Existing policies – Life Assurance,Pensions,Savings
Plans
Renewal Commission
This again refers to ongoing commission and it is usually
applicable to regular premium contracts such as Personal
Pensions, Life Assurance Policies and regular savings
plans such as Maximum Investment Plans (MIPs) and Endowments.
This commission is disclosed at the same time as initial
commission but you are not then kept informed as to the
amount paid each year. The commission differs from trail
commission as it is expressed as a percentage of the monthly
or annual premium.
Regular Premium Contracts, Renewal Commission
and Initial Commission
Savings can be made on existing contracts and these savings
will vary depending on how the contract has been set up.
We have a process we call ‘Cleaning’
where it is possible to stop renewal commission
being taken out of your fund, saving you 2.5% of the annual
premium for the rest of life of the contract.
In addition many contracts have been set up with indexation
occurring each year. This is where the amount you pay
into the investment or life product increases at a set
time every year, usually on the anniversary. The amount
of the increase can be either a fixed amount or set at
the rate of inflation. This increase will usually be treated
as a new investment going through the entire initial set
up charges again.
To stop these charges happening a ‘Change
of Agency’ form needs to be completed.
Once this has been done we simply instruct the investment
house to stop paying the renewal commission and have the
commission reinvested to either reduce your charges or
increase your investment. In addition any future increases
would benefit from having all the initial commission reinvested
for the rest of the life of the contract.
N.B. We are also able to ‘Clean’
regular savings into Unit Trusts and ISAs if initial commission
is being taken from your investment every time you make
a payment.
