At the end of August the enhanced fund was worth £5.7bn.
AIG Life says policyholders who need to withdraw their investment can transfer 50 per cent of their units into the standard fund, which is now operating as normal and accepting withdrawals.
Policyholders can then put in a request to withdraw the money.
The other half will be switched into the standard fund and made available by December 15, after AIG Life has sold off some assets to fund the withdrawals.
AIG Life is creating a new fund, the protected recovery fund, for policyholders who wish to keep their money invested.
The remaining assets will be transferred from the enhanced fund into the protected recovery fund. AIG Life guarantees investors that they will receive at least the value of their investment at December 15 back in three and a half years’ time.
AIG Life is urging investors to seek advice on which option is best for their individual circumstances.