can be written in trust. 

Portfolio Investment Bond

Available January 2001 - April 2005

Single premium, non-qualifying, unit-linked, life assurance policies. 100% of the contribution is allocated to accumulation units in the fund(s) of the Bondholder’s choice.Each policy will be issued as a ‘cluster’ of 100 separate and individual contracts.

Types of Product

  • DSI - Standard product used in new business situations.
  • DST - Bond replacement cases when replacing products from external companies.
  • DSR - Bond replacement cases when replacing internal Zurich products.
    Bond replacement cases when reinvesting procedures of maturing Zurich Maximum Investment Plans.
  • Versions
    Single life - Single ownership
    Joint life - Single ownership
    Joint life - Joint ownership
    Children’s Investments

Feature/benefits

  • Offers access to a range of funds managed by Threadneedle and other leading fund managers
  • Death benefit - The greater of the original investment (less withdrawals) or 101% of the fund value
  • Ability to take regular withdrawals as and when required.
  • A facility to allow Bondholders to switch between funds on a bid to bid basis once a quarter free of charge.
  • Partial Surrenders are available at the Bondholder’s request.
  • A Cash Withdrawal Plan providing regular withdrawals for the Bondholder to use as “income”, if required.
  • A Top Up Facility allows additional investments to be made to the same Bond at any time.
  • The policy can be written in trust.

Stock Market BES (LC)

Available from 6 September 1993, the product could not be sold after 31 December 1993. Each tranche was offered for sale for a maximum of 40 days. The first tranche tied in with the start of the educational year and was available from 6th September to 4th October 1993.

  • Eligible clients; UK Tax resident investors (and Crown Employees Overseas) age 18+. Plans were only on single life basis.
  • The product is a lump sum investment product with a fixed five year term, designed to take advantage of Business Expansion Scheme taxation incentives investing in residential property linked to Oxford University Colleges.
  • Zurich Marketing Services acted as distributors and Sponsors of the BES introducing investors to the BES Companies, sponsored by Hodgson Martin, an Edinburgh based Investment Management Company.

Each BES Company buys residential properties from AA Oxford College. The College in turn undertakes to buy back the properties at or about a specified date in the future at a price determined by the price of securities and designed to provide a return related to the original investment and to the performance of the FT-SE 100 Share Index. Growth in the FTSE 100 Share Index was locked in on an annual basis, a fall will be treated as nil growth. The growth in the FTSE 100 index was calculated and locked-in on an annual basis at 72% of the original investment. A fall in the FT-SE over a given year is treated as nil growth.

 The set dates were 8th October each year (or next working day if 8th October is not a working day). The Colleges backed this commitment by investing appropriate amounts on deposit and in options with acceptable counterparties. This will be provided by an MTN with an AA institution and an option with UBS who are AAA.

The fixed return was set at 75p to give a money back return to standard rate taxpayers. The FT-SE 100 Gearing is .72 and reflects the charges levied by each party and the market conditions at the outset of the product.

The product could not be sold after 31 December 1993. Each tranche can be offered for sale for a maximum of 40 days.

The first tranche tied in with the start of the educational year and was available from 6th September to 4th October 1993.

There were four BES companies in the first tranche, these and the funds available to each company are set out below:

The Residence at Jesus College Plc - £2,470,000

The Residence at St Catherine's 1 Plc - £5,000,000

The Residence at St Catherine's 2 Plc - £4,648,000

The Residence at St Hilda's Plc - £4,965,000

The product has a 5 year term with maturity on 8th October 1998. (5 years from the Share Allocation date of 8 October 1993). and is designed to provide a return of 75p per £1 invested and an opportunity to participate in locked-in gains in the FTSE 100 Share Index.

  • Death Benefit ~ the investment does not end on death but passes with the Client's estate.

There are no specific funds available although, at outset, clients had the opportunity to select one of the four different BES Companies (linked to specific Oxford University Colleges) in which to invest.

