Collective Investment bond
Key features
Its aims
• To obtain future capital growth through investment
in a wide range of tax-efficient funds.
• To give you easy access to your investment.
• To allow you to make UK tax-efficient regular
withdrawals.
Your commitment
• You make lump sum payment at the start.
• You may make further lump sum payments
whenever you like.
• The Bond should be regarded as a medium to long
term commitment.
Risk factors
• Investment returns will fluctuate. If they are less
than shown in the enclosed tables, the amount you
get back will be lower than shown.
• The funds that you can invest in have different levels
of risk. Further details are available from your
Independent Financial Adviser.
• Where a fund holds investments in another currency,
there may be additional risks because of exchange
rate fluctuations.
• If you cash in the Bond soon after it starts, you may
get back less than you paid in.
• If you take cash withdrawals within a defined period
of making a payment, you may incur charges.
However, you can withdraw a certain amount each
year without an Early Encashment Charge.
• If you take withdrawals from the Bond which are
more than the growth achieved you will get back less
than you have invested.
• The value of the Bond will fluctuate from day to day.
If your circumstances change you may find you need
to cash in when values are low.
• Charges may turn out to be higher than those used
in the enclosed table.
How does the Bond work?
• The Collective Investment Bond is an insurance bond
designed to increase the value of the capital you
invest.
• Although there is no fixed investment term,
examples of how the value of your Bond may
accumulate are shown in the enclosed tables.
• Your Bond is a unit-linked life assurance contract
which may be divided into a number of individual
policies. This may have certain UK tax advantages
when withdrawing cash.
The leader in MultiManager investment
• Your payment will be allocated to units in a fund
linked to investments chosen by you.
You are required to choose that a certain amount of
your payment is invested in the Royal Skandia
Deposit Fund in order to provide liquid assets to
meet ongoing charges. You are also advised to have
sufficient monies invested above this minimum to
meet any regular withdrawals. The current
minimum is 2%.
If there are insufficient liquid assets to meet charges
or withdrawals then investments will be sold from
the largest holdings. There may, therefore, be delays
in paying any withdrawals until the proceeds have
been realised.
• The amount you get back when you cash in your
Bond will depend on:
– how long your payments have been invested
– the investment performance of your chosen fund(s)
– how much you may have previously withdrawn
– the charges which have been deducted.
What investment funds are available?
• A wide range of funds is available. Your Independent
Financial Adviser will help you choose the fund(s)
most suited to your personal circumstances.
• You can choose to invest in Royal Skandia’s internal
funds which are managed by highly regarded
investment companies such as Barings, Deutsche,
Fidelity, Flemings, Gartmore, Investec, Henderson,
INVESCO PERPETUAL and Schroders.
• You may also choose to invest directly in other funds
managed by an extensive list of top investment
groups, as detailed in the ‘Fund Management Groups’
list.
• You can change your fund choice whenever you like.
• Further information about the funds can be obtained
from your Independent Financial Adviser or Royal
Skandia.
When can you take money out?
• You may cash in your Bond in full or part at any
time.
• You can take regular cash withdrawals, depending
on any restrictions of the funds you have chosen to
invest in.
• A charge may be made when you cash in your
Bond.
 What is the tax situation?
• The funds in which you invest are not currently liable
to Isle of Man taxes. However, investment income
accruing to any fund may be subject to a tax
deduction at source withheld in the country of origin.
• Your personal tax situation will depend on your
country of residence.
• If you are a UK resident:
– you can take up to 5% a year, for twenty years,
of the premium paid without any immediate liability
to income tax.
– when you finally cash in your Bond, you may have
to pay tax on the profit you have made.
• Tax rules may change in the future.
• Your Independent Financial Adviser can provide
advice regarding your personal tax situation.
What happens on death?
• 101% of the cash in value of your Bond will be paid
after notification of death (of the last person to die,
if more than one person). The Bond will stop at this
time.
• For an increased cost, you can arrange for a higher
amount to be payable.
• For UK tax purposes, your Bond will be treated as
though it had been fully cashed in just before death.
Can Royal Skandia change the terms of the
contract?
