Frequently Asked Questions
Who is Life Trust?
Life Trust is the first financial services company to focus exclusively on addressing the financial issues arising from increasing longevity. Top of page
Who is Life Trust financed by?
Life Trust is financed by JPMorgan, The Royal Bank of Scotland and the D. E. Shaw group. Top of page
Who is Life Trust regulated by?
Life Trust Insurance plc is authorised and regulated by the Irish Financial Services Regulatory Authority (IFSRA). Life Trust Insurance plc is also regulated by the Financial Services Authority (FSA) for the conduct of business in the United Kingdom.
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What is the Longevity Income Plan?
The Longevity Income Plan is the first product from Life Trust. It is a unique product that is designed to pay Planholders a maximum of 21 payments over 20 years from the age of 75 or 80, from a single premium investment. It is treated as a purchased life annuity for tax purposes.
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What is so special about it?
The Longevity Income Plan is special because of a unique feature we call the 'mortality uplift' . As some Planholders die, the value of their original investments, plus the growth on those investments, gets reallocated to surviving Planholders according to their age, gender and value of their unit holdings as Birthday Units.
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What are Birthday Units?
Birthday Units are the additional fund units allocated to surviving Planholders on their birthdays.
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How are they calculated?
Life Trust's Appointed Actuary determines the basis to be used for allocating Birthday Units based on the actual mortality experience of Longevity Income Planholders.
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Can Birthday Units be cancelled once they are allocated?
No, once they are allocated they cannot be cancelled or taken away. Top of page
What are the minimum and maximum investment ages?
The minimum investment age is 18.
For the 75-95 Plan option, the maximum age is 65.
For the 80-100 Plan option, the maximum age is 70.
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What are the minimum and maximum investment amounts?
The minimum investment is £5,000.
The maximum investment is £1,000,000 per Planholder.
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When do payments start?
When they apply for a Longevity Income Plan, Planholders choose to start receiving payment either on their 75th or their 80th birthday.
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What does 'Vesting Age' mean?
Vesting Age is the age at which Planholders start receiving payments.
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How frequent are the payments?
Payments are made annually shortly after the Planholder's birthday.
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Can the Vesting Age be changed?
No, once the Planholder has chosen either the 75-95 or the 80-100 Plan, it cannot be changed. However, Planholders could invest in another Plan with a different Vesting Age if desired. Top of page
Can the Plan be transferred to someone else?
Yes, ownership of the Plan can be transferred by way of assignment to another individual or third party. Planholders can also place the death benefit in Trust by completing the Declaration of Trust form as part of their application.
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Can the Plan be cancelled?
Yes, the Planholder has 30 days from the date they receive the Plan documentation to return the Cancellation Notice and receive a refund on their Plan. Life Trust will return the Planholder's orginal investment less any fall in value of the unit price between commencement and cancellation and will not deduct the initial charge.
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Can money be taken out of the Plan?
Until Vesting Age, Planholders are not able to take money out of the Plan. This is because the Plan is designed to be a long-term investment and in order to achieve its investment aims, it does not have a surrender or encashment value.
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Can Planholders top up their Plans?
No, Planholders cannot top up an existing Plan because the tax treatment of each Plan is determined separately.
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Can a Planholder take out more than one Plan?
Yes, a Planholder can take out more than one Plan as long as the sum of the original investments across all the Plans does not exceed £1,000,000.
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How many funds are available within the Plan?
There are 10 funds available within the Plan to suit a range of investment profiles - from the most cautious to the more adventurous.
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Can a Planholder switch between funds?
Yes, funds can be switched up to 3 times each year. The first switch is free of charge with subsequent switches charged at £25. The charge is taken by deducting fund units. Top of page
What is the initial charge on the investment?
The initial charge is up to 5% of the original investment. Life Trust uses this to pay for administration and distribution expenses, including any commission to the Financial Adviser.
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What are the annual charges on the Plan?
There is an annual management charge and related expenses which vary depending on the funds chosen within each Plan, and are deducted on a daily basis from the entire fund through an adjustment in the unit price. These charges may vary over time. There is also an annual charge for life cover which is taken monthly by unit deduction.
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How is the unit allocation calculated?
Once the initial charge has been deducted from the investment, the remaining amount will then be used to purchase units at the prevailing unit price.
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How can a Planholder find out how much their Plan is growing?
The Planholder will receive an annual statement from Life Trust just after their birthday, detailing the 'notional' value of their Plan and showing the allocation of their Birthday Units.
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What happens if the Planholder dies before reaching their Vesting Age?
In the event of death before Vesting Age, Life Trust will pay 100% of the original investment to the executors, assignees or trustees of the Planholder's estate.
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What happens if the Planholder dies before the end of their Plan?
The annual payments from the Plan stop when the Planholder dies. However, if at the time of death the Planholder has not received payments at least equal to the original investment, then the difference will be paid to the executors, assignees or trustees of their estate.
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How much tax is payable on payments from the Plan?
The tax treatment of the annual payments will depend on each Planholder's personal circumstances and the relevant tax rules at the time. Currently for UK residents, a portion of the payments under the Plan is deemed to be Capital Content and therefore not subject to UK Income Tax.
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How can an application for a Plan be made?
The Longevity Income Plan is only available through selected Financial Advisers.
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