The bond has been designed to fill a gap in the company’s single premium bond range in that in enables investors to make regular contributions as well as single premiums. Contributions can be made on a one-off basis, monthly, quarterly, half yearly or yearly in US dollars, sterling, euros or Hong Kong dollars. Premiums can be increased or reduced at any time and may be suspended for up to 12 months if the investor notifies the company in advance.
The bond provides access to 109 fund links from a range of management groups, of which investors can select up to 10 funds at once. The range is risk graded between bands one and five, with one the most cautious and five the most aggressive. They are grouped into international managed funds denominated in sterling and dollars, specialist funds and euro-denominated funds.
Switching between the funds is currently free and unlimited. In keeping with the emphasis on flexibility, withdrawals are also free and can be taken n a regular or ad hoc basis, but any withdrawal must be at least $750 or the currency equivalent.
Friends Provident International has also included optional extras such as additional life cover and premium protection cover. Death benefit of 101 per cent is built into the bond, but can be topped up by the additional life cover which must be at least $30,000.
The premium protection cover ensures premiums will be paid if the investor is unable to pay the premiums, for example, if they become unemployed.
The good features of this product are its wide range of fund links and the flexibility it offers investors. However, although features such as withdrawals and fund switches are free, using the full flexibility of the fund could make cost an issue. As well as a quarterly initial charge, monthly plan fee, fund administration charges and external fund charges, services such as changing premium frequency and currency will incur extra costs.