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Maximum Investment Plans (MIPs)

A maximum investment plan is a unit linked endowment policy. It is a 10 year qualifying savings plan where part of the premium is set aside for life cover and the balance put into investments. The element of a bonus is absent since investments are tied up with unit-linked bonds and equities.

Useful for higher rate tax payers, (see tax guide for more details) this type of policy should be actively managed to get the best performance. The provider will offer a wide range of funds to choose from with varying levels of risk, with the option to switch between funds or re-direct future premiums.

 

Unit linked endowments are considered higher risk than with profit endowments as there are no guarantees. There is usually an annual management charge of around 1% and a bid/offer spread of around 5%. There is usually one free fund switch per policy year - further switches will probably incur a fee.

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UK Investments - Financial, Property & Other Investments - 1998-2008

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