Life
Insurance With-profits
With-profits fund is a pooled investment. This is where the
money you pay in is pooled with other premiums and invested
by the insurer in a wide range of assets. These will sometimes
include stocks and shares, bonds, property, government bonds
and also cash.
The
investment return your policy pays is them smoothed and you
are sheltered from the extreme variations of direct investment.
The investment growth that is achieved by the with-profits
fund is then paid to you as regular and final bonuses and
then added to your life insurance policy.
Once
all bonuses have been added, they cannot normally be taken
away. Growth and bonuses cannot be usually guaranteed in advance
but your bonuses will add to your sum insured, bringing a
good investment return over the years of your life insurance
policy.
The
with-profits endowment policy is also a means of regular long-term
saving with a minimum of risk and the potential for a good
return. It can smooth out fluctuations in the value of investments,
but there is no guarantee of the final (maturity) value of
the policy.
With-profits bonds are usually another way of investing in
with-profits funds by paying a single insurance premium.
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