Other advisers work for free, why do you charge a servicing fee?
Nobody can or will work for free and people who claim that they work for free are only interested in selling you a plan and not interested in looking after you no matter what they say. Setting up a plan is the easiest part. The hardest part is providing continuous service and advice over a long period of time. Shoreline charges a service fee of just 1% of the plan value which ensures that both parties have an interest in working together long term. You will need more advice, especially during the later years of your plan, as its value grows. Shoreline is interested to see you hit your target as our income depends on your long-term success. It’s a win-win situation.
My adviser said that I can access all my money any time I want is that true?
No, many advisers, unfortunately, don’t understand how the plans work and misinform, on purpose or by accident, their clients. Each plan works slightly differently so going into full detail here will be impossible. But, if your adviser insists you can take out all your money at any time we strongly advise you to reach out to us with more details so that we can give you a second opinion.
Can you explain how my plan works?
Yes we would love to, but you need to tell us which plan you have. There are many different plans in circulation and we cannot go into details on each plan on this short FAQ page. We advise you to reach out to us with more details so that we can help you.
How can I make a withdrawal from my plan?
To make a withdrawal, first of all, you will need to have liquidity available in your plan. This will depend on several factors, but assuming you have liquidity available you will need to complete a withdrawal form with your details, supply certified proof of identity and residential address confirmation. These rules are standard anti-money-laundry rules that each provider is obliged to work by. We advise you to reach out to us with more details so that we can help you.
How long does it takes for a withdrawal to arrive in my bank account?
The times differ between companies, but as a rule of thumb we advise clients to assume 7-10 working days from the moment that all necessary documents have been received by the company who issued your plan.
How can I appoint beneficiaries to my plan?
Appointing a beneficiary to your plan can speed up the payment of the plan’s proceeds to the people you care about. Appointing beneficiaries could also avoid probate which is a time consuming process. Most companies have forms to do this and we would be happy to send you the required form. We advise you to reach out to us with more details so that we can help you.
What is probate?
Probate can be required in case the plan owner has dies and did not appoint beneficiaries to his plan. The life insurance company will require a court order from the local court before paying out the proceeds of the plan. This may seem illogical, but if the life insurance company pays out to the wrong beneficiary it will be forced to pay out to the rightful beneficiary as well. To avoid this risk the local court will determine who the rightful legal beneficiary is first and issue probate on which the life insurance company can act without risk. Obtaining probate involves a local lawyer and a local court. Probate will costs some money, but mainly time as it can take up to six months for probate to be issued. To avoid the need for probate Shoreline recommends that you have specified to the life insurance company whom your beneficiaries are.
Can Shoreline look after my plan?
Most likely we can look after your plan. We advise you to reach out to us with more details so that we can help you.
How much money can I expect at the end of my plan?
This is a very hard to answer question that we get asked a lot. The truth is that the final value of your plan is impossible to predict accurately as there are so many variables involved. If you want to understand the impact on your plan value should you reduce your contributions or even completely stop paying your premiums we can give you an indication. We have developed a model that will take into account the changes to the original policy conditions and calculate a new end-value using the new parameters going forward. We advise you to reach out to us with more details so that we can help you.
How does the policyholder protection work and what does it protect?
Isle of Man and Guernsey policyholder protection states that an individual policyholder receives up to (Isle of Man) or at least (Guernsey) 90% of the value of the policy should the insurance company that issued the policy not be able to meet its liabilities to the policyholder.
On the Isle of Man this is achieved via a special fund into which all the life insurance companies on the Isle of Man contribute. Should one of the contributing life insurance companies get into difficulties this fund will compensate the policyholders. Should the fund not hold enough money to compensate all policyholders of the company that is experiencing troubles a levy of maximum 2% can be charged on all other life insurance companies’ client assets. The maximum amount of compensation equals no more than 90% of the market value of policyholder’s policy value.
Guernsey operates in a slightly different way. In Guernsey at least 90% of policyholder’s assets are held outside of the life insurance company’s balance sheet with a third party trustee for the benefit of the policyholder. Effectively this means that at any time at least 90% of the assets representing the policyholder’s portfolio will be protected.
This protection system is designed never to be used as on both locations the regulators have put in place very strict solvency and liquidity requirements for life insurance companies. Inspections and regulatory checks are carried out on a quarterly basis by the local financial services authority preventing situations from getting out of control in the first place.
The protection system is designed to protect the value of the overall client portfolio in case the life insurance company cannot meet its liabilities to the client. This means that it does not protect the client’s underlying assets inside the portfolio from market fluctuations as some unscrupulous advisors claim the policyholder protection system does.
When can I reduce my contributions?
You can reduce your contributions after you have completed your initial period. However, Shoreline advices to maintain your contributions into your plan where possible. Significantly reducing your contributions immediately after you have completed your initial period will have a detrimental effect on the final value of your policy.
Shoreline recommends to start your plan on a contribution level that you, most likely, can maintain throughout the life of the policy. Naturally certain events may cause you to reduce or even stop contributing, this is normal, but try to restore your contribution level to the original level when possible.
What currency should I choose for my plan?
The currency of the plan is the valuation currency, in which you will see the bottom-line figures, of your plan and the currency in which your premiums are contributed. There are two considerations to make; first of all contribute in the currency that you get paid in. If that is not possible or not convenient consider contributing in the currency you will likely spend the saving in. If you plan to retire in the United Kingdom, but currently earn in US Dollar having Pounds in retirement in the UK makes more sense than risking having US Dollars in the United Kingdom during retirement.
For what term should I invest?
Investing for less than three to five years is not recommended as short-term fluctuations in the market can lead to negative results. Furthermore most products are not set-up for short term investing and therefore not suitable.
Shoreline recommends to select a term and a plan for each of your targets. For instance if your target is education fee planning for your five year old child then an 18 year term would match (13 years until university entry and 5 years to study). Shoreline doesn’t recommend to mix different goals with different due dates into one plan as this can lead to confusion about what money ‘belongs’ to which target.
Another smart idea involves different plans that mature at different phases in your life so that you can enjoy the liquidity of maturing plans throughout your life instead of all at the same time. For example some of our clients operate on a five, fifteen & twenty-five year schedule whereby the intensity of the contributions is focused on the shorter term plans. We advise you to reach out to us with more details so that we can help you determine the best schedule together with you.