Managing With-Profits Funds

Advantage Bond is a lump sum With-Profits investment plan for adults. Although it invests in the With-Profits fund, it is fundamentally different from the regular premium plans. It is not tax-exempt.

It is a whole-of-life plan and does not mature. The Plan pays out on death only, or on earlier cancellation. Partial withdrawals may be made.

This type of Plan is known as “unitised With-Profits”. Yearly bonuses are declared in advance (i.e. at the beginning of the calendar year) and added to the Plan on a daily basis throughout the year; they are not guaranteed. The life insurance element is limited to 101% of the value of the units at date of death.

On cancellation or death, the pay-out value is subject to income tax. On partial withdrawals of up to 5% of the initial investment in each year, tax is deferred until eventual pay-out.

The Plan can be subject to the imposition of a Market Value Reduction (MVR) on exit; this means that if the value of the fund assets notionally allocated to the Plan is less than the nominal value of the units, the MVR reduces the payout to the actual value of those assets. We do not apply a MVR to payments on death, or if the Bond is cancelled on, or within 30 days of, its 10th anniversary.

We no longer offer any Advantage Bonds for new investment.

We no longer offer Essential Protection Plans to new customers, and do not allow any increases in existing cover (other than by indexation).

Replacement Income Cover (RIC)

This Plan pays out a regular monthly benefit after an initial “deferred” period if the Plan owner is unable to work due to illness, disease or accidental injury which gives rise to a loss of earned income. Cover can be arranged with up to three different deferred periods in the same Plan. For a member not engaged in paid work, benefit can be paid if the illness or injury prevents them from performing a number of “activities of daily living” (ADLs) without aid or assistance. The deferred period applies separately to each claim except for a new claim due to the same cause as the previous claim which starts within 26 weeks of that earlier claim.

The amount of benefit that can be paid on claim is limited to a proportion of the Plan owner’s pre-claim earned income. Any continuing income, employer’s benefit and other insured benefits (we call these “deductible items”) are taken into account when we calculate the maximum we can pay. For claims assessed against ability to perform ADLs, a flat rate maximum benefit applies.

A new claim, or potential new claim, must be notified to us within a specific period, which depends on the shortest deferred period under the Plan. Once a claim has been accepted, the insured benefit is payable until the Plan owner is fully recovered, or the insurance cover under the Plan ends (on the birthday of the Plan owner they selected at outset), or they die – whichever happens first. There is no limit to the number of claims that can be made under a Plan. Premiums are not payable throughout the duration of a claim, after expiry of the relevant deferred period.

As well as the insurance cover, each Plan shares in any profits we earn from the operation of this type of business – that is, any money left over each year after we have paid out all claims, covered the costs of paying the claims and our other management expenses, and held back sufficient capital to cover future expected claims and expenses. Profits are allocated to a “profit share account” forming part of each Plan, and interest is added on the balance carried forward at the end of the calendar year. This interest is exempt from income tax.

There are two choices of cover type:

• “level” – the insurance cover and premium remains constant throughout the term of the Plan, and throughout the duration of each claim*
• “indexed” – the insurance cover and premium increases each year by indexation, including during a period of claim*. The maximum increase in any one year is 10%.

 * subject to the benefit amount remaining within the maximum limit allowed (see above).

When the insurance cover ends, the Plan owner receives the full value of the profit share account. If the Plan is cancelled before the end of its term, a cash-in value for the profit share account may be paid, but this is not guaranteed. If the Plan owner dies, the full balance of the profit share account is paid out.

As an optional add-on, Plan owners could include an Additional Income Benefit (AIB), which would pay a monthly benefit during claim if they do not qualify to receive state sickness benefit, other than by reason of having not paid sufficient National Insurance Contributions. AIB also gives rise to a separate tranche of profit share.

As a further optional add-on, Plan owners could pay for a lump sum Fatal Accident Benefit, which would be paid out should they die as a direct result of an accident. This cover ends when the monthly benefit cover ends.

