Guaranteed Terms

When you surrender a policy or transfer a policy to another provider, there are a number of factors which will affect the value you receive.

Before making decisions about your pensions and savings, we suggest you contact an Independent Financial Adviser. You may be charged for the advice given.


Date of Surrender or Transfer
Certain plans (for example, Personal Investment Plans and With-Profits Bonds) allow surrender on guaranteed terms at times specified in the policy documentation. If you wish to surrender the plan on a date on which guaranteed terms apply, the Society must have received all the items set out on the previous page on or before that date. The surrender value will then be calculated as at the date on which guaranteed terms apply.

Where there are no guaranteed terms for surrender, or when guaranteed terms do not apply, the amount payable will be calculated on the basis in force on the day the Society processes the surrender.

For pension policies, guaranteed terms apply only at retirement or death. This is the case for the majority of pension providers in the UK.

Guaranteed Terms for With-profits life policies

• For Regular Savings Plans, full surrender on guaranteed terms applies on the 5th policy anniversary and on every policy anniversary thereafter. There are no guaranteed terms for partial surrender.
• For Personal Investment Plans, full surrender on guaranteed terms applies on the 10th anniversary and on every 10th anniversary thereafter. Terms for partial surrender are guaranteed on every policy anniversary provided that the surrender does not exceed 5% of the total contributions paid.
• For With-profits Bonds (Series 1 - effected between 18 July 1988 and 5 February 1989), terms for full surrender are guaranteed on the 10th anniversary and on every 5th anniversary thereafter. Terms for partial surrender are guaranteed on every policy anniversary provided that the surrender does not exceed 10% of the total contributions paid.
• For With-profits Bonds (Series 2 - effected after 5 February 1989), terms for full surrender are guaranteed on the 5th policy anniversary and on every anniversary thereafter. Terms for partial surrender are guaranteed on the fifth policy anniversary and on every anniversary thereafter, and on every anniversary prior to the fifth anniversary provided that the surrender does not exceed 5%.

Drawdown Transfers
The transfer from a with-profits Equitable Managed Pension to take deferred benefits with another provider is a non-contractual event, and a financial adjustment will apply accordingly.

Financial Adjustment
Currently, when guaranteed terms do not apply, the with-profits encashment value will be reduced by a financial adjustment. The purpose of the financial adjustment is to protect the interests of continuing policyholders, and to reflect the difference between the returns added to the with-profits benefits and those actually earned on the underlying with-profits assets during the term of the investment.

Income Tax on Life Policies
Encashing a policy may constitute a chargeable event, which may in turn result in a chargeable gain which is subject to income tax.