It would appear that customers with unitised With Profits policies have fared better than conventional with profits policyholders this year.
The bonuses announced by Royal & Sun Alliance show a drop of 0.5% across the range of unitised With Profits policies. For example, if the bonus declared in 2001 was 5%, in 2002 it will be 4.5%. If the bonus declared in 2001 was 4.5%, in 2002 it will be 4%.
However, policyholders of conventional or traditional With Profits policies have seen bonuses halved this year. Conventional With Profits policies have two bonuses - one bonus on the basic sum assured of the policy and one bonus on any bonuses that have already been allocated to the policy. As an example, in 2001, Royal & Sun Alliance paid 1.5% bonus on the amount of the basic sum assured and 4% on any bonuses already allocated to the policy. Following this through into 2002, the bonus on the amount of the basic sum assured has been halved to 0.75% and the percentage payable on bonuses already allocated to the policy has been halved to 2%.
Alternatively, if you would like to find out more on with profits visit the section in Life Cover Adviser.com.