with-profits

Policy holders eligible for the Equitable Life Payments Scheme include those who hold, or have held, one or more of the following policies: Equitable Life Conventional With-Profits (CWP) policy bought between 1 September 1992 and 31 December 2000 inclusive; Equitable Life Accumulating With-Profits (AWP) policy (both individual and group scheme policies) that either started between 1 September 1992 and 31 December 2000 inclusive, or had at least 1 premium paid into it between 1 January 1993 and 31 December 2000 inclusive; and Equitable Life WPA (With-Profits annuity) policy bought between 1 September 1992 and 31 December 2000 inclusive.

INSURANCE giant Aviva announced that it has frozen or cut annual bonus rates for its 1.5 million with-profits investors.

Billions of pounds sitting in the mighty with-profits funds run by the big insurance companies were invested to build lump sums, cover mortgages or pay pensions - and many savers will be wondering why they bothered.

Legal & General (L&G), with 600,000 with-profits customers in a pounds 14 billion fund, says its fund grew 1.7% in 2011; it is maintaining annual bonus rates on its endowments (to reduce potential shortfalls for homebuyers) but has cut bonuses on most bonds and pensions.

A further 37,000 with-profits annuitants, who are trapped at the society, will be compensated for their losses in full, with the money paid in regular instalments for the rest of their lives.

WITH-PROFITS policies are struggling to hold their own against other types of investment, research has revealed.

AN army of small investors will soon be looking for a new home to store their billions of pounds of savings, as they grab the chance to withdraw money from poorly-performing with-profits bonds without paying a penalty.

More than 400bn [pounds sterling] is invested in with-profits life insurance.

Bosses blame stock market turmoil for cutting the final bonus paid on with-profits policies, reducing their maturity value by, typically, five to nine per cent.