Latest offers from Ark Life, Norwich Union sure to attract

Just when insurance salespeople thought the price of life insurance could not get cheaper, Ark Life, the AIB bank assurance arm dropped its rates this month by as much as 20 per cent in some instances.

Now Norwich Union has reduced its level and convertible term rates for all ages and terms for single life male and female, smokers and non-smokers and has pledged to match any lower rate that a broker may find from the other 10 broker distributor companies on the market.

Norwich Union's offer is good for clients who deal with mainly commission-paid brokers, but the Equitable Life, and now Ark Life offers among the cheapest term rates. It does not pay broker commissions, however, and clients must contact these insurers directly.

Meanwhile, Norwich Union has pointed out that they were disappointed to find that their new Portfolio Bond, which was only just introduced in June was left out of the survey we published last week which showed the effect of charges on similar type unit-linked bonds currently on the market.

The portfolio, from which the investor makes their choice of fund, consists of international equity funds, an Irish equity fund, managed funds, a fixed interest and cash fund. Norwich Union's investment team took over the management of these funds from Swiss Life in December 1995 and renamed them the NU funds; that year the funds were, in Norwich's own words "languishing at the bottom of all independent surveys measuring fund performances".

The 12-month and two-year record now shows the NU funds all within first, third or fifth place performers, with the exception of the two-year fixed interest fund, where NU is ranked 19th out of 27 funds.

As for the table we published, Norwich has pointed out that based on the same assumptions a sum of £10,000 invested for five years and 10 years and achieving a 7 per cent return would result in the Portfolio Bond achieving a £13,148 return after five years, putting it in second place behind Equitable Life (at £15,152) and just ahead of GA Life (at £13,138).

Over 10 years, the picture is the same: the Norwich bond would achieve a return of £17,803, a second place finish again after Equitable Life (£18,020) and just ahead of GA Life (£17,524.)