How to review an investment-linked policy you’ve held for years

Start with the question you want answered

Are you unsure what your policy covers, concerned about its value, or wondering whether the premiums still fit your budget? Start with that question. You do not need to decide whether to keep or surrender the policy before we speak.

I can help you organise the information and compare your available choices against your current priorities. Any recommendation should reflect your actual contract and circumstances.

Identify the job the policy is doing

Is the policy mainly providing protection, building long-term capital, or doing both? Compare that purpose with your current needs. An arrangement started before marriage or children may now have a different role.

Make a simple inventory: benefits, premium commitment, current fund allocation, policy value and surrender value. Record withdrawals and any premium breaks too.

Understand what you are paying for

Depending on the contract, charges may include insurance costs, administration, fund management and surrender fees. Insurance charges commonly increase with age and may be funded by selling units. Ask for the charges applicable to your actual policy rather than a newer product brochure.

A premium holiday is not necessarily a cost holiday. Check whether ongoing deductions continue and whether the remaining units can support the policy.

Separate policy performance from fund performance

Compare contributions, withdrawals and current value using their actual dates. A simple “value minus premiums” figure does not measure the annualised return when premiums were paid over many years.

Fund returns and the return you receive from the policy can differ because of allocation rates, charges, insurance costs and the timing of cash flows. Ask for both views and the assumptions used.

An S&P 500 chart is an index illustration, not your policy return. Compare holdings, currency, cash-flow timing and total costs before using it as a benchmark. Read investing now versus waiting for the limits of historical market-timing examples.

Review the holdings and your time horizon

Check whether your selected funds still suit your goals, risk tolerance and expected withdrawal date. Look for concentration in one region or sector, and overlap between funds. Past returns do not guarantee future results; investment losses are possible.

Before a fund switch, understand the new fund’s risks and any switching costs. A recent winner is not automatically the right replacement.

Compare the choices from today forward

• Keep: what ongoing costs and benefits should you expect?
• Adjust: can the contract support changes to funds, premiums or coverage?
• Exit: what surrender costs, lost cover and replacement risks arise?

Compare future commitments and outcomes, with the same starting assumptions. Avoid surrendering simply because another illustration looks higher. Ask for a written comparison and time to consider it.

What to bring to a review

• Your latest policy statement and current benefit schedule
• The policy contract, product summary and applicable charges
• Premium and withdrawal history, including any breaks
• A current surrender quotation from your insurer
• Your reason for reviewing the policy and when you may need the money

If you cannot find everything, start with your latest statement and the question on your mind. We can identify what else is needed.