insure & invest

Factfile: Life Assurance Savings Plans - Endowments

Lump sum investments: No

Regular premiums allowed: Yes

Flexible payments allowed (stop/start/additional/increase/decrease): No (unless mortgage shortfall)

Investment Risk Profiles Available:

• With profits
• Unit Linked
• Low Cost

Changing funds and risk profile allowed: Yes

Moving to another company allowed: No

Life Insurance Included: Yes

Personal Tax Benefits:

• Tax free pay out on maturity or death (provided complies with normal qualfying rules)
• Investment fund pays taxes before you receive returns

Can be held inside Trust: Yes

Suitable For:

• Adults
• Basic Rate Tax Payers
• High Rate Taxpayers

Insolvency Compensation Limits:

• Insurance Company Funds - 90% of total funds invested. No Limit.

Brief Description:

Life Assurance savings plans are endowment policies.  These are very effective savings plans and are good for tax payers as the benefits are paid tax free, provided qualfying rules are not breached.  Most people associate endowment policies with mortgages and these have received poor press given that they use up valuable premiums to offer and pay for higher levels of life cover and that investment return assumptions were too optimistic.  It is possible for endowment policies to be taken out, even if you do not have a mortgage with low life cover requirements to deliver potentially excellent returns.

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