We currently try to deal with all enquiries as quickly as possible and always aim to respond within 10 - 20 working days.
Generally, for a cash in value, we use the price on the day we receive your valid instruction.
For a final pay-out, we use the price on the final pay-out date. However, some individual policy conditions may vary from this.
The reason we request policy documents is so that they are no longer available for use as security for loans. If you are making a claim and sign the discharge form that you cannot find the policy document this will not hold up your claim. If you require a copy for information purposes then we can provide this.
You should seek legal advice as to the best way to protect their interests. This may include considering a Trust, Power of Attorney or assignment of the benefits.
We typically send these out around 6 weeks after the end of the tax year - so in mid-May.
Bonus updates are usually sent out in June each year.
A with-profits policy is designed to provide a benefit at some future time. This might be at the end of a fixed period - for example 25 years after the policy started. It might provide the benefit when you reach a certain age - perhaps 60 or 65. It might only provide the benefit when the life assured dies. There are two types of with-profits policies conventional with-profits policies and unitised with-profits policies.
Some policies provide a lump sum in cash when the policy benefit is due. If you would like to know exactly what benefit your policy provides, you can use one of the methods set out in the contact us page.
In order to receive the benefit, you pay us premiums. Most policies have regular premiums paid every month, but some have other ways of paying premiums. Some policies originally had regular premiums, which have now ceased.
In exchange for paying the premiums, a conventional with-profits policy promises a minimum guaranteed benefit - called the 'sum assured' or 'guaranteed benefit'. The unique feature of a 'with-profits' policy is that bonuses can be added to this minimum guarantee as the policy progresses.
With a unitised with-profits policy, your premiums purchase units in the fund at the unit price. Some policies guarantee that the unit price will increase at a minimum rate. Bonuses are added to unitised policies by increasing the unit price, and thus the value of your units.
They are additions to the benefits that are paid under the policy and are the way in which your policy shares in the profits of your Utmost Life and Pensions with-profits sub-fund.
They can either be annual (reversionary) bonuses or final (terminal) bonuses.
A reversionary bonus may be added to the policy annually. Once added it cannot be reduced or taken away. However future bonus rates are not guaranteed and can be changed or removed at any time.
The annual bonuses will be paid in full on the maturity or contractual retirement date of your policy or on earlier death, provided you have paid all premiums due and have not altered your policy.
A final bonus is an additional bonus which may be paid on termination of the policy. This bonus is not guaranteed and can be changed or removed at any time.
A proportion of the annual and final bonus is also paid on the early termination of any life or pension policy when taking the proceeds or, for pension policies, when transferring them to another provider. The amount is determined when the event occurs.
Final bonus is also allocated to unitised with-profits policies by an increase in the unit price. As final bonuses are not guaranteed to remain unchanged, this means that part of the unit price is not guaranteed, and thus the unit price may be reduced in future.
At the time the business was transferred from Hearts of Oak to Reliance Mutual, with-profits benefits under conventional policies in WPSF 6 were re-structured. A portion of the guaranteed benefits was replaced by a special final bonus. This special final bonus is not guaranteed. The purpose of the benefit restructure was to improve the security and financial prospects of the fund, for the benefit of all policyholders.
Annual and final bonuses attaching to pensions policies are paid in the same manner as the basic benefit, that is as an addition to the basic guaranteed pension, open market option, cash payment or transfer value.
Life assurance policies receive the guaranteed sum assured together with any annual and final bonuses in cash when a claim arises or on the policy maturity date (if any).
The amount of bonus depends on the progress of the underlying fund in which premiums are invested. This depends mainly on the returns earned from the assets in which the fund is invested. Profits from all the business written in the fund are available to be distributed as bonuses.
In setting bonus rates, returns can be smoothed so that large short-term fluctuations in investment values are not reflected in payments. The aim is that policy benefits will be broadly similar year on year. Smoothing reduces the risk of you receiving a low payout if investment markets are low when your benefit is due to be paid. In exchange you won't receive the full benefit if investment markets are high.
The amount of total annual bonuses accumulated so far is shown on your Bonus Update. Bonus Updates are usually issued in May each year for most policies.
Annual bonuses increase the guaranteed benefits under with-profits policies. Annual bonus rates do not change often. When there is a need to change rates we introduce changes gradually, so that any change from year to year is small.
Final bonuses are used to determine the overall level of policy payouts. Final bonus rates are reviewed twice a year and changed on 1 April 2020. The following figures compare the payouts from 1 April 2020 with those payable on 1 October 2019. Final bonus amounts are not guaranteed and can be changed at any time.
WPSF1: payouts have reduced by 14% for most policies
WPSF2: payouts have reduced by between 1.9% and 11.5%, depending on policy start date
Past performance is not necessarily a guide to the future.
Your premiums are combined with those from all the other policyholders in your sub-fund and are invested in a wide range of securities including:
The expenses charged to your with-profits fund are on a basis that was established at the time the fund was transferred to the Company (or to Reliance Mutual) and are subject to inflationary increases.
If you are unable or do not wish to continue paying premiums to your policy, it is normally possible for a cash value to be paid on a life assurance policy. If you cash in your life policy you will no longer retain this life cover and therefore should consider if you have, or need any other suitable life cover in place. Under a pension contract, it is not normally possible, under current tax rules, for a cash value to be paid if you are aged under 55, although you can transfer the value of your policy to another pension provider. If you are aged 55 or above then it is possible to access your pension fund benefits.
When we calculate early termination values, we try to treat policyholders terminating on a basis that is consistent with and fair to those policyholders who remain in the fund.
For unitised with-profits policies the early termination value is the value of units allocated to the policy. This value may be reduced by a market value reduction factor ("MVR"). MVRs are designed to ensure that policyholders leaving the with-profits fund receive a fair share of the fund, and neither advantage nor disadvantage the remaining policyholders. At times it is not necessary to apply an MVR.
When WPSF3 and WPSF5 were established in 2004 and 2007 respectively, the High Court agreed to arrangements that enabled the sub-funds to be wound up once they had declined to less than a certain size. We decided to wind up WPSF3 and WPSF5 with effect from 1 October 2013, as the trigger points for wind up had been passed. We felt that the risk of a small fund having significant and frequent revisions to bonus rates was high and that it would be advantageous to policyholders to have certainty as to the amount their policies would pay out.
We therefore replaced the non-guaranteed and uncertain future bonuses on the with-profits policies in these sub-funds with a guaranteed policy value. Having done this there is no need to keep a separate fund of assets and liabilities as all policy payouts are guaranteed by Utmost Life and Pensions as a whole. WPSF3 and WPSF5 were therefore merged with our main non-profit sub-fund, the Ordinary Sub Fund (OSF).
With-profits policyholders in WPSF3 and WPSF5 have been advised of the guaranteed benefits now attaching to their policies.