• Royal Skandia reserves the right to amend certain
contractual terms, as explained in detail in the Policy
Terms which are available on request from your
Independent Financial Adviser or Royal Skandia. In
the event of such amendments you may, if you wish,
terminate the contract by exercising your option to
surrender your Bond.
Further information
How can you make payments?
You can pay by cheque or telegraphic transfer in most major
currencies.
Can an application be cancelled?
After your application has been accepted you will receive a
notice of your right to cancel. You will then have 14 days to
change your mind and cancel your application.
Any money paid would be refunded. However, you might not
get back a full refund if your chosen fund(s) have reduced in
value at the time the Cancellation Form is received by Royal
Skandia. Investors should appreciate that this reduction could
be substantial for higher volatility funds. The description of
the fund(s) you have chosen will give details if this applies.
How do you cancel your Bond in future?
You may cancel your Bond at any time by sending written
notification and your policy documents to Royal Skandia’s
Head Office. You should contact your Independent Financial
Adviser first to discuss the options available to you.
This piece of literature is available on the Royal Skandia Web Site.
Royal Skandia Life Assurance Limited (an incorporated company limited by shares)
Registered and Head Office: Skandia House, King Edward Road, Onchan, Isle of Man, IM99 1NU, British Isles
Telephone +44 (0)1624 655 555 Facsimile +44 (0)1624 611 715 Registered Number: 24916 Isle of Man
Member of the Association of International Life Offices Authorised by the FSA
The rules and regulations made by the FSA under the Financial Services and Markets Act 2000 for the protection of investors may not apply to persons outside the UK
www.royalskandia.com
SK1170/22-1159
Where can you find full details of the Bond?
This document should be read in conjunction with the
enclosed tables. It does not provide full details of the Bond;
these can be found in the Collective Investment Bond Policy
Terms. Descriptions, including charges, of any fund you may
wish to select are available from your Independent Financial
Adviser or Royal Skandia.
Which legal system applies to the Bond?
The Bond is governed by and shall be construed in accordance
with Manx law.
Who should you direct complaints to?
If you wish to complain about any aspect of the service you
have received, please contact the Compliance Officer at Royal
Skandia’s Head Office at the address shown.
If your complaint is not dealt with to your satisfaction, you
may refer the matter to the Financial Ombudsman Service,
South Quay Plaza, 183 Marsh Wall, London, E14 9SR.
Making a complaint will not prejudice your right to take legal
proceedings.
Investor Protection
Holders of policies issued by Royal Skandia will not be
protected by the UK Financial Services Compensation Scheme.
The Isle of Man Life Assurance (Compensation of
Policyholders) Regulations 1991 protects investors whose
policies are effected on or after 1 February 1991. Compensation
of up to 90% of the value of their policies would be received in
the unlikely event that their insurer became unable to meet its
liabilities.
About Royal Skandia
Royal Skandia is part of Skandia Insurance Company Limited,
which is one of Europe’s oldest and largest insurance groups,
with operations in over 20 countries and assets in excess of £69
billion.
Royal Skandia’s products are available only through
Independent Financial Advisers.
ROYAL SKANDIA LIFE ASSURANCE LIMITED
SKANDIA HOUSE, KING EDWARD ROAD, ONCHAN
ISLE OF MAN IM99 1NU, BRITISH ISLES
Royal Skandia is authorised under the Manx Insurance Act
1986 and is a member of the Association of International Life
Offices. Royal Skandia is authorised to carry out investment
business in the UK and is authorised by the FSA, the
regulatory body governing life assurance business in the UK,
under the Financial Services and Markets Act 2000.
The rules and regulations made by the FSA under the Financial
Services and Markets Act 2000 for the protection of investors
may not apply to persons outside the UK.
This document is based on Royal Skandia’s interpretation of
Isle of Man law and UK Board of Inland Revenue and Isle of
Man Treasury practice at November 2002. While this
interpretation is believed to be correct, Royal Skandia can
give no guarantee in this respect or that tax reliefs and the tax
treatment of investment funds will remain the same in the
future.
November 2002 0000.02/11/6