Comparison of With-Profit Annuities

Equitable Life and Norwich Union

Comparison of With-Profits Annuities

Equitable Life and Norwich Union

As it happens I have two With-Profits policies one with Equitable Life and the other with Norwich Union. They are of course of different amounts and the annual renewal dates are not the same, but the comparison between the two is very interesting.

The details are as follows:

As is immediately obvious in the comparable period, when the Society was claiming all sorts of problems with the Stock Market, returns on investments, etc Norwich Union has made quite inconsequential reductions. Or in other words, the swingeing reductions imposed on the WPAs may or may not be necessary but the reasons given by the Society for them are nothing to do with the prevailing financial conditions external to the Society.

The other marked difference is that Norwich Union has offered three choices:

a)      Leave the Anticipated Bonus Rate at the current level but expect in all probability a reducing income in the near future.

b)      Reduce the Anticipated Bonus Rate so that the annuity stabilises and may increase.

c)      Switch to a conventional annuity. (that is a level guaranteed payment each year)

I have asked for quotations and will advise what these are as and when I receive them.

It is interesting to try to understand why the Society has not offered these choices to its With-Profits Annuitants.