Savings element

Savings element

Used in the context of life insurance, the cash value built up in a policy, which equals the amount of premium paid minus the cost of protection. This excess is invested by the insurance company, and the returns are tax-deferred inside the policy.

Savings Element

The portion of a whole life insurance policy that is set aside and invested by the insurance company. Part of the policyholder's premium each month becomes part of the savings element, as do any gains from investment. The savings element becomes available to the policyholder upon the cancellation of the policy. Furthermore, the savings element is an asset belonging to the policyholder; it can be borrowed against or used as collateral. The amount of money in the savings element is called the cash-surrender value. Any investment gains in the savings element are tax-deferred until the policy is canceled.
References in periodicals archive ?
To be eligible, customers must: Be receiving the Savings or |Guarantee & Savings element of the State Pension Credit Be receiving eligible means-tested |benefits Have a household income below PS16,010 and have a disability or longterm illness Or have a household income of |below PS16,010 and be spending more than 10% on fuel for adequate heating (usually 21 degrees for the main living area) Applications can be made by calling 0800 072 8625 (for credit meter customers), or 0800 294 8604 (for Pay as You Go customers).
The discount is available to the most vulnerable, including pensioners receiving the savings element of pension credit, those with chronic illnesses or mobility problems and households with very young children with an income of less than PS16,192 and receiving benefits such as Child Tax Credit.
To be eligible, customers must: | Be receiving the Savings or Guarantee & Savings element of the State Pension Credit | Be receiving eligible means-tested benefits | Have a household income below PS16,010 and have a disability or long-term illness | Or have a household income of below PS16,010 and be spending more than 10% on fuel for adequate eating (usually 21degC for the main living area) Applications can be made by calling 0800 072 8625 (for credit meter customers), or 0800 294 8604 (for Pay as You Go customers).
Depending on the customer preference, applicants can increase the insurance element or savings element in the scheme.
Because of the savings element, premiums tend to be higher.
Endowment plans, on the other hand, have a savings element that provides returns higher than those in normal bank accounts.
In fact, there has been some movement among ISA providers in recent times to promote the savings element they offer.
Term insurance is pure insurance; it includes no savings element.
Bear in mind that a proportion of the monthly premium goes towards the savings element, with the majority of your premium allocated to cover the cost of your life cover.
In many instances they allow borrowers to overpay or underpay, top up the savings element or dip into it when necessary.
44 per cent from the society's standard variable rate until March 31, 2009, with the same interest rate effectively being applied tax free to the savings element of the account.
The interest rate on the savings element can be good and the flexibility to over pay or under pay may prove useful.