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'With Profits' (or should that be losses) policy?

  • 04-04-2014 2:36pm
    #1
    Road-Hog
    Registered Users, Registered Users 2 Posts: 1,412 ✭✭✭


    Just wondering if the following would be typical of the above.

    I took out a Canada life 'with profits' policy in 1998, its a 25 year policy and I pay in €63.48 per month. got a letter a few days ago on the anniversary saying that the surrender value was €10 k or so despite me paying over €12k to day i.e. 16 years at €63.48 per month. My question is would this be typical of the value of such policies...............?


Comments

  • #2
    misslt
    Registered Users, Registered Users 2 Posts: 2,103 ✭✭✭misslt


    In short, yes - the surrender value of a policy is *usually* your premiums paid less any 'death costs' rolled up at interest. Your policy may be different.

    Given the state of interest rates in the last 10 years, its very possible your policy has lost value.

    Does it have a death benefit?


  • #3
    Browney7
    Registered Users, Registered Users 2 Posts: 3,100 ✭✭✭Browney7


    Is it an endowment policy? Does the policy have a guaranteed sum assures with a maturity date? There could well still be a Market Value Reduction on the policy and that if you wait till the maturity date there may be a guaranteed payout.


  • #4
    NewCorkLad
    Registered Users, Registered Users 2 Posts: 961 ✭✭✭NewCorkLad


    If there is a death benefit on the policy the charges for this could account for the loss.

    However more than likely an MVA( Market Value Adjustment) has been applied to your policy due to poor performance. This applies a penalty to the policy but only takes effect if you surrender the policy and usually cannot be applied on the normal retirement date. Call Canada Life and they will be able to tell you.


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