Charges and Fees

• When you take out a Protection Policy with Aviva we will charge you a premium. This is the amount we charge for the benefits provided under your policy, as set out in your policy schedule. No additional amounts are chargeable to you, unless a new Government levy or tax is introduced at a later date.
• The premium which we charge includes any Government levies which currently apply. Aviva are obliged to collect these on behalf of (and pay to) the Revenue Commissioners.
• There are no additional payments required from you other than your premium. Your Policy schedule will indicate if your premium is subject to periodic review or indexation, in which case it may increase during the lifetime of your policy.
• The premium which you pay us is used to cover all of the associated fees and charges including, but not limited to:
  • Policy Fee – a regular charge that may apply on a monthly/annual basis.
  • Benefit/Mortality Charge – the amount charged by AvivaAviva to provide the benefit(s) you are covered for.
  • Reinsurance premiums (if applicable) – The premium paid by AvivaAviva to the reinsurer in consideration for their portion of the liability that may arise from a claim.
  • Commission payable to the intermediary / financial broker for the policy.

• These are also sometimes referred to non unit-linked policies. Similar to (non unit-linked) protection policies, we charge a premium for the benefits provided under your policy, as set out in your policy schedule. No additional amounts are chargeable to you, unless a new Government levy or tax is introduced at a later date.
• The premium which you pay us is used to cover all of the associated fees and charges including, but not limited to:
  • Policy Fee – a regular charge that may apply on a monthly/annual basis.
  • Costs associated with investing your premium in the With Profit fund
  • Benefit/Mortality Charge – the amount charged every year by Aviva to provide any protection benefits you are covered for.
  • Commission payable to the intermediary / financial broker for the policy

• Investment Charge/Credit: This is an investment factor (or allocation rate) applied to the premium you pay. It determines how much of your premium is used to purchase units in the investment fund(s) you have chosen. For example, an investment factor of 95% will give rise to an investment charge of 5%; an investment factor of 105% will give rise to an investment credit of 5%. The investment factor may be different for each premium. If you receive an Annual Policy Statement, the investment charge/credit is displayed as a monetary amount in the charges/credits section.
• Nil Allocation Period: Some, mostly older unit-linked protection and savings policies, have a “Nil Allocation Period”. During this period, premiums are not invested into the investment fund, but are used to pay for charges on the policy and commission paid to the Financial Broker.
• Bid/Offer Charge: This charge typically does not apply for most unit-linked policies purchased since 2001. The offer price is the price at which units are purchased.  The bid price is the price at which we cancel units for transactions and charges and is  usually 5% lower than the offer price. This charge is reflected in the unit prices and will apply when units are purchased.
• Capital Units: These are units purchased on certain, older policies within the first two years the policy is in force and in the first two years after a premium increase.  Capital units have an additional charge that is incorporated into the fund price, typically to pay for the initial cost of setting up the policy. After the first year, accumulation units are purchased.
• Initial units: These are units purchased on certain older policies within the first year that the policy is in force and in the first year after a premium increase.  Initial units have an additional charge, typically to pay for the initial cost of setting up the policy, and are cancelled at a rate of 6% per annum over the lifetime of the policy to meet this charge.  After the first year, accumulation units are purchased.
• Accumulation units: These are units purchased either from the start of the policy or – where applicable – after the period where Capital/Initial units have been purchased.  Unlike Capital or Initial units, no additional fund charge applies to these units, but other policy charges are deducted from them.

• Policy Fee: For single premium policies a once off monetary charge may be applied at the policy start date.  For regular premium policies a regular monetary charge may be applied. These charges are met by cancelling units. Policy fees typically increase in line with inflation.
• Switch Fee: This fee may be charged when a fund switch instruction is executed.  Units will be cancelled to cover this fee. 
• Regular Withdrawal Fee: This administration fee may be charged on each regular withdrawal payment made from your policy. Units will be cancelled to cover this fee.
• Partial Encashment Fee: This administration fee may be charged when any (unscheduled) partial encashment is made from your policy.  Units will be cancelled to cover this fee.
• Cost of Benefits: These are the charges applied to cover the cost of providing any protection benefits e.g. Life Cover, Critical Illness, on your policy. They are met by cancelling units.

