Talk the talk
The bond is designed for the clients of brokers who want capital security but also want access to equity, fixed interest and property returns. It offers a 100% guarantee on the capital invested plus all declared bonuses on the 10th policy anniversary of the bond. The minimum investment is €6,000.
One of the best features of this type of product is that with-profits bonds ‘smooth out’ the peaks and troughs of the stock market. Some of the profits made in good years are kept in reserve to pay an annual bonus even when stock markets perform badly.
We have provided good, steady returns to policyholders. For example, the annual bonus for the Caledonian Life With-profits Bond in 2004 was 3.5%.
As well as the annual bonus, an additional loyalty bonus of 1-2% is added at the policy’s first anniversary and more is on offer for larger investments.
The bond is aimed at those who want to be sure that, whatever happens in global stock markets, their money will be safe and that they also have the potential to gain from investment growth.
Clients’ capital plus all declared bonuses are 100% guaranteed at the policy’s 10th anniversary, so there is minimum risk involved. Clients can choose to take up to 7.5% of the fund as income, so they are also suffering very little ‘opportunity cost.’
In 2004, over €100 million was invested in the fund and so far in 2005, sales have been extremely buoyant with nearly €60m invested year to date.
In general, most Irish people like to feel confident that their money, wherever it is invested, will be secure.
There is always a market for products with a capital guarantee - as the money invested in our fund this year will attest. The Revenue investigation was focused on the source of individuals’ money, as opposed to the single premium products they were invested in. We have not found that it has had any impact on perceptions of our product.
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