If the Plan owner stops paying premiums (other than during a period of claim), the Plan will lapse. There may be a residual value to the profit share account, but this is not guaranteed.

Legal ownership of the Plan may not be transferred to another person.

Critical Illness Cover (CIC)

This Plan pays out either a lump sum amount, or a series of monthly instalments until the Plan’s end date (the choice is made at the outset), if the person whose life is insured suffers one of a specified list of major illnesses, or undergoes a specified major surgery, or becomes permanently and totally disabled (subject to certain conditions). It can cover one or two persons, e.g. husband and wife. It also includes some limited cover for the Plan owner’s children; this benefit is only payable as a lump sum.

There are two choices of cover type:

• “level” – the insurance cover and premium remains constant throughout the term of the Plan, and throughout the duration of each claim
• “indexed” – the insurance cover and premium increases each year by indexation, including during a period of claim. The maximum increase in any one year is 10%.

As an optional add-on, Plan owners could pay for a lump sum Fatal Accident Benefit, which would be paid out should they die as a direct result of an accident.

Premiums are waived during any period that an adult insured by the Plan is prevented from working (or performing certain “activities of daily living”) by reason of illness, disease or accidental injury.

The Plan does not include any insurance cover that would be paid out on the death of a person insured by it.

The Plan can be cancelled at any time, but there is no cash-in value. Nothing is paid out if the Plan expires at the end of its term.

If the Plan owner stops paying premiums (other than during a period of incapacity), the Plan will lapse, without value.

Most CIC Plans include an option for the Plan owner(s) to take out additional cover in certain circumstances.

Critical Illness with Life Cover Plan

This Plan is the same as the CIC Plan, but in addition it includes insurance cover that would be paid out on the death of an adult insured by it.

Life Cover Plan (LC)

This Plan provides life insurance cover only, but it otherwise includes the same features as the CIC Plan.

These Plans (also sometimes referred to as “sickness Plans”) pay out a regular weekly benefit after an initial “deferred” period if the Plan owner is unable to work due to illness, disease or accidental injury which gives rise to a loss of earned income. For a member not engaged in paid work, benefit can be paid if the illness or injury prevents them from performing a number of “activities of daily living” (ADLs) without aid or assistance. The deferred period applies separately to each claim except for a new claim due to the same cause as the previous claim which starts within 13 weeks of that earlier claim.

The amount of benefit that can be paid on claim is limited to a proportion of the Plan owner’s pre-claim earned income and any continuing income, employer’s or state benefit and other insured benefits (we call these “deductible items”) are taken into account when we calculate the maximum we can pay. The proportion of pre-claim income and the deductible items may differ, depending on when the Plan was started. For claims assessed against ability to perform ADLs, a flat rate maximum benefit applies.

A new claim, or potential new claim, must normally be notified to us within 21 days of the onset of incapacity. Once a claim has been accepted, the insured benefit is payable until the Plan owner is fully recovered, or the insurance cover under the Plan ends (this will be 31st December of the year in which they become 60 or 65), or they die – whichever happens first. There is no limit to the number of claims that can be made under a Plan. Premiums must continue to be paid throughout the duration of a claim.

As well as the insurance cover, each Plan shares in any profits we earn from the operation of this type of business – that is, any money left over each year after we have paid out all claims, covered the costs of paying the claims and our other management expenses, and held back sufficient capital to cover future expected claims and expenses. Profits are allocated to a “surplus account” forming part of each Plan, and interest is added on the balance carried forward at the end of the calendar year. This interest is exempt from income tax.

The purpose of the surplus account is to build up a lump sum which is available to the member when their insurance cover expires at age 60 or 65. Partial withdrawals are permitted before then (and can be repaid if the member wishes), but the full value of the surplus account does not become freely available before expiry of the insurance cover. At 60 or 65 the member has three options: (1) to withdraw their surplus in full and cease to be a member; (2) to continue paying premiums at a reduced rate, to maintain their surplus account and tax-exemption on future interest added (this is called “commuted membership”); (3) to stop paying premiums but leave the surplus balance to be withdrawn later, with future interest added subject to tax (this is called “unsuperannuated membership”).

