Premier Advance is a regular savings plan from Friends Provident International (FPI), which was sold widely to expats and is still held by many. If you hold it, or have been offered it, you will want to know how it works, what it costs, what leaving early would cost and whether your circumstances still fit it. This page sets all of that out using FPI’s own key facts form.
It is general information for UK expats, not personal advice. The figures come from FPI’s Premier Advance key facts form PAI2, dated November 2012 (print code 02.18). It is an older document and terms may have changed, so your own policy schedule is what counts. Check every number against it.
This guide sits under our section on regular savings plans for expats. You can see every plan we cover on our expat savings plan reviews page.
FPI Premier Advance at a glance
| Feature | Summary |
|---|---|
| Provider | Friends Provident International Limited, Isle of Man |
| Status | . FPI may have restricted new sales in some countries |
| Term | Set in the policy schedule as the Option Date |
| Minimum premium | Regular premium cannot be reduced below USD 300 a month |
| Top-ups | Minimum USD 3,000 additional single premium |
| Funds | Up to ten FPI funds at once, plus a Lifestyle Investment Option |
| Main charges | Initial charge, plan charge and administration charge of 1.2% a year, plus fund charges |
| Loyalty bonus | About 0.5% a year after year ten, on terms over ten years |
| Death benefit | 101% of the bid value of units |
What is Premier Advance?
Premier Advance is a regular premium investment plan. You agree a premium and a term, and your payments buy units in FPI funds. The value goes up and down with the funds, and nothing is guaranteed. FPI is based in the Isle of Man, is part of a large international insurance group, and sells through financial advisers.
FPI no longer promotes every plan in its range equally, and the key facts form itself allows FPI to raise the minimum top-up amounts if it stops promoting the plan. Whether Premier Advance is open to new customers where you live is something to confirm directly. Many of the clients who contact us hold it already and want to understand it.
Who it may suit, and who it may not
It may suit you if:
- You can keep paying for the full term and hold an emergency fund separately.
- You are well into your term and the cost of leaving would be high.
- You want a lifestyle option that moves your money into lower-risk funds as the end approaches.
It may not suit you if:
- You might need to stop paying in the first five years, when the penalties are heaviest.
- You want to hold more than ten funds at once.
- You are being offered it mainly on the strength of an adviser’s recommendation, without a total cost in money.
How the plan works
The initial period and the Option Date. Premier Advance has an initial period that runs from the start until the Option Date, both set in your policy schedule. During the initial period your premiums buy initial units. Afterwards they buy accumulation units. Initial units carry the heavier charge. At the Option Date you can make the policy paid up, converting initial units to accumulation units, or surrender it for the value of the units.
Premiums. The regular premium cannot be reduced below USD 300 a month (or USD 900 a quarter, USD 1,800 half-yearly or USD 3,600 a year). Increases must be at least USD 50 a month, and they buy initial units until the next initial period ends. Additional single premiums start at USD 3,000. All of these carry their own charges, so check the cost before adding to the plan.
Currency. The policy currency is set in the schedule and the form quotes figures in US dollars. Changing the policy currency is free, though FPI may charge USD 250 with a month’s notice.
Funds. You can hold units in up to ten FPI funds at once. The Lifestyle Investment Option moves money gradually into lower-risk funds, starting three, five or ten years before the Option Date. Switching between funds is allowed and no switch charge currently applies, although FPI reserves the right to charge up to 1% or USD 15.
Charges explained
| Charge | How it works |
|---|---|
| Initial charge | Set in your schedule. Taken by cancelling initial units every three months, from three months after the start until the Option Date |
| Plan charge | Set in your schedule. Taken monthly by cancelling accumulation units |
| Administration charge | 1.2% a year of the fund value, taken at each valuation. FPI can change it on a month’s notice |
| Additional single premium charge | 7% of each top-up |
| Enhanced initial unit recovery charge | A formula-based charge on enhanced initial units if you stop or reduce within the first five years |
| Switch charge | Up to 1% or USD 15 if greater. None currently applies |
| Fund charges | Set by the fund and built into the price |
What this means. The initial charge and plan charge are not stated in the form. They appear on your policy schedule, so that is the first document to find. The 1.2% administration charge is a recurring annual cost, and it applies on top of fund charges. The 7% on top-ups is high, so adding a lump sum to this plan deserves a comparison with other ways of investing it.
Adviser fees. Any ongoing fee to an adviser is separate from these charges and may be taken from the plan. Ask what you are paying and what you receive for it.
