How to read the annual statement of your investment policy
Once a year a document full of numbers arrives. Most people look only at the bottom line. Here is what each part means and what to ask.
In short
The account value is the units you hold times their price on the statement date; the surrender value can be different, especially in the early years. One bad year does not tell the whole story: look at the trend over the years and at your goal.
- Compare what you paid during the year with what was invested and with the charges.
- Keep the annual statements together, and note each year in one line: payments, value, surrender value, charges.
- Check that your beneficiaries and details are correct.
- If something does not make sense, ask for an explanation in writing before making any decision.
At a glance
- The account value is the units you hold times their price on the statement date.
- Compare what you paid during the year with what was invested and with the charges.
- The surrender value can differ from the account value, especially in the early years.
- One bad year does not tell the whole story; look at the trend over the years and at your goal.
The main parts of the statement
| What it says | What it means |
|---|---|
| Premiums paid | What you paid during the year (and often since the start). |
| Amount invested / allocation | The part of the premiums that bought units, and in which funds. |
| Number of units | How many units you hold in each fund. |
| Unit price | The price of each unit on the statement date. |
| Account value | Units times price, for all funds together. |
| Charges | The cost of life cover, management, the policy and others, as the terms set out. |
| Surrender value | What you would get if you cancelled today, after any surrender charge. |
| Sum insured | What the beneficiaries would receive if the insured person died; how it relates to the value is set by the policy. |
Three comparisons that say a lot
- Payments and investment. Of what you paid, how much was invested? The difference is charges and cover; it is usually larger in the early years.
- Last year and this year. If the value changed, was it prices, new contributions or charges? The statement usually shows all three.
- Value and goal. Are you where you expected for the time left? If not, the answer may be the contribution or the time, not necessarily the fund.
If something is unclear, ask for an explanation in writing. It is your right to know what you pay and why. For funds and the risk indicator, see the guide Investment funds in plain words.
Questions worth asking
- Which charges were taken this year, and how much was each?
- What is the surrender value today, and why does it differ from the account value?
- What is the sum insured, and how is it worked out on death?
- Can I see the value and unit prices during the year, not just once?
What you can do now
- Keep the annual statements together, so you can see the trend over the years.
- Note on one line each year: payments, value, surrender value, charges.
- Check that the beneficiaries and your details are correct.
- If something does not make sense, ask for an explanation in writing before deciding anything.
This is education, not investment advice or a recommendation of any fund or product. Past returns do not guarantee future ones, and the value of an investment can go down as well as up. Which fund suits you is for a licensed advisor to judge, assessing suitability from your goals, time horizon, financial situation and tolerance for risk (Article 30 of the Insurance Distribution Directive, IDD). AVRASTRO is not an insurer.
Read also: Investment funds in plain words · Switching funds over the years · Surrender: why you get less in the early years
