I would like to know why the guarantee under the Conventional WP is more onerous than under the Accumulating WP at early durations?Also why the guarantees is less onerous at later durations?
Hi Under a CWP contract, the starting guaranteed amount is the basic sum assured. Under an AWP contract, the starting guaranteed amount is typically the fund value (which is closely related to the premiums paid). Imagine a CWP regular premium contract for £100 per month and an AWP regular premium contract for £100 per month. The guaranteed sum assured for the CWP might be £10,000 say, but in the early stages the guaranteed amount for the AWP is only going to be several hundred pounds. Hope this helps Lynn
