| Annuity: |
An income payable at specific intervals throughout life in return
for a single premium. |
| Bid/offer
spread: |
The
difference between the price at which you buy units in a fund and
the price at which your units will be sold. |
| Bonus: |
Bonuses are the method used to provide the returns for with profits policyholders. Bonuses may be 'reversionary bonus', 'special interim bonus' or
'terminal bonus'. |
| Bonus rate: |
A percentage value used in the calculation of bonuses. |
| Capital units: |
Units purchased at the beginning of a policy that have either
a higher annual management charge than usual or may be subject to a portion
of them being cancelled at regular intervals to recover expenses. |
| Critical illness cover: |
A sum payable following diagnosis by a consultant physician that
the claimant is suffering from one of a number of listed conditions. |
| Endowment: |
A type of assurance policy that will pay out a lump sum
either at the end of the selected term or on earlier death of the life or lives assured. |
| Equities: |
These are the shares of a company. The owners of the equity,
the shareholders, are the owners of the company. They share in the performance of
the company through the payment of dividends and through rises
or falls in the value of the shares. |
| Equity release: |
Allows you to release money from the value of your home. It can be a good way to supplement your income if, like many people, you are 'property rich but cash poor'. |
| Financial Ombudsman Service (FOS): |
Set up under the Financial Services & Markets Act 2000 to deal
with complaints against authorised persons about regulated activities.
Authorised firms have to inform complainants of their right to
refer their complaint to the FOS. The object of the FOS is to resolve
disputes quickly with the minimum of formality. |
| Financial Services Compensation Scheme: |
Established under the Financial Services & Markets Act 2000 to compensate
claimants where authorised persons (or their Appointed Representatives)
are unable to satisfy claims against them in connection with regulated
activities. |
| Fixed interest stocks: |
Another name for bonds or gilt edged securities (gilts) which
pay a fixed level of income over a set period of time. The value can fall as
well as rise with interest changes. If interest rates rise values
fall and vice versa. |
| Flexi groups: |
A group personal pension plan designed to accept variable contributions for people with earnings which are not the same each month. |
| Free standing AVC: |
Free Standing Additional Voluntary Contribution policies
provide additional pension benefits for those who are already members of a company
pension scheme. They are set up separately from the main company
scheme with an insurance company, building society or other provider
that you choose. |
| FTSE™ 100 Index: |
Financial Times Stock Exchange 100 index. It tracks the
performance of the top 100 UK companies by market value.
(FTSE is a registered trade mark of the London Stock Exchange plc and the
Financial Times Limited.) |
| Fund switch: |
This is when you change the fund(s) in which your money is invested.
Units are sold in one fund and the money is used to buy units in
another fund. |
| Gilts: |
A term for bonds issued by the British Government. The bonds usually
pay a series of fixed amounts followed by repayment of a lump sum
at the end (see fixed interest stocks). The original certificates
had a gold edge around the paper which is why they were called
Gilt Edged Securities or Gilts. |
| Group money purchase scheme: |
An occupational pension scheme set up by an employer for the benefit of their employees. |
| Guarantee period: |
An annuity, which continues to pay an income for five years. If you die before the end of the guaranteed period we will pay the annuity for the remainder of that period. |
| Guaranteed Annuity Rate (GAR): |
Annuity rates move in line with market conditions but where your policy includes a guaranteed annuity rate we will calculate your pension using the better of the guaranteed annuity rate and our current rate. |
| Higher rate taxpayer: |
Those who pay tax on their income at the higher rate set by the Government. |
| Index linked: |
Values are linked to the rate of the Retail Prices Index,
the Average Prices Index or other such official indexation figures. |
| Individual Savings Account (ISA): |
A type of savings plan introduced on 6 April 1999. It allows savings
in cash, equities and life assurance policies or any combination
of the three. You do not have to pay tax on the income you get
from them or any gain you make when you sell them. There are limits
on how much you can invest in an ISA each year. |
| Initial units: |
Units purchased at the beginning of a policy that
have either a higher annual management charge than usual or may be subject to a portion
of them being cancelled at regular intervals to recover expenses. |
| Intermediate customer: |
A client who is not a market counterparty, but is:
- a local or public authority;
- a company listed on a recognised stock exchange;
- a company which has share capital or net assets of at least £5
million;
- a partnership which has net assets of at least £5 million;
- a trustee of a trust (other than a pension trust) which has assets
of at least £10 million;
- a trustee of a pension trust with at least 50 members and assets of
at least £10 million
|
| Investment bond: |
Single premium investment with no fixed end date. You may be able to invest
in a range of different funds. |
| Investment manager's fee: |
A monthly charge to pay for the professional management of funds. |
| Life cover: |
A sum payable on death during the term of the policy in return for
a premium which is paid either in regular installments or as an
annual premium. |
| Market counterparty: |
A client who is:
- a government of a country;
- a central bank of a country;
- various other state or supranational bodies;
- another authorised firm.