The insurance cover and level of surplus allocation are determined by the number of “units” for which premiums are charged. Each unit comprises one amount of weekly insurance benefit and one surplus share. Except for PHI+ Level Plans (see below), the number of units may increase each year by the application of “indexation” – i.e. we add further units (or parts of units) by reference to the Retail Prices Index, in order to maintain the value of the insurance cover. The maximum increase in any one year is 10%. Premiums for the additional units are charged at the rate that applies to the Plan owner’s age at the time they are added.

If the Plan is cancelled before the end of its term, an exit charge is applied (in most cases this is £50) and the balance of the surplus account after this charge and any unpaid premiums have been deducted is paid to the Plan owner. The exit charge is waived if the Plan is cancelled after the Plan owner’s final birthday before the insurance cover is due to end, and it does not apply on cancellation of commuted and unsuperannuated membership (see above).

If the Plan owner dies, the full balance of the surplus account is paid out, and the exit charge does not apply.

As an optional add-on, Plan owners could pay for a lump sum Fatal Accident Benefit, which would be paid out should they die as a direct result of an accident. This cover ends when the weekly benefit cover ends.

Legal ownership of the Plan may not be transferred to another person.

We no longer offer income protection Plans to new customers, and do not allow any increases in existing cover (other than by indexation).

Income Protection Plans by name

Permanent Health + (PHI+)

Each “unit” comprises £10 a week insurance cover and one surplus share.

There are three choices of cover type:

1. Level: the insured benefit remains the same amount throughout the term of the Plan and throughout the duration of a claim*.
2. Index-linked: the insured benefit increases each year by indexation; there is no indexation during a claim (i.e. the benefit amount remains the same throughout the claim*).
3. Inflation-proofed: the insured benefit increases each year by indexation, including during a period of claim*.

 *subject to the benefit amount remaining within the maximum limit allowed (see above)

Income Protection + (IP+)

There are three choices of benefit and surplus combination:

1. Scheme 1 (“single cover”): each “unit” comprises £3 a week insurance cover and one surplus share.
2. Scheme 2 (“double cover”): each “unit” comprises £6 a week insurance cover and one surplus share.
3. Scheme 3 (“triple cover”): each “unit” comprises £9 a week insurance cover and one surplus share.

There are two choices of cover type:

1. Permanent: the insured benefit remains the same amount throughout the duration of a claim*.

2. Standard: 100% of the insured benefit is payable for the first 26 weeks of a claim, reducing to 50% for the next 26 weeks of the claim, and reducing again to 30% for the remainder of the claim*. Claims less than 39 weeks apart are added together to determine the level at which benefit is payable.

*subject to the benefit amount remaining within the maximum limit allowed (see above)

The insured benefit under both cover types increases each year by indexation, but there is no indexation during a claim or where benefit has been paid for more than 90 days in total in the previous calendar year.

Female Plan owners may claim a Maternity Benefit on the birth (or still-birth) of a child.

Deferred Income Protection +

Each “unit” comprises £6 a week initial insurance cover after the deferred period and one surplus share.

 There are three choices of benefit payment:

1. Deferred period 4 weeks, then 100% of the initial benefit for the first 52 weeks of a claim, reducing to 50% for the next 52 weeks of the claim, and reducing again to 30% for the remainder of the claim*
2. Deferred period 13 weeks, then 100% of the initial benefit for the first 156 weeks of a claim, reducing to 50% for the next 156 weeks of the claim, and reducing again to 30% for the remainder of the claim*
3. Deferred period 26 weeks, then 100% of the initial benefit for the first 260 weeks of a claim, reducing to 50% for the next 260 weeks of the claim, and reducing again to 30% for the remainder of the claim*

*subject to the benefit amount remaining within the maximum limit allowed (see above).

