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Review summary

Friends Provident International Zenith

Friends Provident International (FPI) has over 35 years of international experience and is part of the Aviva Group, which has a heritage that dates back over 300 years. 

FPI provide savings, investment and protection products to customers in Asia and the UAE.

With offices in Dubai, Hong Kong, Singapore and the Isle of Man, Friends Provident International have more than 500 staff worldwide, looking after more than 160,000 customers.

Customer Reviews
Expert Verdict

Zenith is a unit-linked international investment bond, designed to provide access to a wide range of funds - managed by investment specialists from around the world.

If you need access to your money, you can arrange for regular or one-off withdrawals. This can be up to 10% of your original payment per annum, penalty free, in the first five years – as long as you leave the minimum amount in the plan.

Zenith is not suitable if you don't have a lump sum to invest for at least five years. 

Learn more from our deep dive into Friends Provident International's Zenith Bond...

International life insurance is compulsory on this product. 

You can then pay extra to cover serious illness, accident and long term care.   Family income benefit is also available. 

Whole of life insurance is designed to provide life insurance until age 85 or 95, and is a niche tool primarily of benefit for inheritance tax  (IHT) planning. 

The unit linked element of the policy invests within a range of mirror funds, with the objective of  paying  for the increased cost of cover after the age of 55, and is not intended to be accessed as a ‘cash back’ sum, or used for retirement or other purposes.

An establishment charge of 1.6% pa is levied for the first 5 years to cover commissions paid to the adviser who sold you the plan, and to reduce risk to Friends Provident of the policy holder abandoning the plan. 

This applies to additional premiums above the minimum initial of £6,667 (or currency equivalent).

The mirror funds cost 1.2% on top of the cost of the mirrored funds - which can range from 1.5-3.5%.

If you cash in early (more than the 10% allowance), not only will you pay the remaining establishment charges dictated by however many years you have left of the 5 year initial period, but you will also pay between 1% and 5% in early surrender charges.

For example… If you were to change your mind in year 1 and withdraw, you could end up paying 17.7% on your premium.

If you have suffered a loss on your investments (because actively managed funds are unlikely to perform as expected, especially if they are mirror funds), then you could lose much more.

Learn more from our deep dive into Friends Provident International's Zenith Bond...

The Friends Provident International’s Zenith brochure states that the plan is flexible, specifically around:

  • using any combination of rider benefits
  • increasing or decreasing premiums
  • increasing or decreasing, adding or removing benefits
  • selecting how long cover is required
  • encashing when no longer required.

However, this flexibility is debatable.

The risk warning on the brochure states:

“Friends Provident International’s Zenith is a long-term commitment.  Stopping or reducing premiums may cause your policy to lapse.  If this happens, the policy will end, all benefits will stop and you will not get your money back.”

The subsequent risk warnings talk about the risks associated with the underlying investments.

This is then followed by a list of statements which, in many ways, contradict the stated purpose and purported benefits of the product to the international expats to which it is commonly sold.

It may be argued that this product is not very flexible, and is both a very expensive and an unduly risky way to purchase protection.

Most ‘advisers’ who sell Zenith forecast the underlying investment performance at 9% per annum after costs, which reduces the premium payable but, when this extremely unrealistic figure is not achieved, Zenith will request a premium increase, reduce cover or lapse the policy with no value.

Annually renewable international life insurance, or pure international term insurance, is substantially cheaper, more flexible and less risky.

You may be able to get the same level of cover at around 20% of the cost, depending on how the policy is set up.

Learn more from our deep dive into Friends Provident International's Zenith Bond...


The Pros

> Accessible
> Strong brand
> Preferred choice of expat financial advisers

The Cons

> Risk of hidden commission
> Potentially inflexible
> Commonly mis-used
What are the main risks associated with the Zenith?

Friends Provident International don’t guarantee what you will get back in the future as this depends on how well the investments perform.

• The value of the policy and any income from it can go up and down. You could get back less than you’ve paid in.

• When you cash in your policy, you may get back less than your illustration shows. This could happen for several reasons, for example if:

– Investment performance is lower than shown

– FPI's charges are higher than shown

– You take out more money than shown

• Some funds, particularly equities, carry a higher level of risk than others, and may be subject to sudden and large falls in value. This could erode some or all of your capital.

If you invest in a fund denominated in a currency different to the contract currency, the value can go up and down simply because of changes in the currency exchange rate.

• If you decide to cancel your policy during the 30-day cancellation period and the investment value has fallen or there has been an adverse movement in currency exchange rates, you will get back less than you have paid in.

• Inflation will reduce the spending power of any money you get back in the future.

And there's the risk of opaque commissions having been taken by your adviser...

What are the fees and charges on the Zenith?

• No initial charge

• A percentage of your investment buys units in the funds you choose.

The more you invest, the higher the percentage:

Investment Amount = Up to GBP24,999 Percentage = 100%

Investment Amount = GBP25,000 to GBP49,999 Percentage = 101%

Investment Amount = GBP50,000 to GBP99,999 Percentage = 102%

Investment Amount = GBP100,000 to GBP199,999 Percentage = 103%

Investment Amount = GBP200,000+ Percentage = 104%

• FPI charge for managing your policy and the investments.

