Quick Enquiry
There are two types of life insurance investment type and term insurance
INVESTMENT TYPE LIFE INSURANCE
Investment type life insurance pays out if you die and if you don’t (with the exception of whole life insurance)- and may sound ideal. However, investment type policies cost a lot more than protection only insurance. Usually it is best to keep your insurance and investment needs separate.
If you want investments, consider the full range of products (not just life insurance) which might meet your circumstances and needs.
These are all investment type life insurance:
- Whole of Life Insurance
- With Profit Bonds
- Unit Linked Bonds
- Income and Growth Bonds
- Endowment Policies
- Maximum Investment Plans
- Other Life Insurance which builds up a cash-in value
(To find out more about a specific investment type product, please see the investments section of the FSA Consumer Website).
WHAT TO CHECK OUT - DOES IT MEET YOUR NEEDS?
- Do you want income, growth or both from your investment (i.e. the focus is investment, not insurance)?
- For how long are you prepared to invest?
- Will you need to get at your money early?
- Part of your premiums pay for life cover – do you need this? If not, other investments might give you a better return. If you do, check whether separately buying term insurance plus other investments would be a better deal.
COST
- How much must you pay in total over the life of the policy?
- How are the charges taken?
- Research shows that charges are one of the most important factors to check out.
- The Key Features document (soon to be replaced with Key Facts) tells you about charges.
YOUR COMMITMENT
- How much must you pay, when and how often?
- If the policy requires regular payments, can you stop and start them without stopping the policy
- Can you vary the amount you pay?
FLEXIBILITY
- Can you vary the amount you pay and even stop premiums for a while?
- Can you transfer your policy to another provider?
- What charges are deducted if you stop the plan early or transfer it to another provider?
RETURN
- Does the provider pay tax on the investments underlying the policy? (If so, bear in mind you cannot reclaim this tax).
- Check if you will have to pay tax on amounts the policy pays out.
- Given your personal tax position, is this a suitable policy?
WARNING Do not rely on past investment performance
RISK
- Can you choose how your money is invested?
- Some investment funds are riskier than others, is there a fund matching the level of risk you are happy to take?
- Can you alter the way your money is invested during the lifetime of the policy? Is there a charge for doing this?
- If you choose a with profits policy, are you happy with the financial strength of the company?
- If you are drawing an income from the policy, how likely are you to get your capital back in full?
REVIEW
If you are using the policy to meet a specific savings target – for example, to pay off your mortgage or pay school fees – check regularly that your savings are on track and, if necessary, you may need to think about increasing the amount you save.
OTHER
WARNING: Check what charges are deducted if you stop the plan early or transfer it to another provider.
Make sure you understand how a with profits policy works before you invest.
Additional information to be aware of specific to with profit bonds
