Each year the actuaries at the life office review the growth made by their investments and they then apportion the profit to all the policies in force at the time, by way of declaring bonuses which are then permanently attached to the policies. In effect, the owners of the policies are participating in the profits of the life company.
Most people take an endowment policy to cover their dependants during the financially demanding years. They then cash the endowments when they retire since their dependants have established themselves and need no more protection.
They can then use the surrender value plus other bonuses to finance
other things of their own. An Endowment policy gives the holder a return on their premium payments, through an endowment in their own lifetime unlike a whole life insurance which pays the beneficiaries.
An Endowment policy is the best form of insurance for a person with
dependants since it protects the dependants from financial risk in case of death and at the same time pay back the insurance amount when the risk is done with.
Other benefit includes:
• No binding period, the party insured can cancel the policy when he wishes.
• In the event of death, the value of the deposit is paid out +1%, i.e. 101%.
• The customer decides on the actual investment strategy and in which bank the money/deposit is to be managed.
• Several deposit managers can be chosen for a policy.
• Policies can be set up in CHF, EUR, GBP, SEK, NOK and DKK.
• Investments can be made in various securities, including shares, bonds, investment, funds etc.
• Borrowing can be arranged against the policy, which can thus be used actively as security for new deposit/commitment.
• No EU interest tax on the yield.
• No or minimal capital and/or inheritance tax.