Claims less than 39 weeks apart are added together to determine the level at which benefit is payable.

The insured benefit in all cases increases each year by indexation, but there is no indexation during a claim or where benefit has been paid for more than 90 days in total in the previous calendar year.

Investment in these Plans is linked to units in a collective investment fund (the fund), which itself invests in company shares. Investment performance is thus directly linked to movements in the price of shares quoted on the London Stock Exchange; such movements can be significant, especially over short periods of time.

Each Plan is notionally allocated units in the fund; for regular premium Plans each premium paid “purchases” more units. The price of units goes up and down over time, being revalued on a weekly basis.

Each Plan, including children’s Plans, includes an element of life insurance cover which is guaranteed to be paid out if the life insured dies before the end of the term. However, for endowment Plans this sum is not guaranteed to be paid out at maturity; the amount paid out will be the number of units allocated to the Plan at that time multiplied by the unit price that applies on the maturity date. On death, this value is payable if it is more than the guaranteed life insurance cover.

All our unit-linked Plans are designed to be held as long-term investments – the minimum term for an endowment is 10 years. The long-term nature of the Plan means that if it is cashed in before the end of its intended term it will not be able to achieve its full potential, and its value will be reduced – possibly very significantly (especially in the early years), and it may be less than has been paid in. Most Plans have no cash-in value at all for the first two years or so. The cash-in value will be the number of units allocated to the Plan at that time multiplied by the unit price that applies on the cash-in date.

As an alternative to cashing in, it is possible, after a few years, for a Plan to be made “paid up”. This means that no further premiums are payable, the life insurance cover is reduced, and the value of the Plan is determined by the number of units that have been allocated to it up to that time.

If premium payments are stopped the Plan will lapse without value if less than two years’ premiums have been paid; after this it will be made paid up automatically. A lapsed Plan may be reinstated within 13 months of the due date of the earliest unpaid premium, subject to all outstanding premiums being paid and, in some circumstances, evidence of the continued good health of the person whose life is insured being provided.

Legal ownership of a Plan may be transferred to another person, provided the owner is aged 18 or over at the time of transfer.

We no longer offer any unit-linked Plans for new investment.

Unit-linked Plans by Plan name

Baby Bond, Youngster Bond, Dominion Bond

These are all children’s endowment Plans, for children aged under 3 (Baby Bonds) or from 3 to 17 (Youngster Bonds) at outset.

The Plan-owner from the outset is the child, and not their parent or the person who is paying the premiums. All premiums paid are, legally, gifts to the child.

The Plan term is usually 10 years. It cannot be altered once the Plan has started. The Plan pays out at the end of the term (maturity) or on the earlier death of the person whose life is insured.

At the end of 10 years, most (but not all) of these Plans include an option to extend the term for a further 10 years. Premiums would continue to be payable, and units allocated to the Plan as previously. The Plan could be cashed-in at any time.

If the premium is £25 a month (or £270 a year) or less the Plan will normally be tax-exempt, unless the child already had another tax-exempt Plan when it started. The Plan schedule states whether it is taxable or tax-exempt. The amount of the premium cannot be changed once the Plan has started.

We can communicate either with the child’s parent or guardian, or the premium payer (if different), but a premium payer who is not the parent cannot give us any instructions or sign any forms on the child’s behalf.

If the Plan is still running when the Plan owner becomes 18, from that time we can only communicate with the Plan owner themselves, unless they give their written consent to our communicating with somebody else. This is a requirement of the UK Data Protection Act, 2018.

There are no restrictions on what the Plan owner does with the money when the Plan pays out at maturity. If the Plan matures before the child is 18, we can only pay to their parent or guardian, who is required to ensure that the proceeds are used exclusively for the child’s benefit.

Friendly Bond

This is a unit-linked endowment Plan for adults aged 17 or over at outset.

