- Knowledge Centre
The Generali Worldwide (formerly Generali International) Vision savings plan has historically been a mainstay of international regular investment schemes.
It is an offshore regular savings plan which legally contracts you to save an agreed amount on a regular basis for a pre-agreed number of years. A Generali Vision should NEVER be taken out unless you fully intend to contribute for the entire term agreed. Here's why...
Generali Vision is a regular premium, whole of life, life assurance contract issued by Generali International. It is characterised by its offering a wide range of available investment funds and relatively short initial periods (when initial units as opposed to accumulation units are being purchased). As specialists in this marketplace, Generali International have good administrative and technological systems in place.
It is relatively easy for this endowment-type of regular savings plan to be mis-represented. The main area of contention is often to do with a lack of perceived flexibility and difficult to understand charging structures. Many plan holders are often also unaware that upon early full encashment most, if not all, of the first 18 months – 2 years premiums are lost through surrender charges.
Although this regular savings plan is probably the market leader within this type of product, this entire family of offshore savings policy (known as Maximum Investment Plans) has now been superseded by other better options.
A little like bookshops being replaced by Amazon, the outdated construction of this plan now makes it a relatively unattractive option for many international investors who wish to maximise their return.
Generali Worldwide Vision Savings Plan charges
The Generali Vision Plan is a regular premium, whole of life, life assurance contract, these are its charges: -
Charges - Will vary according to the type of plan taken out from Generali as they offer different charging structures largely linked to the amount of commission or earnings being taken by the third party salesman or adviser.
The Initial Period is determined by the Premium Payment Term of your Plan. It is the period after Plan commencement during which Initial Units are allocated. The Initial Period (in years) is equal to the total administration fees due over the Premium Payment Term divided by the initial annualised Regular Premium. (If the premium payment frequency of your Plan is monthly, your annualised Regular Premium is the monthly premium multiplied by 12.)
In summary, Initial Units incur additional charges at commencement, and then throughout the term and may be worthless if you cancel the policy early.
Where a Premium Payment Term of five years or more is selected at Plan commencement:
Where a Premium Payment Term of ten years or more is selected at Plan commencement:
£3 per month or currency equivalent.
Applies only to single premiums and levied at 1.5%
Investment administration charge:
1.5% per annum is deducted annually in arrears from the Accumulation Units allocated to the Plan.
Charges within the underlying fund:
Internal Funds bid/offer spread - 0% to 1%, External Funds bid/offer spread - 0% to 2%. Internal Funds AMC – 0%, External Funds AMC – 0.5% to 3%.
The fees and their structure look frighteningly high.
Early encashment warning - A full encashment results in penalties being applied through surrender charges linked to the term of the policy. In essence, all your premiums are forfeited if surrendered during the initial period. For a 25 year plan, this period would be 23 months.
It is important to be aware that the Generali Vision Plan is a long term savings plan, if you decided to cancel the plan early it is likely that you will lose a large proportion of the money you have saved.
It offers a selection of around 200 investment options, from leading external fund managers and internally managed funds by Generali Worldwide, to match a wide variety of investment profiles.
You may select up to 10 different investment choices corresponding to underlying funds at outset into which your premiums may be invested, provided that the amount to be allocated in relation to each investment choice is above the minimum allocation requirement.
Policies are available in GB pound, Hong Kong dollar, Japanese yen or Euro.
The minimum regular premiums for terms of more than 10 years are:
£200 Monthly, £600 Quarterly, £1,200 Half Yearly, £2,400 Annually (or currency equivalent.)
For plans with a premium payment term of less than 10 years, the minimum regular premiums are 2.5 times those above.
I had absolutely no idea this wasn't a flexible savings policy - because I'd specifically ask for a flexible savings account. I was sold a load of flannel from an IFA my brother recommended to me - and when I tried to access my savings to invest in my new business I discovered everything was effectively gone. The IFA told me if I carried on saving my money would come back in to play - or he offered me an alternative savings policy. Funniliy enough I didn't take any of his advice again.