The plan can be held on single life basis only.

What is it?

It’s a market linked investment vehicle with a nominal life insurance benefit attached to it.

Your money will be invested in company equity shares, company and government bonds and other assets, offering better potential for the investments to grow as compared to returns on a bank or building society savings account.

You should note that all investments carry an element of risk and you may get back less than the amount invested. Investment into Capital Investment Bond should be seen as a medium to long-term investment and you should be prepared to commit for a period of at least 5 years.

Also, you should note that this will be a ‘non qualifying’ policy, meaning that higher rate tax payers will have additional tax liability on the returns on the investment when they are taken out. They are called ‘chargeable gain’ and needs to be reported to HMRC in self assessment of income tax.

Eligibility

You must be at least 18 years old and a UK resident for tax purposes to be eligible to invest. We will require your NI number in the application process.

How much can you invest

The minimum amount that you can invest is £5,000. However, if you are an existing investor in this product you can top it up with £2,000. You can also open a new investment with £2,000 if you are transferring the maturity proceeds from an existing policy with LICI UK.

This will be a single lump sum payment. You can pay by cheque or allow us to collect the amount by   Direct Debit.

What are the main features

  • This is a whole of life plan.
  • We buy units on the day we receive your money at the prevailing price and allocate them to your plan. The value of each unit is calculated on a daily basis. They move in line with the movement in markets and may go up or down.
  • In the event of death, if the plan is still in force, your beneficiary will get 101% of the value of the fund on the date of death.
  • You can withdraw 5% of the invested amount in each financial year tax free. You should however remember that taking out money, particularly in the early years, will adversely impact the potential of your investment to grow.
  • You can close the plan at any time but you may not get back the amount invested, particularly in early years when the investment did not have enough time to grow and early surrender penalty charges also apply.

Where do we invest?

Your contribution will be invested in our Balanced Managed Fund with the aim to invest 70% of the available fund in company shares and the remaining 30% in government and company bonds.

What are the charges?

There is an implicit yearly charge of 1.5% of the policy value, taken into account while calculating the daily unit price.

We also apply tax at the HMRC prescribed rate in the unit price calculation, which reduces the potential return.

Risk you should consider

You should note that these investments carry an investment risk and you may get back less than the amount invested. It should be seen as a medium to long term investment and you should be prepared to commit at least for a period of five years. In summary the risks are –

  • Past performance cannot be taken as a guarantee of future returns.
  • The value of units and therefore the value of investments may go up or down. You may not get back the amount originally invested.
  • There will be additional tax liability on the returns on investment, if you are a high rate tax payer.
  • If you withdraw from your investment early, particularly in the first 5 years, you may get back less than you expected.
  • Inflation and making regular withdrawals may affect the purchasing value of your investment in the future.

 
Documents

  • Please click here ……. for a Key Information Document for this Capital Investment Bond.

If you want to buy a new policy or want to discuss further, please call us free on 08000 685712 or email to enquiry@liciuk.com