Loyalty bonus
If your premium payment term is more than ten years, FPI pays a loyalty bonus after the tenth anniversary and on each monthly anniversary while premiums are being paid. Each month it adds one-twelfth of 0.5% of the policy’s bid value as accumulation units, which is about 0.5% a year. The bonus is paid for by the plan’s charges, and it only applies while you keep paying.
Surrender and early exit charges
Surrender charges are a percentage of the initial units’ value and fall as the remaining term shortens. Initial units have no surrender value until after the first anniversary and at least 12 months of premiums. The form gives this table by years remaining.
| Years remaining | 25 | 20 | 15 | 10 | 5 | 3 | 1 |
|---|---|---|---|---|---|---|---|
| Charge on initial units | 100% | 81% | 64% | 48% | 30% | 18% | 6% |
In the first five years the enhanced initial unit recovery charge is applied before the surrender charge. A surrender charge also applies if the original premium has not been paid in full for at least 48 months in total. These apply to the initial units, not the whole fund, so what you actually lose depends on how many initial units you hold. Ask FPI for a written surrender value before deciding anything.
Pausing, stopping and withdrawing
Pausing. After the initial period you can suspend premiums for up to 12 months by written notice. Charges continue during that time. If payments do not restart within a month of the suspension ending, the policy becomes paid up.
Missed payments. If no premium is paid for 90 days the policy becomes paid up. During the initial period that results in encashment, with surrender charges. Suspensions or reductions in the first five years can trigger the enhanced recovery charge.
Withdrawals. Withdrawals are by written request, from the accumulation units only, with a minimum of USD 750. The plan value must stay above USD 2,000. Regular withdrawals can be monthly, quarterly, half-yearly or yearly, or timed to school terms, and are allowed while premiums are suspended or the policy is paid up. If there are no accumulation units, no withdrawals are possible.
Death benefit
On death FPI pays 101% of the bid value of the units, after deducting any money owed to it. For joint lives it pays once, on the death of the last survivor. No enhanced recovery charge applies on death. How the money is then treated depends on ownership and any trust. See our guide to wills and trusts for UK expats.
Tax for UK expats
The plan is issued in the Isle of Man, but that does not make it tax-free for you. Tax depends on where you are resident when you surrender, withdraw or die. If you return to the UK, gains can be taxed as chargeable event gains, which can be significant. See our guides to offshore investment bonds and inheritance tax for UK expats.
If you hold Premier Advance now
There is no single right move. Keeping paying to the end often works best if you are well into the term and the funds are suitable. A fund review costs nothing in plan charges and can fix poor fund choices. Suspending premiums keeps the plan alive but charges continue. Moving to a newer plan starts a new term and new front-loaded charges, and surrendering Premier Advance has its own cost. Compare the total cost of staying and of moving, in money, over the same period. Our guide to RL360 Quantum shows how we approach an older plan, and the RL360 Regular Savings Plan and Zurich Vista are examples of current alternatives.
How to find out what your plan is worth
- Find your policy schedule for the initial charge, plan charge, term and Option Date.
- Ask FPI for a written surrender value now and at the end of the next three years.
- Ask for the charges you have paid in the last 12 months, in money.
- Check which funds you hold and what each charges a year.
- Check whether an adviser is still being paid from the plan.
FPI Premier Advance: frequently asked questions
1. Can I still buy Premier Advance?
It depends on your country and FPI’s current range.
2. What is the Option Date?
It is the end of the initial period, set in your schedule. You can then make the policy paid up or surrender it for the value of the units.
3. What happens if I stop paying?
After the initial period you can suspend premiums for up to 12 months. After 90 days without payment the policy becomes paid up, and during the initial period that means encashment with surrender charges.
4. How much will I lose if I cancel?
The charge falls with the remaining term, from 100% of the initial units with 25 years left to 6% with one year left. Ask FPI for a written figure.
5. How many funds can I hold?
Up to ten FPI funds at once.
6. Is there a bonus?
A loyalty bonus of about 0.5% a year applies after year ten on terms over ten years.
7. Can I take money out?
Yes, from accumulation units, with a USD 750 minimum, while keeping the plan above USD 2,000.
8. What is paid on death?
101% of the bid value of the units, after any money owed to FPI is deducted.
9. Should I move to a newer plan?
Only if the figures clearly support it after the surrender charge and the new plan’s charges.
10. Can you review my Premier Advance plan?
Yes. Send us your latest statement and policy schedule and we will set out the costs and your options.
Get your Premier Advance plan reviewed
If you hold Premier Advance or are being offered it, we can show you what it costs, what you would get back if you stopped and whether a different route is worth considering. Request a callback and we will arrange a time that suits your time zone.