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General
PRUFUND INVESTMENT PLAN (CLOSED WEF 03/08/09)
This option became available from 13 October 2008 and replaced the 5th Anniversary Capital Guarantee option (see details of this option below).
This is an optional feature that can be chosen when a plan is set up but cannot be added once a plan has been started nor can it be removed once a plan has started. If chosen at the out-set it cannot be varied until the end of each 5 year guarantee period. It cannot be chosen with the 3-year Early Cash-In Charge option.
ITS AIM
To guarantee the value of a plan on its fifth anniversary, and each subsequent 5 year anniversary whilst the guarantee continues to roll over, so that it is at least the amount initially invested in the plan, allowing for any income or withdrawals taken. This is known as the Guaranteed Minimum Fund Value. Withdrawals are defined as the value of units cancelled to make a payment (including any Early Cash-In Charges where applicable).
ABOUT THE GUARANTEE
The guarantee only applies on the 5th and each subsequent 5 year anniversary. If the value of a plan is below its Guaranteed Minimum Fund Value (GMFV) on its fifth anniversary, we will automatically restore the value of the plan to this amount. This will be done by adding units to the plan so that the overall value of the plan is the same as the GMFV. If the value of the plan is higher than the GMFV this higher value becomes the new GMFV for the 10th anniversary and so on for each 5 year anniversary.
WHAT IS THE CHARGE FOR THE ROLLING GUARANTEE OPTION?
A charge of 1% p.a. of the value of the investment in the PruFund Protected Growth Fund will be taken by cancelling units every month. (Before 11/5/09 - For plans starting from 13 October 2008 a charge of 0.6% of the value of the plan each year was taken by cancelling units every month). The charge starts one month after commencement and continues until the fifth anniversary of a plan. The charge will then be reviewed. We will write to the policyholders and they will have the option of opting out of the Rolling Guarantee. The charge is subject to review but once a policyholder's 5 year period has started the charge will not change.
TAXATION
If the rolling guarantee option is chosen, the policyholder should be aware that there may be additional tax implications if additional investments are made. This is because additional investments may have to be set up as new plans rather than as top ups to an existing plan. The taxation of a surrender of an investment set up as a new plan can, in some situations, be higher than that of an investment set up as a top up.
MAKING AN ADDITIONAL INVESTMENT
If the rolling guarantee is chosen for an additional investment, or a guarantee option still applies to the initial investment, then the additional investment will be set up by us as a separate PruFund Investment Plan, with its own plan number.
Our standard terms and conditions will apply to plans set up in this way, with the following exceptions:
- the minimum amount that can be invested is £1,000, rather than £5,000,
- there are no age restrictions,
- there is no monthly policy fee.
