Policyholders with a leading insurance company are in line for a financial boost worth almost a thousand euro.
Some 93,000 people who have old Royal Liver, Caledonian Life and some Irish Life policies are set to get an average top-up to their policies of €900, if the plan is approved. They will get access to this money when their policies mature, if it is voted through. The payments are being proposed by life company Royal London in Ireland, and are due to be voted on by post, online and at a policyholder meeting in Dublin on October 20. It comes about due to Royal London’s takeover of Royal Liver, which was approved by the then Competition Authority in this country in 2011.
Royal Liver then became part of Royal London, which is the largest mutual life, pensions and investment company in the UK. Royal Liver, the Liverpool insurance company that built the famous building on that city’s waterfront, used to have a huge insurance operation in this country with premiums collected door-to-door by people who were known as the Liver Men. Caledonian Life was acquired by Royal London at the time as the takeover of Royal Liver, and rebranded as Royal London. Royal London is a mutual, which means it is owned by its members and any financial surplus profits goes to its policyholders.
Now the 93,000 policyholders here, who have endowment policies, whole-of-life policies and pensions, can vote on a proposal to boost to the value of the plans. There have already been a number of what are known as distributions of funds from the takeover of Royal Liver for Irish policyholders. These were in 2013, 2018, 2019 and earlier this year, with the amounts paid into policies depending on the size of the person’s policy.
But this latest one is the biggest. It comes about as a pot of money that was held back as a “rainy-day fund” at the start of the takeover process, in case there were any claims on the company, is now being freed up. These funds are known as the estate.
Royal London said: “Whenever there is more money in the estate than required, the extra money is shared with eligible policyholders by increasing the underlying value of their policy.”
The mutual said that if the offer goes ahead, it will make a final distribution from the estate to eligible policies. This would increase the underlying value of these policies by 23.1pc. And it will be paid in December, if it is approved by policyholders. Royal London said the 23pc value translates into an average increase of just over €900, which is based on an average eligible policy value of €4,000. Some policies are under €100, but others are very large at over €100,000. So, the impact for policyholders will vary depending on the size and type of policy they hold.
Royal London stressed that what it called the “uplift” is not a cash payment. It will add to the value of the individual’s policy and they will benefit from this when the policy is claimed. If the offer goes ahead, it will be the last distribution. If the proposal is rejected by policyholders then eligible policies may still receive distributions from the estate in future, but the size and timings of these would remain uncertain, Royal London said.
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