Charges

  • The initial charge is 9.9% (Zurich 6.9%, Hodgson Martin 3.0%). The Universities payment comes from the difference between the purchase price of the properties and the funds they need to invest to provide the return.
  • There is an annual Management Charge of 0.3% split 0.2% to Hodgson Martin, 0.1% to Zurich. There is a realisation fee of 0.5%, 0.4% to Hodgson Martin, 0.1% to Zurich.

Taxation and Trusts

Taxation, under the BES rules, investors could benefit from tax relief on up to £40,000 of their investment. The proceeds emerge tax free from the BES. In addition, for applications prior to 5 October 1993 Investors could carry back unused tax relief to the 92/93 tax year up to a maximum of 50% of their investment, or £5,000, whichever is the lower.

To qualify under the BES rules, property must either already be in existence but be tenanted after the BES shares have been issued, or be newly built and not yet tenanted. The BES company will be liable to Corporation Tax on its' profits, and this will be reflected in the FT-SE Gearing. provided the BES company qualifies, proceeds from the sale of BES Company Shares will be tax free in the hands of investors. Two key elements in the taxation of the BES are the availability and timing of tax relief on the investment and the continued qualification of the BES company.

Variable Investment Plan (AR)

Available 1 April 1972 to 31 March 1976

A Whole Of Life contract that was only written on a single Life basis to provides high life cover with assured investment benefits

Benefits

  • Proceeds are payable upon death or encashment, the death benefit is the sum assured or cash value, whichever is the greater
  • Funds Available Managed, Property, Equity, Fixed Interest Existing units may be switched 100% into any one of these funds, or any combination of the four. New units may be allocated 100% into any one of these funds , or split as follows : 1/2 Property - 1/2 Equity 2/3 Equity - 1/3 Property 1/3 Equity - 2/3 Property 1/2 Fixed Interest - 1/2 Equity 1/2 Fixed Interest - 1/2 Property
  • Fund switches may only be made on policy anniversary, minimum value to switch is £500. Charges:
  • Fund value Charges made £500 to £999 1% of Bid Value of units switched £1000 to £4999 1/2% of Bid Value of units switched £5000 to £9999 1/4% of Bid Value of units switched £10000+ No charge if 1st switch in policy year, 1/4% on all subsequent switches in same year
  • Unit Allocation, 97% of premium for first ten years, 105% thereafter all into accumulation units.

Charges

  • If annual gross contribution is less than £500 or the monthly figure is less than £50, a £6 per annum/50p per month gross charge is added.
  • Fund Management Charge ½% per year of whole fund value
  • Stopping Contributions - If one year's contribution or more were paid the plan is made “paid up”, if less than this the plan would be surrendered.
  • Surrender Charges depend on numbers of years contributions had been paid.
Years Reduction 
1 or less   40%
 2  37.5%
 3  34.5%
 4  31%
 5  27%
 6  22.5%
 7  17.5%
 8  12%
 9  6%
 10 or more  Nil

  • Increases ~ There is no facility to increase

Options

  • Options At The End Of 10 Years 1. Take proceeds tax free, and without incurring a surrender charge. 2. Continue plan, paying full contribution. 3. Regular withdrawals and partial surrenders 4. Before 25.2.88. reduce premium to £1.00 per annum and leave fund to accumulate.
  • Regular Withdrawals ~ available after ten years, provided premium reduced to £1.00 per annum before 25.2.88. Withdrawals may be taken on a half - yearly or yearly basis. Not available after 25.2.88.
  • Partial Surrenders ~ available after ten years, provided premium reduced to £1.00 per annum before 25.2.88. After 25.2.88 - available after ten years, provided premium reduced by half and paid annually.
  • Paid Up Plans ~ If plan made paid up before 10 years for plans issued before 1 June 1973: The number of units allocated remains the same, and a surrender charge is payable when the plan is cashed - in. Plans issued after 1 June 1973: The number of units are reduced by a number of units equal to the surrender charge divided by the then bid price. The plan may then be surrendered for no further charge.

