My father has four life assurance / savings policies. The charges are high compared to today's rates. My query is should he cut his losses now, or keep them?
Eagle Star (3 policies)
3% bid-offer spread
40% allocation rate in year 1, and first year of any increase in premium
60% allocation rate in year 2, and second year of any increase in premium
100% allocation rate in year 3 onwards
Annual mgt charges = 0.25%
Policy fee = £2 per month, increasing with CPI.
Combined premia = 7.35% of salary, about 5000 pa. Increase annually.
Life cover = 56,000 approx
Cost of life cover = NIL (as fund values > life cover)
Canada Life
1. Initial management charge (bid-offer spread) = 5%
2. Annual management charge 6.75% on initial units (first 2 years premium)
0.75% on accumulator units
3. Policy fee initial = IRL 19.20 p
2003 = euro 39.62
4. Cost of life cover 2003 = 565.09 (36% of premium)
Life cover = 85k.
One option would be to buy pure life cover, say 100k over 10 years for 77pm, and encash all the policies and re-invest into a low-cost Quinn Life or similar fund?
Eagle Star (3 policies)
3% bid-offer spread
40% allocation rate in year 1, and first year of any increase in premium
60% allocation rate in year 2, and second year of any increase in premium
100% allocation rate in year 3 onwards
Annual mgt charges = 0.25%
Policy fee = £2 per month, increasing with CPI.
Combined premia = 7.35% of salary, about 5000 pa. Increase annually.
Life cover = 56,000 approx
Cost of life cover = NIL (as fund values > life cover)
Canada Life
1. Initial management charge (bid-offer spread) = 5%
2. Annual management charge 6.75% on initial units (first 2 years premium)
0.75% on accumulator units
3. Policy fee initial = IRL 19.20 p
2003 = euro 39.62
4. Cost of life cover 2003 = 565.09 (36% of premium)
Life cover = 85k.
One option would be to buy pure life cover, say 100k over 10 years for 77pm, and encash all the policies and re-invest into a low-cost Quinn Life or similar fund?