The Plan term is usually 10 years, and it must mature before the life insured’s 80th birthday. It cannot be altered once the Plan has started. The Plan pays out at the end of the term (maturity) or on the earlier death of the person whose life is insured.

At the end of 10 years, most (but not all) of these Plans include an option to extend the term for a further 10 years. Premiums would continue to be payable, and units allocated to the Plan as previously. The Plan could be cashed-in at any time.

If the premium is £25 a month (or £270 a year) or less the Plan will normally be tax-exempt, unless the Plan owner already had another tax-exempt Plan when it started. The Plan schedule states whether it is taxable or tax-exempt. The amount of the premium cannot be changed once the Plan has started.

Capital & Income Bond

This is a lump sum investment Plan for adults or children. It is not tax-exempt.

It is a whole of life Plan and does not mature. The Plan pays out on death only, or on earlier cancellation. Partial withdrawals may be made.

The life insurance element is limited to 101% of the value of the units at date of death.

On cancellation or death, the payout value is subject to income tax. On partial withdrawals of up to 5% of the initial investment in each year, tax is deferred until eventual payout.

With-Profits - information common to all Plans (except Advantage Bond)

Before the advent of the Child Trust Fund the majority of The Children’s Mutual (and before that Tunbridge Wells Equitable Friendly Society) business was invested in our With-Profits fund.

Where the With-Profits fund invests

This fund invests in a wide range of assets, including equities (company shares), bonds, fixed interest, property and cash, thus creating a balanced portfolio of investments with the potential to counteract the effects of the volatility of different types of asset within the single fund.

All Plans investing in the fund, including children’s Plans, incorporate an element of life insurance, and guarantee to pay out at least a minimum sum should the “life insured” die – before the Plan is due to end (mature) if it is a savings Plan (endowment), or at any time if it is a “whole of life” Plan. We call this the “guaranteed minimum sum assured” (GMSA).

The assets held by the With-Profits fund do not belong to individual Plan-owners. Instead, each Plan is notionally allocated “asset shares” equivalent to the proportion of the overall fund which it represents. This proportion is determined by the GMSA when the Plan starts, and depends on several other factors, including the intended term (investment period) of the Plan, the amount and frequency of premiums to be paid, and the age and health of the person whose life is insured by the Plan.

Management of the With-Profits fund

We manage the With-Profits fund with the aim of achieving investment growth (or “profits”) over time, which – after allowing for the costs of managing the fund, administering the Plans invested in it, and of meeting regulators’ requirements as to the amount of capital we must hold in order to protect our customers’ interests – can be shared between Plan owners. We do this by adding “bonuses” to Plans, most commonly on a yearly basis, and again when a Plan pays out, for example when it matures or if the life insured dies. These bonuses reflect any growth in the value of the asset shares which we have notionally allocated to the Plan. Once a bonus has been allocated to a Plan, it becomes part of its guaranteed payout value, along with the GMSA referred to above.

However, as bonuses depend on the performance of the investments held by the fund, they differ from year to year, depending on the overall economic conditions and the actual results achieved by different assets. This means that we cannot guarantee to add any particular amount or level of bonus, or indeed any bonus at all during periods of severe economic downturn. To avoid significant changes in the level of bonuses from year to year, however, we apply what we call “smoothing”. In simple terms, this means that we hold back some of the fund’s “profits” in good years, so creating a reserve from which we can improve the level of bonuses in years when the fund’s investment performance is less good. Nevertheless, we always aim to pay out at least the full value of a Plan’s underlying asset shares when it matures or pays out on death.

The diversity of assets held by the With-Profits fund means that the nature of the asset shares backing an individual Plan can be changed gradually over its term. We do this to take advantage of the greater potential for growth presented by the more volatile assets (such as shares) during the earlier years of the Plan’s term, and to preserve earlier gains and secure the Plan’s guaranteed value (GMSA plus the already allocated bonuses) by moving to more stable assets (cash, for example) during the later years.

