Friday, August 10, 2012

Danica Life (Ireland) - What to do?

Danica Life are exiting the Irish market. It will cease trading as a life insurance company here on 31st December 2012.

The current book of business will be transferred on 31st October to the parent company in Denmark. The exception to this is their PRSA business which will have to be transferred to another PRSA provider here in Ireland.

It appears that online access to policyholders accounts, who stay with Danica, will not be available after the transfer to Denmark.

The original service Danica offered was on an ‘execution only’ basis but it is now recommending that policyholders seek financial advice before they make any decision on surrendering or transferring to another company before the transfer date.

If policyholders have to get financial advice they will have to pay for this either by fees or by entry/exit charges on the ‘new’ products that they will be investing in.

If policyholders were able to navigate the Danica products on an ‘execution only’ basis ( ie no advice) originally, then I don’t see why they can’t do so again if they are transferring to other products here. If policyholders are in the market for this type of service then they might consider the following.

The Personal Pensions, Executive Pensions, Pension Retirement Bond and PRSAs can be purchased on a ‘no advice’ basis via . There are no entry/exit charges, no policy fees and there is a single annual management charge of 1%pa.

As for the Investment Bond, well that’s a bit more tricky because of the tax implications of surrendering the Danica plan as you can’t offset the loss on a Danica fund against another fund. However, if the gain/loss is only marginal and the policyholder is adamant about surrendering the Danica fund then they might look at what’s available via or . Both of these sites offer low-cost execution only products.

The Danica Life exit announcement also refers to Mortgage Protection and Term Insurance products that they may have sold. Again, the policyholder can change provider if they wish and I’d be surprised if they couldn’t get a cheaper policy in the Irish market. Caveat : if policyholders are switching providers, make sure that you have the new policy in place (on cover) before cancelling the old one.

Declaration of Interest : The above execution only sites are operated by the author.

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