Maximum Investment Plans

A maximum investment plan is a unit-linked endowment policy. It is a 10-year qualifying savings plan where part of the premium is set aside for life cover and the balance put into investments. The element of a bonus is absent since investments are tied up with unit-linked bonds and equities.

Useful for higher rate taxpayers, this type of policy should be actively managed to get the best performance. The provider will offer a wide range of funds to choose from with varying levels of risk, with the option to switch between funds or re-direct future premiums.

Unit linked endowments are considered higher risk than with profit endowments as there are no guarantees. There is usually an annual management charge of around 1% and a bid/offer spread of around 5%. There is usually one free fund switch per policy year - further switches will probably incur a fee.