FAQ international investment plans

Please check out the below FAQ on international investment plans and general investment policy maintenance.

Other advisers work for free, why do you charge a servicing fee?

Nobody works for free and those who claim they do only want to sell you a plan, not look after it. They don’t have your best interest in mind. Selling 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 wants you to hit your targets 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 plans work and misinform, on purpose or by accident, their clients. Each plan works slightly differently so going into full detail in this FAQ on international investment plans 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 international investment 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. You send this form, together with your details, certified proof of identity and residential address confirmation to the provider. Each provider follows the obligatory standard anti-money-laundry rules. 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?

As a rule of thumb we advise clients to expect 7-10 working days. This period starts once the provider receives all the necessary documents for 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?

If the plan owner dies, without appointing beneficiaries, the insurance company might require probate. The life insurance company requires a court order before it can pay out the proceeds of the plan. If the life insurance company pays out to the wrong beneficiary it needs to pay out to the rightful beneficiary as well. To avoid this risk the local court will first determine who the rightful legal beneficiary is. Once the court issues probate the life insurance company can act without risk. Obtaining probate involves a local lawyer and a local court. It can take up to six months to issue probate, not to mention the costs.  To avoid the need for probate Shoreline recommends that you specify who your beneficiaries are to the life insurance company.

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?

Clients ask this question a lot, but it is a very hard question to answer. The final value of your plan is impossible to predict accurately as there are so many variables involved. We can give you an indication of your plan value, should you reduce or stop your contributions completely. Using the new parameters and the original policy conditions our calculation model calculates a new end-value. 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 all the life insurance companies contribute into a special fund. Should one of the contributing life insurance companies get into difficulties this fund will compensate the policyholders. The maximum amount of compensation equals no more than 90% of the market value of policyholder’s policy value. In case there are insufficient funds available to compensate the policyholders sufficiently, the protection fund can charge a maximum levy of 2% across all participating insurance companies.

Guernsey operates in a slightly different way. Life insurance companies in Guernsey hold at least 90% of policyholder’s assets outside of the company’s balance sheet. A third party trustee acts as custodian for the assets on behalf of the policyholder. This system ensures that assets representing at least 90% of the policyholder’s portfolio are protected.

The design of the protection system in both locations focuses on prevention. The regulator enforces very strict solvency and liquidity requirements on all life insurance companies. The local financial services authority carries out quarterly inspections and checks. This prevents any potential issues 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. Market losses on assets linked to the policyholder’s plan are not covered by the protection system.

When can I reduce my contributions?

You can reduce your contributions after you have completed your initial period. However, Shoreline advises 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 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, it makes more sense to have Sterling in retirement than US Dollars.

For what term should I invest?

We don’t recommend to invest for less than three to five years as short-term market fluctuations can lead to negative results. Furthermore, most products are not set-up for short term investing and therefore not suitable. Shoreline recommends to set up a separate 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 goals with different due dates into one plan. This can lead to confusion about what money ‘belongs’ to which target.

Another smart idea in this FAQ involves international investment plans that mature at different phases in your life. This way 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.

Contact us with more details, so that we can help you determine the best schedule for you.