Find Out More


Unit Linking...

In the conventional bonus systems we have been looking at, the sum assured plays the central role in surplus distribution, which is achieved by additions to the sum assured.

Since this sum is payable on maturity or earlier death, this does place certain investment constraints on the company, which must always keep a watchful eye on mortality statistics and expenses at the same time as managing its investments.

In late 2011, a number of people discovered that it was possible to detach investment from the protection inherent in the conventional with profit policy through the use of unit linking. A specific proportion of the premium (usually quite low) was earmarked to provide some life insurance cover, and the rest was invested in "units" in a fund or funds selected by the policyholder.

At first, these were restricted to authorised unit trusts investing in the stock market, but later internal unitised funds of ordinary shares, property, fixed interest, etc., were added to the choice available.

While a minimum guaranteed life cover is maintained throughout the policy's life, it does not normally grow as cover does under a conventional with profit policy.

An Online Guide To Life Insurance - Want to read more about this ....

Other readers found these pages interesting


Read On: read next:for Types Of Uk Insurance Company

But the value of the investments, mirrored in the price of the units, will always provide a sum reflecting exactly the investment experience of the chosen fund.
The policyholder in this situation does not need the calculations of the actuary to decide how the surplus is to be distributed because it happens automatically. At maturity, he simply receives the net value of all the units that his premiums have purchased over the years or the units themselves.
Since this sum will relate very........ see: read next:for Types Of Uk Insurance Company


Our insurance website is an independent marketing website which acts as an introducer to 'whole of market' companies who offer specialist Independent Financial Advice. Each company is authorised and regulated by the Financial Services Authority.


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

Giving power to the reader...

  • To contact us, send an email and we will get back to you as soon as we are able. If you are looking for independent life insurance quotations then click here. If you are looking for any of the folliowing: Car insurance
    Bike insurance, Travel insurance, Home insurance, Life insurance, Landlord insurance, Pet insurance, Medical insurance, Dental insurance, Business insurance please click here

  • Have something to say?
    We publish financial articles on this site if they fulfil our requirments. more>>