All our With-Profits Plans are designed to be held as long-term investments – the minimum term for an endowment is 10 years. The long-term nature of the Plan means that if it is cashed in before the end of its intended term it will not be able to achieve its full potential, and its value will be reduced – possibly very significantly (especially in the early years), and it may be less than has been paid in. Most Plans have no cash-in value at all for the first two years or so.

As an alternative to cashing in, it is possible after a few years for a Plan to be made “paid up”. This means that no further premiums are payable, the GMSA is reduced, and future bonuses will be allocated by reference to this lower value rather than the full sum insured when the Plan started.

If premium payments are stopped the Plan will lapse without value if less than two years premiums have been paid; after this it will be made paid up automatically. A lapsed Plan may be reinstated within 13 months of the due date of the earliest unpaid premium, subject to all outstanding premiums being paid and, in some circumstances, evidence of the continued good health of the person whose life is insured being provided.

Legal ownership of a Plan may be transferred to another person, provided the owner is aged 18 or over at the time of transfer.

We no longer offer any With-Profits Plans for new investment.

Tax

Except for Plans purchased with a single lump sum investment (see “Advantage Bond” in our TW product section), our With-Profits Plans enjoy certain tax advantages. There is normally no income tax or Capital Gains Tax for the Plan owner to pay when the Plan pays out at maturity; similarly, there are normally no taxes for the family to pay if the Plan pays out on the life insured’s death. However, if the Plan is cashed in early, there may be tax to be paid on the excess if its payout value is greater than the premiums that have been paid; this will depend on just how long the Plan has run before it is cashed in.

We are able to claim exemption from certain taxes on part of our business, and to reflect this in returns to Plan-owners. We have, therefore, issued savings and other Plans in two distinct forms – “tax-exempt” and “taxable”. The maximum amount any individual (including children) can invest in tax-exempt Plans is set by the Government, and has changed many times over the years. The current limit is £25 a month or £270 a year. Other than the difference in tax treatment, however, both taxable and tax-exempt Plans are the same.

With-Profits Plans by Plan name

Baby Bond, Baby Bond Extra, Youngster Bond, Youngster Bond Extra 

These are all children’s endowment Plans, for children aged under 3 (Baby Bonds) or from 3 to 17 (Youngster Bonds) at outset.

The Plan owner from the outset is the child, and not their parent or the person who is paying the premiums. All premiums paid are, legally, gifts to the child.

The Plan term can be any number of whole years from 10 to 30. It cannot be altered once the Plan has started. The Plan pays out at the end of the term (maturity) or on the earlier death of the person whose life is insured.

If the premium is £25 a month (or £270 a year) or less, the Plan will normally be tax-exempt, unless the child already had another tax-exempt Plan when it started. The Plan schedule states whether it is taxable or tax-exempt. The amount of the premium cannot be changed once the Plan has started.

We can communicate either with the child’s parent or guardian, or the premium-payer (if different), but a premium-payer who is not the parent cannot give us any instructions or sign any forms on the child’s behalf. 

There are no restrictions on what the Plan owner does with the money when the Plan pays out at maturity. If the Plan matures before the child is 18, we can only pay to their parent or guardian, who is required to ensure that the proceeds are used exclusively for the child’s benefit.

Friendly Bond

This is an endowment Plan for adults aged 17 or over at outset.The Plan term can be any number of whole years not less than 10, and must mature before the life insured’s 80th birthday. It cannot be altered once the Plan has started. The Plan pays out at the end of the term (maturity) or on the earlier death of the person whose life is insured.

If the premium is £25 a month (or £270 a year) or less the Plan will normally be tax-exempt, unless the Plan owner already had another tax-exempt Plan when it started. The Plan schedule states whether it is taxable or tax-exempt. The amount of the premium cannot be changed once the Plan has started.

Friendly Home Bond

This is an endowment Plan for adults aged 17 or over at outset, designed to be used as security for a mortgage. The Plan pays out at the end of the term (maturity) or on the earlier death of the person whose life is insured. It is not guaranteed to pay off any associated mortgage.

