Making Your Choice

Policyholder 2

Policyholder 2 made a single payment for the policy.

- This decision is not straightforward

- As set out below in the diagram, future special distributions could be more than the offer.

- Under the ‘base case’, with an estate value of £1.2 billion, it could take until 2024 for possible special distributions to equal the amount of the cash offer being made

- Also, we have varied the amount of the special distributions we calculate could be paid in future. The illustration shows the effect of special distributions being 25 per cent higher in each year in which they occur

- When we do that the possible special distributions could be more than the current cash offer under some circumstances by around 2016 (with an estate value of £2.1 billion) or 2023 (with an estate value of £1.2 billion)

- Under these circumstances the policyholder should consider his or her own personal circumstances and, in particular, whether it is preferable to have a firm amount of cash now as opposed to what is a possibility of a larger bonus added to the policy in future

If you are in any doubt about what you should do please consider taking independent financial advice.