Company to monitor the level and appropriateness of MVRs as they are required to maintain balance between customers surrendering and those who remain invested
The UK-based financial services group, Friends Provident has eliminated market value reductions (MVR) on all pension contracts and life contracts taken out after 2001 – reported Moneymarketing.co.uk. MVRs impose penalty on investors who withdraw policy before maturity and are often considered as a sign of tough investment markets.
Reportedly, maximum MVR rate has been brought down from 13% to 10% and the average redution on a surrender claim halved to 2% from 4%. However, in case a policy guarantees that an MVR is not applicable on a particular date, on death or regular withdrawls, these reductions are not applicable. The company has said that because of improvement in investment markets, it has reduced MVR rates on all other contracts up to an average of 2%.
Earlier, M Consulting reported that the company had launched an online income protection toolkit to help advisers to market their products. Mark Jones, head of protection at Friends Provident, said: “Our previous mini toolkits have been a great success and have helped to bring all sales support material together in one place for the adviser. Both the toolkit and online seminars further build on the value of distance learning, especially important during an economy where costs and time are limited,” quoted MoneyMarketing.