hi, I know that the difference between unitised and non-unitised accumulating with-prifits contract is just a form of presentation. However, I have no idea about how the difference is. I got 4 questions about unitised vs non-unitised, hope someone can give me some idea For 2009 st2 ch6 p13 first paragraph Is that the description for an unitised contract only, not for non-unitised contract? For 2009 st2 ch6 p14 formula Is that the description for an non-unitised contract only? For 2009 st2 ch6 p15 first 11 lines Is that for an unitised contract only? For a non-unitised contract, the insurer can't change the value of unit and can't increase the value of unit, as what the insurer does for a unitised contracr?
With an accumulating with-profits (AWP) policy, the insurer will record the fund value of the policy and perhaps provide the following information to the policyholder on an annual basis: Fund last year = 100 Premiums paid this year = 50 Charges deducted this year = -10 Bonuses added this year = 5 Fund now = 145 With non-unitised AWP that's the end of the story. For unitised AWP the fund value is further broken down into units. So for example, last year the policy may have had 50 units worth 2 each, and now it has 69.05 units worth 2.1 each. The description in Chapter 6, first paragraph of page 13 refers to any AWP policy whether unitised or not. The formula on page 14 also refers to any AWP policy. At the top of page 15 the notes are talking about units so this must be a unitised AWP policy. In reply to your final question, a non-unitised AWP policy has no units, but it does have a fund value. This fund value is changed as shown in my example above and the equation on page 14. I hope this helps clarify the difference between unitised and non-unitised policies. Mark
With an accumulating with-profits (AWP) policy, the insurer will record the fund value of the policy and perhaps provide the following information to the policyholder on an annual basis: Fund last year = 100 Premiums paid this year = 50 Charges deducted this year = -10 Bonuses added this year = 5 Fund now = 145 With non-unitised AWP that's the end of the story. For unitised AWP the fund value is further broken down into units. So for example, last year the policy may have had 50 units worth 2 each, and now it has 69.05 units worth 2.1 each. The description in Chapter 6, first paragraph of page 13 refers to any AWP policy whether unitised or not. The formula on page 14 also refers to any AWP policy. At the top of page 15 the notes are talking about units so this must be a unitised AWP policy. In reply to your final question, a non-unitised AWP policy has no units, but it does have a fund value. This fund value is changed as shown in my example above and the equation on page 14. I hope this helps clarify the difference between unitised and non-unitised policies. Mark
What is the point of having AWP contracts when compared to conventional WP contracts? Did they arise because of more transparency and being more equitable to WP policyholders?
