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 or investment bond without being charged a penalty?
- Can I cash in part of my plan?
- Can I switch to another unit linked fund?
- Can I stop making payments but still keep my plan?
- Can I transfer my pension plan to another insurer?
- Can I take regular withdrawals from my bond?
- How do 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. The funds are now invested significantly in fixed and variable interest investments and have limited exposure to shares.
We will let you know each year how the fund is invested for your plan.
Find out the asset mix that applies to your plan:
» 90:10 fund
» 100:0 fund
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2. Can I cash in my life plan or investment bond without being charged a penalty?
Zurich aims to pay a value that is fair to you and to the other policyholders remaining in the fund whenever you end your plan. There is no specific penalty for ending a life plan early. Some investment bonds have a fixed charge where withdrawals are made within the first five years of the investment.
A market value reduction (MVR) could apply if you take benefits before any MVR free date shown on the yearly statement or the bonus statement. However, we are not currently applying an MVR when investments are taken out of either of our unit linked with-profits funds. Ask us for a value of your plan now and at maturity to make a comparison before you decide what to do. If you’re not sure, ask an adviser.
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3. Can I cash in part of my plan?
This depends on the type of plan you have:
- Pension plans cannot be normally be cashed in, although it’s possible to take some of the benefits as tax-free cash when you buy retirement income. They can be transferred to other providers.
- Life plans and investment bonds were often issued as a cluster of individual contracts which can be cashed in separately. If your plan is being used as security for a loan, we would need the lender’s agreement.
- Investment bonds also allow partial withdrawals where you can take some money from each cluster. Taking money from your plan can create an income tax liability. There is a difference in the tax treatment of withdrawals between cancelling clusters and taking money from each cluster. You should seek advice if you're not sure which method is best for you.
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4. Can I switch to another unit linked fund?
Yes, you can usually move your investment into other funds. If you’re making regular payments you can invest future payments into other funds. The with-profits fund is no longer open to new money so if you switch out, you won’t be able to switch back in.
Different unit-linked funds invest in different types of assets, so you should consider the level of investment risk you are comfortable with. These funds do not smooth investment returns, so if the value of the investments fall, the value of your policy falls at the same rate. You also need to take into account the value of any guarantees you might lose. We recommend you seek advice if you are considering this option.
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5. Can I stop making payments but still keep my plan?
Yes. Plan administration charges and the cost of providing any life cover or other plan benefits would continue to be met by cancelling units. This may mean your final plan value could reduce and eventually stop without a value.
If you wanted to restart payments, the with-profits fund would no longer be available. For life plans, restarting payments would only be allowed within 13 months if you repaid all the ones missed.
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6. Can I transfer my pension plan to another insurer?
Yes. On yearly statements we tell you what the transfer value is at that time. Values aren’t guaranteed and can change daily. If you transfer your plan on the selected retirement date any market value reduction would not apply. Your selected retirement date is shown on the yearly statement or the bonus statement.
Some pension plans started before 1996 may incur a charge if you take benefits or transfer your plan earlier than the date you selected. On these plans, the plan charges were high in the early years and the amounts allocated to plans from regular payments increased in later years. Ask us for illustrated maturity values and make sure you understand the value of guarantees before you decide to transfer.
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 take regular withdrawals from my bond?
Yes. We can make regular payments from your investment bond either as a fixed amount or as a percentage of the bond value. Withdrawals greater than 5% of the amount(s) invested may create an income tax liability. Your yearly statement tells you whether or not we might apply any MVR. Find out about setting up a regular withdrawal.
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8. What do I do if I need advice?
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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