Advice on RNPFN MONEY BUILDER

Depressed

Hi

I started a MONEY BUILDER POLICY with RNPFN in september 1986, premium 10 pounds monthly. As is by now common knowledge, RNPFN ( now Liverpool Victoria ) has been doing so badly since 2002, that I would like to " get out ".
My policy only matures in September 2018, so what are my options if I want to " cut my losses " with RNPFN?
What kind of policy is Money builder anyway?
Is it true the tax credit has been removed ?
Is it worth cashing in / surrendering my policy at this stage? or
Keep paying in until maturity date and hope for the best pay out then ?
Can I stop further premium payments effective immediately and still let the policy ( with premiums already invested ) run until maturity ?

I am grateful for any advice, thank you.

dunstonh

What kind of policy is Money builder anyway?

Probably an industrial branch endowment.

Is it true the tax credit has been removed ?

You have never benefitted from LAPR tax relief as you took it out after it was abolished (only just). If you had taken it out when LAPR was still available then you would have kept it.

Is it worth cashing in / surrendering my policy at this stage? or
Keep paying in until maturity date and hope for the best pay out then ?
Can I stop further premium payments effective immediately and still let the policy ( with premiums already invested ) run until maturity ?

We would need figures and facts to compare these options

Depressed

dunstonh wrote: »

Probably an industrial branch endowment.


You have never benefitted from LAPR tax relief as you took it out after it was abolished (only just). If you had taken it out when LAPR was still available then you would have kept it.



We would need figures and facts to compare these options

Thanks for your quick reply. Here are some figures available.
Sum assured or cash option on maturity 5022.00 pounds
Total Annual Bonuses added to date 4007.24 pounds
I have since wrote to Liverpool Victoria to state me the surrender value of my policy if I were to surrender my policy this month, still waiting for their reply. My questions meantime are:
How do insurance companies calculate the surrender value of any policy? Policy just states that the bonus is paid oo maturity date of policy, and in the event of policy surrender the value of the bonus will be reduced.
Is there a fixed formula/guidelines they have to abide to ( eg. set up by the Financial Services Authority /office of fair trading or similar watchdog body? )
How does one know one has not been " ripped off " by these financial sharks"

dunstonh

How do insurance companies calculate the surrender value of any policy?

It varies with the different companies and the version of contract you are on. You can make no assumptions on the many different ways.

There is no standard or rules they have to operate to as it is a contract and the terms of the contract were agreed at the outset. Whilst modern contracts are far superior (little or no penalties for example) this contract is old and it pre dates regulation as well.

How does one know one has not been " ripped off " by these financial sharks"

They are not sharks and you have not been ripped off. Its an old fashioned policy from decades ago that is very obsolete by todays standards but was the norm back then. They used to do very well but changes in the economy from boom/bust high inflation to steady low inflation along with increased solvency requirements basically killed these off around 10 years ago.

Remember you bought this over 20 years ago. How many contracts you entered into 20 years ago are still running or how many items you bought 20 years ago do you still use? This is one of the reasons modern contracts are more flexible and dont tie you in for long terms and can easily be switched.

Depressed

Hi Dunstonh

Sorry for the delay in replying. Here are the figures as requested by you.
Sum assured/guranteed cash sum on maturity = 5022 pounds
Bonuses added to date = 4007 pounds
Surrender value of policy 27/3 = 6016 pounds
Projected policy value on maturity August 2018= 16, 342 pounds

What is the best course of action? Thanks for help

Depressed

dunstonh wrote: »

Probably an industrial branch endowment.


You have never benefitted from LAPR tax relief as you took it out after it was abolished (only just). If you had taken it out when LAPR was still available then you would have kept it.



We would need figures and facts to compare these options

Hi Dunstonh

I have the figures you requested. What do you think? To cash in or not to cash in.