Below are some terms used in our product literature. Use this index to find specific examples and their meaning.
Ad hoc charge
A charge that we make for performing additional services.
Any premium paid by you after the commencement date of the policy and stated in an acknowledgement issued by us.
Refers to any administrative actions performed by us including: a change of the life assured; a request for a one-off valuation; a change of discretionary fund manager; a change of investment adviser; switching from a non-discretionary managed to discretionary managed fund, and vice versa.
Additional single premium(s)
A single premium paid by you after the commencement date and stated in an endorsement issued by us.
Bare trust (UK-specific)
A trust for the exclusive benefit of one or more beneficiaries in specified shares. The beneficiaries become entitled to their share of the trust property on reaching age 18.
A person or organisation who may benefit from a will, intestacy or a trust.
Chargeable lifetime transfer (UK-specific)
A transfer, which is neither exempt nor potentially exempt. The most common chargeable transfers occur on transfers into discretionary trusts.
The date on which the policy starts and is shown in the policy schedule.
The fee paid to an agent by the life company for services rendered to the policyholder for advice on setting up or maintaining a policy. It is often expressed as a percentage of the premium.
Relates to a policy that provides a lump sum payment benefit if the policyholder is diagnosed with a specified critical illness during the cover term.
The day when we deal in the notional units of an investment-linked fund. The day may vary from one investment-linked fund to another.
The sum we pay to you when the last or only life assured dies.
Deemed domicile (UK-specific)
A legal concept for inheritance tax purposes where a non-UK domiciled person is treated as if they were domiciled in the UK at the time of a transfer. The person will be deemed domiciled if they have been resident in the UK for 17 out of the last 20 years.
Discretionary trust (UK-specific)
A trust in which no beneficiary has the right to an interest in possession, the trustees having the power to decide who will receive income and capital from the trust.
A concept of law, which refers to the country that a person would refer to as his permanent home. For UK inheritance tax purposes, a person’s domicile may be different from his or her residence.
Domicile of choice (UK-specific)
If the domicile of the person on whom an individual under the age of 16 is legally dependent changes, he or she will acquire the new domicile automatically, which will be retained until the age of 16.
Domicile of dependence (UK-specific)
On reaching the age of 16, a person has the legal capacity to acquire a new domicile of choice. To acquire a new domicile of choice, the individual must leave the country of his or her current domicile and settle permanently in the new domicile of choice. A change of domicile to a new domicile of choice requires strong evidence (in addition to just living there) that the change of domicile is permanent.
For inheritance tax purposes this means the combined total of a person’s assets and property on death.
Exempt transfer (UK-specific)
Transfer which is not subject to inheritance tax.
Exit charge (UK-specific)
The tax charge made when there is a distribution from a discretionary trust.
Friends Provident International
The marketing name for Friends Provident International Limited, which is an Isle of Man registered company that provides competitive life assurance, pensions and investment products for Asia, the Middle East, Africa, Europe and the UK.
Funds under management
Relate to the amount of clients’ funds we have under management.
Gift with reservation (UK-specific)
A gift where the donor continues to enjoy the benefits of the gift. A gift with reservation will remain within the donor’s estate for inheritance tax purposes.
Independent financial advisers (UK-specific)
Independent experts who are authorised to sell or advise on the policies offered by insurance companies, as well as other financial service providers, such as banks and building societies.
The period beginning on the commencement date and continuing for the period specified in the policy schedule.
Refer to the notional units of investment-linked funds purchased by the regular premiums which you must pay during the initial period and any subsequent initial period.
The person shown in the policy schedule whose life is covered by the policy.
Relates to protection products. It offers you and your loved ones financial protection by providing a cash lump sum if the life assured dies or be diagnosed with a terminal illness during the term of the plan.
Minimum additional premium
The minimum amount set by us at the time the additional premium is paid.
Minimum policy value
The minimum specified value or currency equivalent, above which the policy must be maintained at all times after the initial period.
Nil rate band (UK-specific)
The amount of a person’s estate on which there is no charge to inheritance tax.
The premium shown in the policy schedule issued on the commencement date.
The last person or persons, if any, appointed by you before the death of the life assured to receive the death benefit. If no appointment has been made, or an appointment has been revoked without any subsequent appointment having been made by you prior to the death of the life assured.
The specified date in the policy schedule, detailing when the policy is due to end.
Periodic charge (UK-specific)
An inheritance tax charge on a discretionary trust on the 10th anniversary of the trust, and every subsequent 10 year anniversary.
The collective name given to the collection of policies issued under the same number.
The currency specified in the policy schedule.
The policy schedule first issued with the policy and any revised policy schedule issued due to alteration in the terms of the policy. The policy schedule states the details specific to your policy, such as the names of the life (lives) assured.
The period of 12 months from the commencement date and any subsequent period of 12 months commencing on an anniversary of the commencement date.
The person shown on the policy schedule as the policyholder and owner of a product.
Pooled investment menu
The latest published edition, which is available from our offices at Royal Court, Castletown, Isle of Man, IM9 1RA, British Isles.
Potentially exempt transfer (UK-specific)
A transfer of value between individuals, or to a bare trust or to a trust for a disabled person, which is outside of the donor’s estate if the donor survives seven years.
Pre-owned asset tax (UK-specific)
Where the former owner of an asset continues to enjoy the benefits of ownership of an asset and the ‘Gift with reservation’ rules do not apply, the pre-owned asset tax rules impose an income tax charge on the former owner for every year in which the benefit of the assets is enjoyed.
Relates to the premium shown in the policy schedule issued on the commencement date or in any endorsement as appropriate.
The currency stated in the policy schedule being the currency in which you will pay the premium.
Received on a regular and defined frequency under the terms of a policy. This includes premiums that are received on a monthly, quarterly, half-yearly or annual basis but excludes any one-off or single premiums.
The person who creates the trust.
One-off premiums that are paid into a policy.
Surrender charge period
The period between the commencement date of the policy and the end of the premium payment term of the policy.
The charge which we may make for changing the fund selected by you.
A legal arrangement whereby the creator of the trust transfers property to another person(s) (the trustee(s)) to hold for the benefit of another person(s) – the beneficiary(ies).
The portions of equal value into which a fund is divided. The term ‘units’ includes both initial units and accumulation units.
The currency in which we will value the policy.
The day when we value a fund. The policy fund will be valued at the end of each calendar quarter or the next working day. Each fund will be valued on its respective dealing day.
The value of the policy net of all charges owing to us.
The total amount that can be taken from each premium or additional premium without incurring a charge.
The single or the regular sum which you have asked us to withdraw from the policy.