Please could someone explain the difference between conventional vs. accumulating with profit policies? I am struggling to understand this... Thanks!
The main difference is the way the bonuses are added. For conventional with-profits, the bonuses are added to the sum assured. Unitised with-profits operate rather like a unit-linked policy except that the unit fund grows with bonuses rather than the actual investment return. The fund value increases when premiums are paid, and reduces when charges are deducted. So effectively the bonuses are added to the premiums. There might still be a sum assured payable on death, but this is constant (ie does not increase with bonuses). I hope this helps. Best wishes Mark
