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With-profits

With-profits Policies

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.

Please be aware that in some cases this type of assurance is based on an assessment of the health of the applicant.

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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Company address:
Twigden Asset Management Ltd, King William House, 46 Harpur Street, Bedford, Bedfordshire, MK40 2QT
T: 01234 270074
F: 01234 327331

Email: debbie@twigdenasset.co.uk

Registration address as company address
Registration number: 4691087
Registered in: England & Wales

Twigden Asset Management Ltd is authorised and regulated by the Financial Conduct Authority.

Twigden Asset Management Ltd entered on the Financial Services Register (www.fca.org.uk/register) under reference 223678.

The information contained in this web site is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

Please note that the information contained within this web site does not represent individual financial advice. If you require advice or further information this may be obtained by contacting Twigden Asset Management Ltd.

FCA does not regulate some forms of IHT planning.

Your home may be repossessed if you do not keep up repayments on your mortgage, think carefully about securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

The value of investments can fall as well as rise. Past performance is not a guide to future performance.

Telephone: 01234 270074 | debbie@twigdenasset.co.uk

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