Life Assurance Based Investments

Here your money is placed into Life Assurance funds. Traditionally used as regular premium plans in the form of endowments, to provide both investment and life cover for use in conjunction with interest only mortgages, they do offer benefits to certain investors.

Who do Life Assurance investments suit?

Most inexperienced investors prefer the simplicity of ISAs. But for investors with larger amounts than can be held in an ISA, higher rate taxpayers, and investors with a portfolio of different investments, these products can bring additional advantages.

For single premium investments, some products will allow higher rate taxpayers to make withdrawals from the fund now and defer your tax until a later date. For instance, when your income is no longer subject to higher rate tax.

How do they work?

When you pay into a fund with a life assurance company, this is used to buy a mixture of shares, cash and fixed interest products, such as gilts and bonds, to make your money grow. The funds you can select from typically include cash funds, property funds, fixed interest funds, managed funds, and with-profit funds.

What are the risks v returns?

Life assurance funds do give you access to the stock market, without the exposure to actually buying shares. These are regarded as long-term investments, aimed at people who want to build up their wealth steadily. 

What are the costs?

Getting advice is essential before investing into these products, as the charging structures can be complex.  Penalties may be charged for early surrender and fees may be higher at the beginning of some policies than others.

In addition, the tax situation will vary depending on the type of product, the term held for and whether you make a one off payment or contribute regularly.

Need more help?

Investing in a Life Assurance fund requires careful consideration, as it's not right for everyone. To find out whether it would deliver benefits to you as an investor, contact us today.

Unit Trusts

Open Ended Investment Companies

Investment Trusts

Individual Saving Account (ISA)

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