Windfall blow for long-termers by Finance News Bulletin

Published: 15/01/07

Long-standing Norwich Union policyholders may take delivery of smaller windfalls than those who bought tactics more recently, if the proposed distribution of the insurer's £4bn of inherited estate - the extra in its with-profits finance - goes aheadWINDFALLS: Norwich Union wants to redistribute surplus with-profits funds but long-term policyholders may miss outDon't fail to spot your chance to tell us what you think of This is Money and help us form its futureSorting your finances is simple, so simple you can do it in eight ladder Forget the rest and read this

Clare Spottiswoode, who as Policyholder Advocate is acting for Norwich Union customers in the proposed diagram to redistribute the money, has said that those whose policies have been in force longest may get smaller windfalls than newer savers because they have less to misplace in the dealHowever, she confirmed that all 12m eligible policyholders could expect a smallest amount payment of £100Nothing concrete has yet been decided about how - or indeed if - the vast pool of inherited estate will be alienated among policyholders and shareholders

Norwich Union's close relative company Aviva has indicated it favours a distribution if an accord can be reached between policyholders and shareholdersBut Spottiswoode voiced the argument in good turn of newer savers collecting better windfalls at the first public meeting with policyholders in Edinburgh last weekShe said: 'It might be that big policies about to mature get less cash, as these policyholders are giving up fewer future benefitsThis would overturn the usual system applying to windfalls, where bigger policies and long-standing customers scoop better sums

But when the 120 policyholders attending the Edinburgh meeting were asked to take part in an election on the proposal, only 10% thought such a distribution would be fairchoose a loan term 12 months (1 year) 24 months (2 natural life 36 months (3 natural life 48 months (4 natural life 60 months (5 years) 72 months (6 years) 84 months (7 years) 96 months (8 years) 108 months (9 years) 120 months (10 years)Please select a type of cover Life cover Home and contents Car stop working services Health - medical Health -

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