SOS Helpline
 Are you paying too much for your savings?
We come across a truly alarming number of cases of people who have bought
long-term savings plans (15-25 years) from offshore life companies when they
may be unable, or do not intend, to save for the full term of the policy.
Sometimes the amounts being contributed are substantial. In many cases they
have been told by the salesman that they can stop whenever they like
"without penalty". This is a serious distortion of the truth.
The longer the term, the greater the salesman's commission (paid
up-front) and the greater the initial charges that are deducted from your
investment to pay it. These charges are all recovered through a special type
of unit issued in the early years called capital (or initial) units, and the
longer the term the more of them you will get. Capital units are priced
differently and grow more slowly than standard (accumulation) units.
If you stop a long term plan after just a few years, most of your units
will be capital units, and you will have few accumulation units. You will
see little growth from then on, and will certainly be very dissatisfied with
your return.
The golden rules
Never commit to a
long-term plan unless:
-
You will not need the money at the first emergency
-
You both need and intend to save for the full term
-
You are sure that premiums will be within your means for the whole term
-
There are other advantages, such as tax benefits or spectacular terminal
bonuses that favour a long-term commitment.
If you cannot meet
these criteria, go for a
short term plan instead.
Nearly all the companies that offer long-term savings plans also offer
much better short term ones without capital units, where you are not
penalised if you stop saving. They are perfectly adequate for long-term
saving as well, but if the salesman gets far less commission on them, they
are rarely mentioned.
We have seen so many cases recently where the wrong plan has been sold
that we have set up a helpline for those affected.
If you have bought such a long-term plan and feel that you may have been
misled, we may be able to help you to renegotiate a better deal. Many
offshore companies will be unwilling to see such cases referred to their own
regulators and some pressure can be brought to bear.
To access the Helpline,
please contact us at
00 32 (0)2 686 1671
to discuss your situation.
|