|
| Market Value Reduction (MVR): |
This is used in connection with with profits policies or unitised with
profits policies. It refers to a discretionary adjustment made
to the value of the policyholder's fund when a payment is made
if the underlying value of the investments is low. Generally this
is not applied at maturity or on death. |
| Maximum annual withdrawal amount: |
The maximum income that you can take from either an ASP or a USP. |
| Minimum annual withdrawal amount: |
The minimum income that you must take from an ASP. |
| Partial withdrawal:
|
Surrendering a number of units held within the policy to realise a lump sum. |
| Permanent health insurance: |
A means of providing protection for your income should you become
incapable of working due to ill-health in the future. |
| Personal pension: |
Personal Pensions are savings policies for retirement for individuals. They
are able to receive regular and single contributions from those
who are employed, self-employed, or from an employer. |
| Policy fee: |
A monthly charge to pay part of the costs of setting up and maintaining
your policy. This may be paid for directly out of your premium
or deducted from your funds within the policy. |
| Policy loan: |
A loan against the assets of the policy. You will
normally be charged interest on the loan. The loan is repayable before or at the time
of maturity. |
| Premium: |
The amount of money you pay for the benefits under a policy. |
| Private customer: |
A client who is not a market counterparty or an intermediate customer. |
| Profile fund: |
The Windsor Life fund name under which funds with the same objective,
from the different companies that Windsor Life has taken over,
are grouped together. |
| Redirection: |
Where you decide to change your investment choice and
invest your future premiums into a different fund. |
| Regular withdrawals: |
A series of payments made to you by taking money out of your policy. |
| Reinstatement: |
Term to describe re-starting a plan or a policy. |
| Retail prices index (RPI): |
An
index used to measure the cost of living. The index is calculated
monthly by the Government's Central Statistical Office. |
| Retirement protection option: |
Available on certain personal pension plans. It helps protect you from the effects of significant changes in the stock market and interest rates near to retirement. We do this by moving your money away from unit-linked funds into lower-risk funds like our Fixed Interest and Deposit based investments. |
| Reversionary bonus: |
A bonus added on each anniversary of a with profits
policy that once added cannot be taken away in the future.
|
| Review: |
A review of the underlying investment performance to see if the policy
benefits can still be supported on the current terms. The review
will take into account the current position of the policy, which
reflects past performance, and also makes assumptions about future
performance. |
| Special interim bonus: |
A bonus added for the time between a reversionary bonus being added
and a terminating event taking place such as death of the life
assured before the maturity date. |
| Stakeholder pensions: |
A personal pension plan introduced on 6 April 2001. It has a low
minimum contribution and a maximum annual charge of 1%. There are
no penalties for stopping or suspending contributions or for transferring
the fund to another provider. It has the same rules as a personal
pension for buying an annuity. |
| Surrender value: |
The value of the policy that is paid to you if you decide to cancel
your policy. |
| Switching: |
Changing where you invest your money from one fund
to another. Some or all of the units are sold in one fund and the money is used to buy
units in another fund of your choice. |
| Term assurance: |
Life Assurance fixed for a selected term. The policy
provides a lump sum benefit on death only and has no value at the end of the selected
term. |
| Terminal bonus: |
A type of bonus added at the end of a policy the value of which is at the discretion of the company. It is a reflection of the company's investment performance over the life of the policy and cannot be
guaranteed. |
| Tracker: |
A fund that seeks to track a specified market in achieving growth
within the fund. |
| Transfer: |
To move funds built up with one company to the care of another. |
| Underwriting: |
Looking at the risks associated with an application to see if the policy
can be on the normal terms or if an adjustment needs to be made.
The adjustment could be a change to the terms under which cover
is provided or a change to the cost of providing cover. |
| Unit trusts: |
A pooling together of investors' money to buy shares (equity) in
different companies dependent on the type of market area. For example,
European will invest only in companies in Europe. |
| Unitised with profits: |
A cross between a with profit policy and a unit linked policy. Your
money buys units like any other unit linked policy but the investment
returns are based on the performance of the with profits fund.
There may be a Market Value Reduction (MVR) applied in certain
circumstances. |
| Unit-linked fund: |
Premiums are invested in your selected fund along with other policyholders'
money. The fund is divided up into units and each investor buys
units with their premium to reflect their share of the assets of
the fund. The value of each unit is shown by the unit price which
varies from day to day. |
| Unsecured pension (USP): |
A policy which allows you to take an income from it without purchasing an annuity. The income allowed must be below the limit set by the Government Actuary's Department. |
| Volatility: |
Term to describe how much and how quickly the unit fund prices change
due to market forces and events. Greater volatility means the price
may be expected to move around more and more often. |
| Whole of life: |
A type of policy that will pay out a lump sum on the death of the
life or lives assured. Premiums are paid for the whole of the life
of the policyholder or to a set age. If taken to a set age the
premium will normally cease but the benefit will remain until the
death of the life/lives assured. |
| With profits: |
Your money is pooled with other investors' money to form a With-Profits Fund. With-profits is an investment that smoothes out the return
on your money. We spread out the gains and losses from the investments
of the fund over time and, together with other factors, this determines
the appropriate bonuses for your policy.
Windsor Life has two with profits funds - the Windsor Life With Profits Fund and the
National Mutual With Profits Fund. |
