Individual Savings Accounts (ISAs)

What can the ISA life insurance component include?

The life insurance component of an ISA can include

  • ‘unit linked’ or ‘investment linked’ policies. This is like a ‘pooled’ investment such as a unit trust
  • ‘with profits’ policies. This is a more traditional type of life insurance policy where you participate in the profits the insurer makes from investing your premiums through ‘bonuses’ which the insurer declares, usually once a year.

The life insurance component can include only certain life insurance policies on the saver’s own life, which are specially designed for ISAs. These may be the ISA manager’s own policies, or the ISA manager may offer a range of policies from different insurers.

ISA policies must meet a number of conditions to qualify. Managers of life insurance ISAs will be able to give you details of their own policies.

After 5 April 2005, life insurance policies can still be held in an ISA, but will usually be one of the investment options in the stocks and shares component.

Information about holding cash in the stocks and shares or insurance component.

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