With-profits
With-profits Policies
A with-profits policy is a type of investment fund.
Policies that are with-profits give the insured the extra benefit of a possible bonus that is a share of the profits from the funds that the premiums have been invested in.
How and where the premiums are to be invested is worth establishing if you are going to invest in a with-profits product, such as single premium insurance bonds for example. But as with all long-term investments in the stock market or in interest bearing instruments it is important to stay with them for the long term. That way they have time to build up and "smooth" the short term ups and downs in rates of return. The with-profits endowment policy is also a means of regular long-term saving and has the potential for a good return, but there is no guarantee of the final (maturity) value of the policy.
Some policies may also benefit from terminal bonuses if they are held for their full term. When choosing insurance products for investment it is important to be aware of what charges, fees or commissions may be attached to them and when profits and bonuses are added to the policies. Some, for example, will be heavily weighted with charges at the beginning of their policy life.
Once any bonuses have been added, they cannot normally be taken away. Growth and bonuses cannot be usually guaranteed in advance but any bonuses will be added to your sum insured, bringing a possible investment return over the years of your life insurance policy.
With-profits bonds are usually another way of investing in with-profits funds by paying a single insurance premium.
Market Value Adjustments (MVA) - what are they and how do they affect With-Profit investments?
A Market Value Adjustment (MVA) is a way for the insurer to make sure that the amount of money paid out to an investor is a fair reflection of that investor's share of the with-profits fund, and any growth which has been achieved on the fund. The MVA is used to protect the remaining policyholders with units in that fund.
The adjustment is made via a penalty that may be applied if a customer takes units out of a with-profit fund other than on a pre-agreed date, to take account of investment market conditions at the time.
The operation of the MVA may mean that the value of your investment, if encashed early, could be less than the amount invested.
A MARKET VALUE ADJUSTMENT MIGHT APPLY ON ENCASHMENT. THE VALUE OF THIS POLICY DEPENDS ON HOW MUCH PROFIT THE COMPANY/FUND MAKES AND HOW THEY DECIDED TO DISTRIBUTE THAT PROFIT.
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Contact Our Brentwood Office
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Jubilee House
The Drive
Brentwood
Essex
CM13 3FR
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Phone : 0333 011 5550
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Email : info@ifahomecounties.co.uk
Contact Our Harlow Office
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IFA Home Counties Ltd
Lynfield
Harlow Road
Roydon
Harlow
Essex, CM19 5HH
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Phone : 0333 011 5550
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Email : info@ifahomecounties.co.uk
The information contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.
IFA Home Counties Ltd is authorised and regulated by the Financial Conduct Authority. IFA Home Counties Ltd is entered on the Financial Services Register (www.fca.org.uk/register) under reference 488819.
Registered in England & Wales under reference 6689780. Registered Office: Rosemont 14 St Leonards Road, Nazeing, Essex, EN9 2HJ.
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If you wish to register a complaint, please contact us either in writing at: IFA Home Counties Ltd, Lynfield, Harlow Road, Roydon, Harlow, Essex, CM19 5HH or by phone on 0333 011 5550.
A summary of our internal complaints handling procedures is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 023 4567.