Life Assurance as Investment

If you look at the financial pages of your daily newspaper, you will find two prices for many unit trusts, the offered price, which is what you pay when you buy them, and the lower bid price, which is how much your units are worth when you sell them (For example, 47'9-90.0; 9o.o is the offered price, so you must pay 9op to buy each unit, but 47.5 is the bid price, meaning that you would obtain 472p if they were sold).

This difference in price hides a 9 % initial management charge, and there is also a small renewal charge deducted from the market value of the units. Where your insurer runs his own special funds, he may not issue a daily range of offer and bid prices, s0, to make a comparison, the best way is to ask how much of each premium is invested after all charges, including unit trust and investment charges, have been deducted.

Many people tend to place too much emphasis on these deductions, rather than on the far more important factor, the actual performance of the fund. Take, for example, two schemes where a different amount of the premium goes into equities each month, 60 % and 79 % respectively. If both schemes achieve the same growth rate for their investments, then obviously it will pay you to invest in the first, where more of your gross premium is invested.. But if the second scheme follows -a shrewder and more successful investment policy over the long term, you may well find that your return will eventually be greater with them than with the first scheme. This is another reason why you should only choose a. policy linked to an investment group which has an established record.

Income: Some unit trust funds are designed specially to provide a high yearly income; others specialize in long-term capital growth. With a unit-linked assurance, you are usually more interested in long-term capital growth, rather than immediate income. Ideally you would, of course, like a high income and a large capital growth, but in practice it is virtually impossible to obtain both. Many insurers keep for themselves the yearly income arising from their investments; others reinvest it for you The latter is obviously preferable,


Life Assurance as Investment

Payroll Giving
It’s all very easy to organise.
Just ask the Personnel or the Payroll Department at your company and, if they already have a scheme, they will give you the relevant forms.  HM Revenue & Customs’ website has a list of Payroll Giving agencies and explains payroll giving in more detail.

Salon Gold Insurance

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read on: Amount at maturity

If you look at the financial pages of your daily newspaper, you will find two prices for many unit trusts, the offered price, which is what you pay when you buy them, and the lower bid price, which is how much your units are worth when you sell them (For example, 47'9-90.0; 9o.o is the offered price, so you must pay 9op to buy each unit, but 47.5 is the bid price, meaning that you would obtain 472p if they were sold).

This difference in price hides a 9 % initial management charge, and there is also a small renewal charge deducted from the market value of the units. Where your insurer... see: Amount at maturity