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Some comfort for with-profits policy holders

Analysis by the Association of British Insurers finds that customers of with-profit policies are getting more returns than many other types of investor.

Using information from Standard & Poor&#39s and Money Management, the ABI finds that in August 2002, the worst performing maturing 10-year with-profits policy provided a return of 4.9% while the worst performing unit trusts investment during the same period provided a loss of 13.7%.

In August 2002, maturing 10-year with-profits policies showed an average rate of return of 6.4%, compared to 1.53% for the average unit trust. The bank or building society interest rate in August 2002 was 3.7%.

Furthermore, the average real rate of return (the average yield minus the rate of inflation) on a 25-year with-profits endowment has risen consistently over the last five years.

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