You may have been thinking about what to do with your plan, this section will help you understand the choices you have. You might also want to look at the guidance given by the Money Advice Service on their website.
- Does the plan still meet my needs?
- Can I cash in my life plan without being charged a penalty?
- Can I switch to a unit linked fund?
- Can I stop making payments but still keep my plan?
- What happens if I miss payments?
- Can I transfer my pension plan to another insurer?
- Can I sell my endowment plan?
- Can I take a loan against my plan?
- How can I get more information?
1. Does the plan still meet my needs?
Your circumstances and needs may have changed since your plan started and you should also be aware that the investment strategy of the Zurich with-profits funds has changed over the years. Your adviser will be able to help you decide whether the plan still meets your needs.
Like many other with-profits funds, the Zurich funds don’t invest in equities to the extent they did before the stock market falls in 2000-2002. Pension plans other than Esitran do not have any exposure to shares or property.
We let you know each year how the fund is invested for your plan. » Find out the asset mix that applies to your plan
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2. Can I cash in my life plan without being charged a penalty?
The guarantees on your plan apply at maturity, so if you end your plan early you won’t receive as much. However, we aim to pay a value that is fair to you and to the other policyholders remaining in the fund. There is no specific penalty for leaving early. Ask us for a value now and at maturity before you decide what to do. If you’re not sure, ask an adviser.
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3.Can I switch to a unit linked fund?
No. Unit linked funds are not available on conventional plans.
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4. Can I stop making payments but still keep my plan?
Yes. Contact us for an illustration of the reduction it will cause to your final plan value and the amount of life cover. You should note that if you decide to stop making payments to the plan, you won’t be able to restart payments at a later date.
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5. What happens if I miss payments?
This depends on your plan terms & conditions. On most endowment plans, we set up the missed payments as a loan so the full amount of life cover can continue. The loan accrues interest at 11% each year, but can be repaid at any time. If you make payments net of tax (LAPR), you can only claim this relief if you pay the outstanding amount within 13 months. Any unpaid interest is added to the loan each year, and is repaid when your plan ends. If the surrender value is insufficient to cover the amount of the loan and interest outstanding, the plan will stop without a value and life cover stops.
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6. Can I transfer my pension plan to another insurer?
Yes. We can let you know the transfer value if you contact us. Some conventional pension plans include valuable guarantees which would be lost if you transfer your plan to another provider. These include guaranteed growth until retirement date and in some cases a guaranteed rate which could give you a higher income from us than other providers. The bonus statement tells you when these guarantees are available. Make sure you understand what you could get back before transferring your plan elsewhere and take advice if you’re unsure.
You should also take account of any set up charges for a new plan. We recommend you seek advice if you are considering this option.
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7. Can I sell my endowment plan?
Some companies buy endowment plans, so it may be possible to sell the plan and receive a greater amount than the cash-in value. Other types of plan cannot normally be sold. You can find more information on the Association of Policy Market Makers (’APMM’) website at http://www.apmm.org/ or by phoning them on 0845 011 9394. If you give the plan details to APMM, they will send them to their member companies to see if any of them can make an offer better than the cash-in value.
Before deciding whether to accept any offer you should check what the relevant company’s requirements are and how long it might take for them to pay out the money. You may need to pass over the original plan documents. We strongly recommend you speak to your adviser before taking any action.
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8. Can I take a loan against my plan?
Some plans allow you to borrow using the plan surrender value as security. This allows you to maintain the life cover (less the loan and interest outstanding). The current interest rate is 11% each year and this rate is fixed for the duration of the loan. Interest is payable yearly or can be added to the loan. The loan can be repaid in full or part at any time or will be deducted when your plan ends. If you do not keep up your regular payments, your plan could stop without any value.
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9. How can I get more information?
If you want more information about the plan, please talk to your adviser or contact us – we’ll be pleased to help. If you haven't got an adviser, here are details on how you can find one.
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The Questions you may have about your plan section may help to answer some questions you may have about your plan.
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