If the plan is made paid - up before 10 years the Death Benefit is the original sum assured multiplied by the number of years premiums actually paid, divided by 10.orthe value of the reduced number of units at their bid price whichever is the greater.If the plan is made paid up after 10 years:The guaranteed sum assured remains the same, regardless of whether or not premiums have been discontinued.

  • The Cash - in value is the bid value of the units allocated.

Benefits

  • For a Guarantee Against Loss an additional premium of 1% per annum is payable. If plan is maintained for 10 years, the proceeds on cashing-in the plan within one month after the end of the 10 years will not be less than the total premium contributions made during the 10 years. (After 1 June 1974, if the Equity fund was chosen at any time, the guarantee against loss falls away.)

Taxation & Trusts

  • Proceeds are tax free after ten years. If cashed - in or made paid - up before this point, there is a potential liability to higher rate tax.
  • The policy can be written in trust.

Variable Investment Plan (AS)

Available 1 April 1972 to 31 March 1976

It was a Whole Of Life plan to provide maximum investment benefits with an element of life cover. It was only written as a Single Life contract.

Benefits

  • Proceeds Payable upon death or encashment. The Death Benefit is a rising sum assured (always equal to total premiums paid), or cash value, whichever is the greater.
  • Funds Available; Managed, Property, Equity, Fixed Interest. Existing units may be switched 100% into any one of these funds, or any combination of the four. New units may be allocated 100% into any one of these funds , or split as follows:
    1/2 Property - 1/2 Equity
    2/3 Equity - 1/3 Property
    1/3 Equity - 2/3 Property
    1/2 Fixed Interest - 1/2 Equity
    1/2 Fixed Interest - 1/2 Property
  • Fund switches may only be made on policy anniversary, minimum value to switch is £500. Charges:
  • Fund value Charge made
    £500 to £999 1% of Bid Value of units switched
    £1000 to £4999 1/2% of Bid Value of units switched
    £5000 to £9999 1/4% of Bid Value of units switched
    £10000+ No charge if 1st switch in policy year, 1/4% on all subsequent switches in same year
  • Unit Allocation ~ 100% of premium for first ten years, 105% thereafter all into accumulation units.

Charges

  • If annual gross contribution is less than £500 or the monthly figure is less than £50, a £6 per annum/50p per month gross charge is added.
  • Fund Management Charge ½% per year of whole fund value
  • Stopping Contributions ~ If one year's contribution or more were paid the plan is made “paid up”, if less than this the plan would be surrendered.
  • Surrender Charges depend on numbers of years contributions had been paid.
Years Reduction 
1 or less   40%
 2  37.5%
 3  34.5%
 4  31%
 5  27%
 6  22.5%
 7  17.5%
 8  12%
 9  6%
 10 or more  Nil
  • Increases ~ There is no facility to increase

Options

  • Options At The End Of 10 Years
    1. Take proceeds tax free, and without incurring a surrender charge.
    2. Continue plan, paying full contribution.
    3. Regular withdrawals and partial surrenders
    4. Before 25.2.88. reduce premium to £1.00 per annum and leave fund to accumulate.

  • Regular Withdrawals ~ available after ten years, provided premium reduced to £1.00 per annum before 25.2.88. Withdrawals may be taken on a half - yearly or yearly basis. Not available after 25.2.88.
  • Partial Surrenders ~ available after ten years, provided premium reduced to £1.00 per annum before 25.2.88. After 25.2.88 - available after ten years, provided premium reduced by half and paid annually.
  • Paid Up Plans ~ If plan made paid up before 10 years for plans issued before 1 June 1973: The number of units allocated remains the same, and a surrender charge is payable when the plan is cashed - in. Plans issued after 1 June 1973: The number of units are reduced by a number of units equal to the surrender charge divided by the then bid price. The plan may then be surrendered for no further charge.
  • If the plan is made paid - up before 10 years, the death benefit is a reduced sum assured calculated by the Actuary of the Company (will never be less than cash - in value of plan at time of death).
  • If the plan is made paid up after 10 years the guaranteed sum assured will remain at the level reached by the payment of the last contribution.
  • The Cash - in value is the bid value of the units allocated.

