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(From Financial Mail)
Byline: Stafford Thomas
PREMIUM AMENDMENTS New calculus Any member of a retirement annuity (RA) fund or an endowment policy- holder is entitled to terminate or reduce premium payments. But policy payments also take into account expenses such as commission to advisers, marketing and administration costs incurred by life insurance companies. Thus if a policyholder stops paying premiums, reduces them or changes the policy term, the policy value must be actuarially recalculated. Almost inevitably, the value of the policyholder's fund is impaired.
In the past this has often resulted in significant falls in fund values. However, the …