They take charges in the following ways:

– An establishment charge of 1.6% a year of your initial and any subsequent investment for the first five years following your investment, taken quarterly by cancelling units.

– An administration charge of 1.2% a year out of your unit value over the lifetime of your policy.

– As an early cash-in charge from your unit value (they may take this if you cash in units within five years of making an investment or additional investment).

• FPI express the early cash-in charge as a percentage of the value of units they cancel to make your payment:

Year units cashed in* 0 

Early cash-in charge 5%

Year units cashed in* 1

Early cash-in charge 4%

Year units cashed in* 2

Early cash-in charge 3%

Year units cashed in* 3

Early cash-in charge 2%

Year units cashed in* 4

Early cash-in charge 1%

Year units cashed in* 5+ 

Early cash-in charge 0%

(*Number of complete years in respect of each investment.)

• For each of the first five years of your initial and any subsequent investment, up to 10% of each payment into your policy may be cashed in or taken as withdrawals without incurring this charge.

If you do not use part or all of your 10% allowance, the unused portion will be carried forward to subsequent years.

• If you exceed the allowance when you cash in your policy or take regular withdrawals, the charge we take will be a percentage of the value of units we cancel to pay the additional amount that is above the allowance. The value of units cancelled includes an amount to cover the early cash-in charge.

• If you cash in your policy in full and your investment and any subsequent investment(s) is still within its initial charging period, an early cash-in charge will be taken from the payment equal to any establishment charges which would have been deducted had you not cashed in the policy.

Fund charges

• In addition to the administration charge, each fund has its own annual charge taken out of your unit value over the lifetime of your policy.

The charge will depend on the fund(s) chosen.

Optional Management Authority

• If you want to, under an optional management authority agreement, you can allow your adviser to choose and, if appropriate, switch the funds you invest in.

For this service, you pay your adviser, by regular withdrawals, a percentage of your unit value over the term of your policy, taken by cancelling units on either the policy anniversary or at the end of each policy quarter.

The percentage, which must be agreed between you and your adviser, can be 0.25% a year, 0.5% a year, 0.75% a year, 1% a year, 0.15% a quarter, 0.2% a quarter or 0.25% a quarter.

Tax considerations:

Friends Provident International is a tax-exempt insurance company registered in the Isle of Man.

Consequently, Friends Provident International is not subject to income tax, capital gains tax or corporation tax in the Isle of Man or the UK.

Their funds accumulate free of tax (apart from any withholding tax on investment income, deducted at source in the country of origin).

• Tax rules are subject to change and the extent of your tax liability depends on your country of residence and personal circumstances.

What happens to my Zenith policy if I die?

If you set the policy up on your life, the policy will end if you die.

FPI will pay a lump sum equal to 101% of the cash-in value at your death.

• You can set up the policy on up to four lives, so it continues after the first death.

FPI will pay 101% of the cash-in value on the death of the last survivor only and the policy will then end.

• The death benefit is not a guaranteed amount because FPI cannot guarantee the value of your policy.

It will depend on the value of the units at the time of death.

Can I cash in my Zenith policy?

Zenith does not have a fixed investment term, so you can cash it in whenever you need to.

You should always remember however, that if you cash in your initial investment, or any additional investments within the first five years of making the payment, charges will apply.

FPI say, your money will also have a better opportunity to benefit from potential growth if invested for five years or more.

For the purposes of calculating early cash-in charges the units purchased by each payment received are treated separately.

The cash-in value is equal to the value of units held in the plan less any early cash-in charge that may apply at the time of cash-in.

The early cash-in charge will be calculated as a percentage of unit value, over and above any penalty-free allowances not used.

The percentage charge applied depends on the number of years since the payment was invested.

Any outstanding establishment charges will then be deducted prior to payment on cash-in.

So for example, if a plan was in its 3rd year and had a plan value of USD162,250 and penalty-free allowances of USD45,000, the charge would be calculated as follows: 3% of (USD162,250 – USD45,000) = USD3,517.50 plus any outstanding establishment charges.

If in doubt, request a free X-Ray Review™ and we can advise you from there.

Not what I thought I was getting

I wanted insurance, I ended up with an investment?

As an expat with many financial obligations I was looking for life insurance/assurance - and I ended up being sold this Zenith by my adviser.

I guess he took plenty for himself?

And why am I invested for life insurance?

My cash in options look bleak - I am very angry and disappointed.

Expert Assessment of Friends Provident International Zenith

Our view is that the Zenith is not an optimum solution and is only likely to be sold via banks or other commission-driven salespeople.

In many cases, this product is mis-sold, and often represents an unsuitable protection solution.

We recommend existing plan holders undertake a review from a professional, fee-based, independent financial adviser.

Better priced, more flexible and better performing options are available.

Like the horse drawn plough, this type of product is, in our view, redundant in today’s world!

If you already hold a Friends Provident International Zenith and it is worth £50,000 or more, we recommend you have a free, no obligation  X-Ray Review™ to give you the information you need to make a decision about the best way forward.

Learn more from our deep dive into Friends Provident International's Zenith Bond...

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