It may be a single Plan, or a group of up to three Plans (all for the same term), up to two of which may be tax-exempt. The Plan can be written on a single or joint life basis, and on an own life or life of another basis.

Tax-exempt Plans within the group are in single ownership (even if insuring joint lives); taxable Plans may be in single or joint ownership.

Individual Plans within a group may be cashed-in or made paid up separately from other Plans in the group.

Most Friendly Home Bond Plans include an option for the Plan owner(s) to take out additional cover in certain circumstances.

University Bond

This may be a single Plan, or a group of up to ten Plans, each with a different term (so that one Plan matures in each succeeding year over a set period). The total premium reduces each year as each Plan matures.

Each Plan pays out at the end of its term (maturity) or on the earlier death of the person whose life is insured.

Plans can be owned by, and insure the life of, either a child or an adult, but all Plans within a group belong to and insure the same person.

One of the Plans within a group will normally be tax-exempt. Where this is the case, that Plan may be for the same term as one of the other Plans in the group.

Individual Plans within a group may be cashed-in or made paid up separately from other Plans in the group.

Funeral Plan, Dignity Bond

These are whole of life Plans with premiums payable for 10 years, available for adults only. They can be either tax-exempt (up to the permitted limit) or taxable.

The Plan pays out on the death of the person whose life is insured; it does not mature.

As of 2017 your annual statements will be issued on the date of your Plan anniversary.

How will this change affect me?

In the past, you will have received your annual statements towards the beginning of the calendar or tax year. As of 2017, we will send your annual statement on the anniversary of the day your Plan started.

For example, if your Plan anniversary date is July 1, we will produce your annual statement on this date and you should receive it a few days later.

What if I need to know the value of my Plan before the next statement arrives?

For the benefit of former Members of the Tunbridge Wells Equitable Friendly Society Limited (TWEFS) that hold current sickness contracts that have been transferred across to Forester Life as part of the Transfer of Engagements, the relevant section of the TWEFS Rules are below, which deal with the Terms and Conditions that apply to all contracts for sickness benefits.

The terms and conditions outlined below will continue to apply to all existing sickness contracts held in the TW Fund.

Important documents

Rules for Sickness Benefit

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What has happened?
Effective 3 April, 2013 the business of the Tunbridge Wells Equitable Friendly Society Limited and The Children’s Mutual was transferred to Forester Life.

What is Forester Life?
Forester Life is a UK financial services company and is a subsidiary of Foresters, an international financial services organisation which operates on a similar basis to a UK friendly society. 

Why was Forester Life chosen?
The Tunbridge Wells Equitable Friendly Society Board considered a number of options and decided that a proposal to transfer the Society’s business to Forester Life was in the best interests of the Society’s Members and Policyholders. 

How does the transfer impact the Society’s members and policyholders?
The impact of the transfer and the benefits from it will depend on the type of policy you have.

Am I going to get a windfall?
The transfer will not result in any “windfall” payments. However, the transfer has the potential to bring forward the distribution of excess assets and increase policy payouts.

Who paid for the transfer?
The costs incurred by each of the Society and Forester Life to complete the transfer were paid by the Society and Forester Life respectively. A small number of costs including the cost of an independent actuary were shared on a 50/50 basis.

How are the interests of the Society’s members and policyholders protected?
From the Effective Date, Forester Life established an advisory panel for the Tunbridge Wells Fund. This advisory panel monitors the management of the Tunbridge Wells Fund against the terms of the transfer and the PPFM.

Who should the Society’s policyholders contact about their policies?

Please contact Forester Life: 
Customer Services
Forester Life
Foresters House
2 Cromwell Avenue
Bromley BR2 9BF
T: 0333 600 0333
E: service@foresters.co.uk

Has the transfer altered the tax status of my policy?
No, the tax status of your policy has not changed. If you are not sure of the tax status of your policy, please contact us.