FAQ’s

Ideally, life companies should allow their policies to be split into a number of separate ‘mini policies’ – usually known as segments or clusters – as this adds to the flexibility of the policy, and has several advantages for tax-planning purposes in many jurisdictions. Each ‘segment’ is usually treated as a separate policy and this makes a policy issued with multiple segments a great tax planning tool.

In simple terms, dollar cost averaging (Unit cost averaging) is a theory which means using regular saving to help smooth out stock market investment volatility. The key point about dollar cost averaging is to invest a small amount on a regular basis. When prices are high, the regular premium will buy fewer units of the chosen funds, but when prices are low the premium buys more. This means that the price at which units are bought could be averaged over the term of investment, hence the name dollar cost averaging. Over the long term, this strategy could increase your purchasing power and give a potentially higher average increase in unit price over time which in turn improves potential returns.

A derivative is a financial product whose value is derived from the value of an underlying security, index, commodity or rate. It is a financial contract between a trader and a provider to exchange future cash flows.

Exchange Traded Funds (ETFs) are passively managed investment funds that are publicly tradable intraday on a regular stock exchange in the same way as a company stock. An increasingly popular product, ETFs combine the benefits and ease of investing in stocks with the advantages of mutual fund investing and index tracking.

Exchange Traded Funds track an index or benchmark, hence the objective for an ETF is to replicate the performance of the index or benchmark that it is tracking. ETFs track specific stock, bond, commodity or currency indices, some of which have a regional focus, while others have a sector focus.  They are therefore ideal for diversifying a trader's portfolio.

An ethical fund is an investment vehicle that will only invest in companies with a social, moral or environmentally responsible agenda. Each fund has its own set of criteria and rules about the types of companies in which it will and won't invest.

SRI (Socially responsible Investment) funds are slightly broader in their investment approach than ethical funds. For example, an ethical fund might never invest in a company that practices animal testing, whereas an SRI fund might, but only if it was animal testing for life-saving medicines.