An ideal investment for dormice

Article Abstract:

There are two main sorts of with-profits funds. One is a with-profits endowment policy and the other is with-profits bonds. With-profit funds are too complicated for the average investor to consider unless they understand how they operate and can pick a good fund. Investors cannot monitor the progress of these funds in the newspapers and must work from annual reports from a life insurance company. The investor receives an annual with-profits bonus plus a terminal bonus. With-profits offers a better return than direct investment when the stock market is low but not when it is high.

Personal Investing, Evaluation, Personal finance, Investments

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Few bargains on the second-hand market

Article Abstract:

Second-hand endowment policies have become too expensive in the United Kingdom, the Institute of Actuaries argues, and it has asked the Personal Investment Authority to examine this market. The bonuses paid to holders of endowment policies could be reduced, which would affect the policies' value. Returns tend to be opaque for this product, but they are at around 9% annualised in relation to prices paid by investors. The price would drop if more second-hand policies were available, and investors surrendering policies to insurers could sell to other investors.

United Kingdom, Prices and rates, Insurance industry

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