GE Life is aiming its high income and growth plan at the over-50s who are interested in regular income or capital growth.
The plan has a term of three years and two months and is linked to the EuroStoxx 50. There is a choice of annual income at 10.25 per cent, monthly income at 0.80 per cent or capital growth at 33 per cent.
The return of the original capital is guaranteed, providing the index does not fall below 20 per cent by the end of the term. If it falls by between 20 and 30 per cent and the final index level is lower than the starting level, capital will be reduced by 1 per cent for each 1 per cent fall in the index.
If the index falls by more than 30 per cent and does not equal the starting level by the end of the term, there is a 2 per cent reduction for each 1 per cent drop in the index for income options. Investors with the growth option will lose 2.66 per cent of their investment for every 1 per cent fall.
As the guarantee does not offer full capital protection, investors whoa re looking for an alternative to building society accounts must accept the possibility of capital erosion. They might also find the plan too complicated to understand.
The EuroStoxx 50 rose from 3271.98 points on April 1, 1998 to 4246.88 points on June 1, 2001.