Are there any changes to Terms and Conditions?

What has changed?

The original terms and conditions of the Easy Save and Vision contracts gave the policy holder the opportunity to decide to extend their premium payment term when they reached the end of their current payment period.

As part of the of the conversion programme, this option has been removed.

Why was the option being removed?

Firstly, this is not an option that is widely used by With Profit holders, but if the option were retained, provision would need to be made for all those that could take it up, to do so if they chose.

Because we don’t know in advance who will take up the option, it introduces uncertainty into the calculations of how much of the unallocated value can be shared out.

This uncertainty therefore needs to be reserved for (money is held back), so that benefits could be paid on the new premiums if someone chose to extend. The result of that reserving is to reduce the amount of unallocated value that is available for distribution to all With Profit policy holders

How was the decision made?

Only a subset of With Profit customers would benefit from retaining the option to extend, and even then, a large number would not take the option up. Whereas all members benefit from the distribution of unallocated value.  So it was concluded that it would be a fairer and more valuable outcome for the With Profit policy holder group in total that the option be removed so that bigger uplifts and/or bonus rates could be applied where appropriate.