‘Simple’ bank deposits do not give a great financial return. One way, companies can turn surplus funds into a more generous return (net of tax and expenses) could be in one of two or both investment options. These are company-owned life assurance contracts and company-owned capital redemption contracts.

A life assurance contract must have the following elements: (a) the insured must have an insurable interest in the life assured; (b) the contract must provide that the insured will become entitled to something on the death of the life assured.

The contract will usually contain additional elements including the right to surrender the value of the contract at any time. It is the ability to surrender which makes this type of contract an ‘investment’.

A capital redemption contract is one which, in return for one or more fixed payments, a sum or series of sums of a specified amount (based on actuarial calculations) are payable at a specified time.

To discuss how you can take out these contracts and find out what return they could yield, contact us at FOL Wealth.