Eagle Star is the latest company to suffer cuts to with profits bonus rates. But, policyholders have no idea how much the cuts will affect them.
Zurich Financial Services Group owns Eagle Star and have announced payout cuts of around 25% for Eagle Star with profits policyholders, of which there are about 500,000. They are also imposing market value reductions at around 30%. These would be imposed if policy holders surrendered or transferred their with profits policies.
The problem is that Zurich is refusing to provide accurate details regarding the performance of policies, compared to last year. In December 2002 only 16% of Eagle Star with profits endowment policies were on target with 71% highly unlikely to be on target and 13% unlikely to be on target.
Our view:
If you have Eagle Star with profits policies, take independent advice. If your policy is set to pay out a lump sum for mortgage repayment or the like, do not ignore the cuts in payouts.
You should review your situation and take advice.
Contact us for help. Why not use our discount Ask An Adviser Service.
Search the news archive for other with profits and bonus news.