A Guide To Life Insurance - The Versatile Endowment Policy Exampels ....

 

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The Versatile Endowment Policy Exampels...

The past two decades have seen the emphasis in life insurance selling switch heavily to with profit endowments.

Rising interest rates over this period have done the same damage to the non-profit endowment as they have to the non-profit whole-life policy, and today non-profit policies are rarely used except in certain special cases such as the repayment of a fixed loan advanced by the life insurance company itself.

The with profit policy, on the other hand, has been the main beneficiary of the rise in stock market and property values in the years since 1995. For those who could afford the premiums, the short-term with profit endowment has been the best way to participate in this rise.

These policies are not protection-oriented.

Those in search of life cover for their families will have to be very well off to be able to buy an adequate sum assured through a with profit endowment and the investment attractions of these policies should never lead you to take out the modest with profit endowment you can afford rather than the term assurance you may need.

The with profit policy is designed to turn regular savings into a capital sum over periods ranging from 10 to 40 years.

The ultimate uses of the accumulated sum are so multifarious that it would be impossible to list them; nor are most people who decide to save in this way themselves always sure what they will eventually use the money for.

Certainly the urge to add to one's savings for retirement is a powerful motive, whether the aim is to add to a basic pension that will provide only the bare necessities of life or whether to enjoy luxuries such as a world cruise on the QE2. Other motives may be to provide a source of capital to facilitate the development of one's own business, to provide funds for the private education of one's children, or to enable one to buy a cottage in the country.


2015 - Guide To Life Insurance - New sections added ....

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Example
Mr Crane is aged 45 and wants to retire early at 60.
This will mean a lower pension from his firm than if he stayed until the normal retirement age, and so he decides to supplement it by taking out a 15-year with profit endowment.
He takes out a £26,000 sum assured policy at an annual cost of £2420 gross ( £2346.5 after tax relief).
Assuming that the company continues to pay the same rate of reversionary bonus, he will actually receive reversionary........ see: click here for Policy Loans


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We are not authorised to give advice and we are not liable for any financial advice provided by, or obtained through a third party. The information published on this website is for information purposes only. This site has been approved for compliance purposes by a Firm of Independent Financial Advisors who are authorised and regulated by the Financial Services Authority (FSA). The Chartered Insurance Institute

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