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Nothing is free

I refer to recent correspondence on who pays for adding a five-year capital guarantee to a with-profits policy.

To say policyholders do not pay as the cost comes out of the free assets is typical of the lack of transparency in with-profits.

What this explanation fails to point out is the free assets come from amounts held back from policyholders so, ultimately, of course, the policyholder pays.

It is just this sort of continuing refusal to face up to the fact that you cannot go on telling the public that they can have something for nothing that has led to the collapse in confidence and resulting demise of with-profits.

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