Norwich Union’s offshore business, Norwich Union International, is to introduce a permanent version of its fifth anniversary money back guarantee on the Norwich Union International Core Funds Bond and Norwich Union International With-Profit Bond.
Norwich Union’s offshore business, Norwich Union International, is to introduce a permanent version of its fifth anniversary money back guarantee on the Norwich Union International Core Funds Bond and Norwich Union International With-Profit Bond.
The guarantee will be available via three new funds, known as the with-profit guarantee funds, from 7 February 2005. It will replace the current fifth anniversary money back guarantee special offer on the standard with-profit funds, which ends on 6 February. From this date, there will be no fifth anniversary guarantee on the with-profit funds.
The with-profit guarantee funds will be identical to the with-profit funds in all aspects except the guarantee and the management charge, which will be an extra 0.5% p.a. for the first five years of investment. It is not possible to make investments in or switch into the with-profit guarantee funds after the start date of the bond.
The feature is in addition to the tenth anniversary money back guarantee and guarantees to return the policyholder’s original investment into the with-profit guarantee fund in their bond currency, regardless of investment conditions, provided they cash-in their investment on, or within two weeks after, the fifth policy anniversary.
Paul Sherlin, marketing director at Norwich Union International, said: "With-Profits remains a hugely important market for Norwich Union International and our sales grew very strongly again in 2004. We are therefore delighted to now introduce these new with-profit guarantee funds, which include a fifth anniversary money back guarantee. When you add this to the recent announcement that we are maintaining our bonus levels for new business in 2005, we believe we are providing advisers with a very attractive and competitive customer offering."
The fifth anniversary money back guarantee does not apply if any withdrawals from the bond exceed 7.5% of the single payment in any policy year or if any withdrawals from the with-profit guarantee fund exceed 7.5% of the single payment in the fund in any policy year.
If any money, not exceeding the above limits, is taken out of the fund before the fifth anniversary through regular withdrawals, one-off withdrawals or switches into other funds, then the amount guaranteed will be reduced in proportion to the number of units cancelled. Any units cancelled to meet charges will not reduce the guarantee.
A market value reduction may apply if money is taken out of the with-profit or with-profit guarantee funds. This would reduce the quoted value of the amount taken out. This is most likely to happen following a large or prolonged fall in the stock markets or after a period where investment returns are regularly below the level normally expected.
Although an MVR could apply on, or within two weeks after, the fifth anniversary, the effect of the fifth anniversary money back guarantee is that investors will not get back less than their original payment in the with-profit guarantee funds if they remain in the fund for the whole five years and then withdraw on the fifth anniversary. In any other circumstances, the investor may get back less than they invested.
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For further information:
Norwich Union International Mike Gogan 00 353 1 802 8415
Financial Dynamics Christine Wood 020 7269 7253
Notes to editors
About the fifth anniversary money back guarantee
- The fifth anniversary money back guarantee will apply to investments held continuously from outset in the with-profit guarantee funds for five years that are withdrawn on, or within two weeks after, the fifth anniversary money back guarantee.
- The fifth anniversary money back guarantee does not apply to the with-profit funds or to units added after the start date of the bond. It is not possible to make investments in the with-profit guarantee funds after the start date of the bond.
About the Norwich Union International Core Funds Bond
- The Norwich Union International Core Funds Bond offers a carefully selected choice of funds from the most popular fund sectors, all within one bond. Its minimum investment is Ł10,000, €15,000 or $15,000 and investors can choose to put their money in a selection of funds including with-profits, equity, property, bonds and cash, which are run by Norwich Union and other industry-renowned fund managers.
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- Capital Redemption version available to suit corporate and trustee investors.
- Offers a select choice of internal and external unit linked and with-profit funds.
- Investors have the option to create their own risk portfolio or use Investment Management Selection (IMS) Fund of Funds as an alternative.
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About the Norwich Union International With-Profit Bond
- The Norwich Union International With-Profit Bond offers investment into three with-profit funds (Sterling, Euro and US Dollar) and three with-profit guarantee funds (Sterling, Euro and US Dollar). Its minimum investment is Ł10,000, €15,000 or $15,000.
Both the Norwich Union International Core Funds and With-Profit Bonds:
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- offer valuable guarantees. The with-profit guarantee funds offer money back guarantees on the fifth and tenth policy anniversaries. For investments into the with-profit funds there is a tenth anniversary money back guarantee.
- with-profit and with-profit guarantee funds are ‘reinsured’ into Norwich Union’s With-Profit Fund meaning that investors will enjoy all the benefits of a well-established With-Profit Fund from the UK’s largest insurer.
- The only tax on income and capital gains that offshore life insurance funds may suffer is some unrecoverable withholding tax that most countries deduct from dividend and interest payments. Investors may also have to pay income tax when money is withdrawn from the bond, but will have control over the timing of any withdrawals and thus any potential income tax liability. Withholding taxes vary from country to country and according to the type of investment.