Trying to make sense of Market Valuation Reduction

Carlo17

Don't know if this is quite in the right section for discussion, but I can't find any other heading more appropriate on the forum at the moment.

I invested a lump sum with a large, well known and reputable insurance company in 1999. It is a With Profits policy, and when I took the policy out the agent infomed me that:

a) This was a low-medium risk policy that went in for steady growth (True!)
b) Should I wish to redeem the policy sometime in the future, I may have to pay a Market Valuation Reduction fee (MVR). This would " normally " be in the area of several hundred pounds. (Whch gullibly I believed to be true!)

I now need to redeem my money, and upon enquiring today have been informed that the MVR is in the order of £3600. This seems unbelievably excessive, and verging on the obscene. It seems that Insurance companies can simply charge what they like for people to get their money out. Is there any way I can challenge this enormous sum for withdrawing my own money? The company say that is the fee for withdrawal are not willing to discuss the matter. I'm talking here about a total policy value of a few tens of thousands of pounds, not hundreds of thousand of pounds.

Anyone had this problem before, and got any advice?

Cheers

Carlo17

dunstonh

This seems unbelievably excessive, and verging on the obscene.

You dont say how much you invested but MVRs are typically in line with the losses incurred on the underlying fund.

Is there any way I can challenge this enormous sum for withdrawing my own money?

No. Its a fair charge when you understand the mechanics. Not well liked but it is fair.

Most MVRs have only just been charged in the last month after clearing them a few years back after the dot.com crash. You could wait until market conditions improve or find out if there is an MVR free exit point. Some companies had these on the 5th or 10th anniversary (the latter may be close enough for you if it exists).