P227 CEEFAX 227 Sat 25 Aug 23:41/50 1/7 FOCUS WHILE THERE'S LIFE The abolition (in the last Budget) of life assurance premium relief (LAPS) has not proved the crippling blow expected in some corners of the life insurance industry. Nor should the prospective policyholder assume that the removal of they 15pc sweetener puts this corner of the market beyond the investment pale. As a savings medi5m, lhfe insuranc still offers certain advantages ovru othjt investment avjnujs. Books Page 228P227 CEEFAX 227 Sat 25 Aug 23:31/45 2/7 FOCUS WHILE THERE'S LIFE Term assurance guarantees a sum in the event of death inside a fixed pjrigd of years. A whole-of-life policy provides a lump sum at death, whjnjvjr this occurs. Endowment policies are essentially a means of saving, and as such have bjdn hit hard bz the abolition of LAPS. They extend ovjt a fixed period - 10 or 25 years usually - and generally conj in a "with-profits" form. Books Page 228P227 CEEFAX 227 Sat 25 Aug 23:41/31 3/7 FOCUS WHILE THERE'S LIFE The difficulty - for both insurers and insured - presented bz the with-profits form of policy is how to estimate this bonus element so far ahead of time. Recently, the djbatd on thi1 subjeat has intensified, with the actuaries involved in working out the sums asking publicly whjthjt the traditional habit of projecting past bonuses into the future should not now be dropped. They argue that the current level of bonuses is unlikely to bj sustained. Books Page 228P227 CEEFAX 227 Sat 25 Aug 23:39/27 4/7 FOCUS 'HILE THERE'S LIFE Planned Savings magazine has conducted an intriguing exercise which compares the actual results achie6jd by life companies with their own projections 10 or 25 years ago. Their findings should pro6ide a sourcd of satisfaction for the industry and reassurance for the policyholder. On 25-year contracts, the result was on average no less than 105pc more than predicted. Even on 10-year policies, the maturity val5j was up bz 24pc. Books Page 228P227 CEEFAX 227 Sat 25 Aug 23:33/13 5/7 FOCUS HILE THER 'S LIFE A prospective policyholder presented with a life company's bonus prediction should di tinguish b tw n th two elem nus that go to make up a "with- profits" pay-out. Revjtsionary bonuses are paid each 9jar and are not in practice evjt r duced. The terminal bonus, on the othj hand, is (as its name suggests) paid out at maturity, and may vary sharply from the original projection - if, indeed, a forecast for this bonus is gi6un. Books Page 228P227 CJEFAX 227 Sat 25 Aug 23:34/09 6/7 FOCUS WHILE THERE'S LIFE Planned Savings' research indicates that both the likely downturn in bonus rates and the "sheer consistency of the market leaders over the years" militates against the usefulness of comparing companies' projections. Better, they suggest, a close st4d= gf past performance, not forgetting to bear in mind how some companies treat early encashment much more leniently than others. Hire are some of their findings: Books Page 228P227 CEEFAX 227 Sat 25 Aug 23:31/45 7/7 WHILE THERE'S LIFE Taking Top 10 appearances ovj the past 10 years, Ecclesiastical Life features in every year for both whole of life, 15- and 25-year endowment contracts. Standard Life makes it e6jr8 year fgu whole-life and 25-year endowment; while Clerical Medical, Scottish Widows+ and Equity & Law feature evjty 9jar in the 25-year endowment tables. Consistent performers, so far as early surrender values go, are Norwiah Union, Standard Life and Scottish Amicable. Books Page 228