As bonus announcement season commences, Clerical Medical have been one of the first to declare. The announcement made includes notice that final payouts and regular bonuses on with profits policies have been reduced. Regular checks of bonuses will be made and further adjustments may come if the stock market continues its downward slide.
In terms of basic bonus cuts, mostly across the board there will be a 1% cut. For example, if last years bonus was 4%, this years will be 3%. For final payouts changes have been made although exact figures will be on a case by case basis. For those of you with investment bonds, if they were taken out in 2003 there will be no reduction in the final value. However, for investment bonds taken out during 1999 and early 2000 the reduction could be 25% of the policy value. For investments taken out in 1995 the reduction could be around 7% of the policy value.
tip: Think carefully before surrendering your investment, especially if you stand to lose 25% of the policy value. Check before you surrender.
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