Benefits

  • For a Guarantee Against Loss an additional premium of 1% per annum is payable. If plan is maintained for 10 years, the proceeds on cashing-in the plan within one month after the end of the 10 years will not be less than the total premium contributions made during the 10 years. (After 1 June 1974, if the Equity fund was chosen at any time, the guarantee against loss falls away.)

Taxation and Trusts

  • Proceeds are tax free after ten years. If cashed - in or made paid - up before this point, there is a potential liability to higher rate tax.
  • The policy can be written in trust.

Variable Investment Plan (CR)

Available 1 April 1976 to 31 August 1979

It was a Whole Of Life plan to provide maximum investment benefits with an element of life cover. It was only written as a Single Life contract.

Benefits

  • Proceeds payable upon death or encashment. The Death Benefit is a rising sum assured (always equal to total premiums paid), or cash value, whichever is the greater.
  • Funds Available; Managed, Property, Equity, Overseas Earnings, Gilt Edged
  • Fund Switches ~ minimum £500, charge ½% of bid value of units switched.
  • Unit Allocation ~ 100% of premium for first ten years, 105% thereafter all into accumulation units.

Charges

  • If annual gross contribution is less than £500 or the monthly figure is less than £50, a £10 per annum/£1 per month gross charge is added.
  • Fund Management Charge ¾% per year of whole fund value
  • Stopping Contributions ~ If value is greater than £1,000 “paid up”, if less than this the plan would be surrendered.
  • Surrender Values ~ If the plan is cashed-in before ten years premiums are paid, the cash-in value is a percentage of the bid value of units allocated less a surrender charge as follows
End of year Percentage of units  Fixed Charge as a percentage of total gross basic contributions payable to end of year   
     Age up to 49  Age up to 49
 1  82.6  30  30
 2  84.3  10  12.5
 3  86.1  5  8.34
 4  87.9  2.5  6.25
 5  89.7  1  5
 6  91.6  0  4.17
 7  93.6  0  2.86
 8  95.6  0  1.88
 9  97.8  0  1.12
 10 or more  100  0

Example of surrender value during first 10 years

Age at commencement 55 with premium of £50 per month paid for 5 years, Bid value of units £3,000. Surrender Value = Percentage of bid value – surrender charge
= (89.7% of £3,000) – (5% of £3,000)
= £2691 - £150
= £2541

Options

  • Increases ~ There is no facility to increase
  • Partial Surrenders available after ten years. Contributions reduce by ½ and is paid annually.
  • Regular Withdrawals available after ten years. Contributions reduce by ½ and is paid annually. Withdrawals may be taken on a half - yearly or yearly basis.
  • Paid Up Limit ~ minimum of £1000 value. Plan made paid up before 10 years: The original sum assured is reduced in the ratio of the premiums paid to the total premiums payable to age 75. It is further reduced by the percentage used to reduce the number of units in the Surrender calculation. If the plan is made paid up after 10 years, the original sum assured is reduced in the ratio of the premiums paid to the total premiums payable to age 75
  • The cash - in value is the bid value of the units allocated

Additional Benefits

  • For a Guarantee Against Loss an additional premium of 1% per annum is payable. If plan is maintained for 10 years, the proceeds on cashing - in the plan within one month after the end of the 10 years will not be less than the total premium contributions made during the 10 years. This is not available for plans commenced after 1 January 1978.

If the Equity or Overseas funds are chosen, the guarantee against loss falls away.

Taxation and Trusts

  • Proceeds are tax free after ten years. If cashed - in or made paid - up before this point, there is a potential liability to higher rate tax.
  • The policy can be written in trust.