Investing takes risks with it ?? s. In the years that share prices only looked up to, there are many investment insurance policies. Should you remain in shares after a beating on the stock market?
In the last ten years to 2008, investment insurance went like hot cakes. For example, they were much closed as pledged policy on a mortgage. The consultants were promised mountains of gold with a little note that the value in the policy could also lower by falling share prices. In order to achieve a highest possible return was chosen to the contributions paid after deduction of costs and risk death fully invested in equities. Due to a sharp decline in equity prices in 2008, the value in the policy has dropped sharply.
Due to disappointing consumer prices were also opposed to the high costs that insurers charge brought against the policyholder. Partly because consumer program Tros Radar attention was paid to the very high costs which were passed on to the customer. Insurers have policyholders to compensate for the high costs that are charged in the past.
If you later regret the choice of investing, you can switch during the term of the insurance to a form of investment with less risk ?? s are applicable. By opting for bonds instead of stocks decreases the chance of a negative return strongly. A disadvantage is that by switching the chances of recovery of the share prices goes wrong. The choice is highly dependent on factors such as the residual maturity, the investment objective and the need to achieve the intended capital.
It is not always possible to switch to a fixed rate fee. Investment insurance offer because in many cases the only possibility of investing in. The risk ?? s may well be limited by switching to bonds, but a fixed rate will not succeed. The policy will terminate and the value transfer to another form of insurance or to the bank saving is possible in some cases. After April 1, 2013 will expire this option pledged investment insurance. From that date it would no longer be allowed to modify the mortgage to another mortgage. The only option is to pay the mortgage to convert to an annuity or a linear mortgage.
It is questionable whether it is at all possible to end the investment insurance. If the policy is pledged to the mortgage bank, the bank should give permission to buy out the policy. This they usually do not, because the value of the policy is a piece of collateral for the mortgage loan. If it is allowed, there are options depending on the insurance form. An annuity can only be bought under strict conditions and with an endowment may be unwise to buy off. You are going to miss a recovery on the stock market, but on the other hand, the stock market can still come down once sharply. Before you surrender, you must first obtain information from your advisor. This may explain the consequences of surrender to the relevant policy.