Flexible Inheritor Plan
Flexible Inheritor Plan
The Flexible Inheritor Plan (FIP) is a single premium unit-linked whole of life policy.
The FIP permits owners to access collective investment schemes and other UK compliant investments. It also allows the owner to appoint a Discretionary Manager, who must adhere to the investment restrictions.
The FIP is not surrenderable although regular withdrawals of capital and part surrenders are permitted.
Upon death of the life assured (or the second to die of the lives assured in the case of joint Policyholders), the policy pays the death benefit. The Death Benefit is equal to the Guaranteed Minimum Sum Assured (GMSA).
The bond aims to:
- To provide capital growth over the medium to long-term
- To provide the option for the settlor(s) to take withdrawals of capital from the bond
- To provide a sum assured payable on the death of the last life assured
- To reduce potential inheritance tax liabilities by gifting the GMSA into trust
Basic Features
| Investments | Collectives/UK Assets/Discretionary Managers/Platforms |
| Withdrawals | Yes - No minimum defined for regular withdrawals and £1,000 minimum for one off part surrenders, subject to the bond maintaining 110% of the GMSA after payment of the part surrender. |
| Death Benefit | The GMSA applies plus an additional Death Benefit should the final portfolio value be greater. |
| Surrender | The bond is not surrenderable |
| Assignments | Not available, just the original assignment into a bare or flexible/discretionary trust. |
| Additional Charges | Adviser fee – 1% (max) value of bond (p.a.) which is deemed a withdrawal. or pre RDR renewal commission, also 1% (max). |
| Additional notes | At least 110% of the GMSA should be held in the Cash Fund. Any value over this can be invested in the permitted investments selected by the policyholder, the appointed adviser or by the appointed Investment Adviser. |
| Segments | This product has a GMSA of the whole bond and is not segmented. As such, segment surrenders or assignments do not occur, only a withdrawal from the bond if the policy value is above 110% of the GMSA. |
| Charges | Charges will be deducted quarterly on policy anniversary based on the policy value, together with a monetary charge. |
| Minimum Policy Value | 110% of the GMSA. |
| Policy Currency | GBP |
| Advisers | Combination of broker only, adviser (ongoing adviser charge or renewal commission) and self advised. |
Further Notes
The bond is split into two:
- The gifted Guaranteed Minimum Sum Assured which is fixed from outset by the client and will not grow in value. This will be available for the beneficiaries of the trust.
- The retained portion which is the value above the GMSA and is in the settlor’s estate.