• Plan Management Charge: We may cancel units from your policy to cover plan management charges) which are expressed as a percentage of the policy value. This charge may also include any Fund Based Commission paid to your financial adviser.
• Fund Based Commission: This is usually included in the Plan Management Charge.  It represents an ongoing payment of commission to your Financial Broker/Adviser based on the fund value of your policy.  Units are cancelled each month to cover this charge.
• Fund Management Charge: This charge is reflected in the unit price of the Investment Fund(s) your policy is invested in.   It includes the costs incurred by the investment fund manager in looking after the fund.  This charge is deducted before the unit price is declared so does not result in any units being cancelled.
• Bonus Units: This is a credit that is applied to certain policies.  There are two types – regular and loyalty.  Regular bonus units are the most common and effectively represent a reduction in the Fund Management Charge applying to the funds your policy is invested in.   Loyalty bonus units  may be added on some products at a particular point in time – for example the 10th anniversary. In both cases additional units are added to your policy where applicable.
• Annual Charge: This is a combination of 3 charges/credits – Plan Charge, Fund Management Charge and Bonus Units.  It gives you an indication of the overall charge/credit that applies to your policy as a percentage of your policy value.  It does not, however, include any charges/credits that are applied as a fixed monetary amount (such as a Policy Fee).

• Early Exit Charge: If you cash in all or part of your policy within a specified number of years of the policy start date, we may apply an Early Exit Charge (sometimes referred to as an Early Surrender Penalty). This charge is calculated as a percentage of the value of the units encashed at the time of encashment.
• Market Value Adjustment: The Aviva With Profit fund has a feature where a change can be applied to the bid price to protect customers invested in the fund from the impacts of poor fund performance.  This “Market Value Adjustment” effectively reduces the policy value at the time of a surrender/withdrawal/switch from the fund, to match the value of the underlying assets in the fund.  It will not apply on death or if the policy is maintained and the benefits are taken on the date specified in the policy schedule.  If a policy remains invested in the With Profit fund beyond the date specified in the policy schedule, a market value adjustment may apply again.
• Initial Unit Deduction: Initial units are purchased on certain policies within the first year that the policy is in force and in the first year after a premium increase. Initial units have an additional charge, typically to pay for the initial cost of setting up the policy.  Initial units are cancelled at a rate of 6% per annum over the lifetime of the policy. This charge is equivalent to – and sometimes shown as – a higher fund management charge. As this additional charge applies throughout the lifetime of the policy, this is taken into account on surrender/early exit from the policy.  The charges that would have applied over the remaining period to the end of the policy are applied instead at the point of surrender/early exit.

These levies and taxes are deducted at source from the policy and are paid to the Revenue Commissioners or Pensions Authority on your behalf. With the exception of any exit tax refund, these levies and taxes are deducted by unit cancellation.

• Premium Levy: From the 1st January 2010 all premiums paid on protection, savings and investment business are subject to a 1.00% Government Premium Levy.  This is automatically included in the premium that you pay and paid to Revenue by Aviva.
• Deemed Exit Tax: All savings and investment policies (and potentially unit linked protection policies) effected after 1st January 2001 are subject to a “deemed encashment” for exit tax purposes. This is effectively a tax on growth the policy has achieved and applies on the eighth anniversary of the policy and every eight years thereafter, as detailed in the Finance Act 2007.  The calculation of the tax is equal to the tax you would pay if you surrendered the policy on its eighth anniversary.  Future encashments will take account of tax previously paid, so that you are not taxed twice on the same gain.   Exit tax does not apply to Pension products.
• Exit Tax: The withdrawal of some or all of your investment, the transfer of policy ownership or a death claim may be subject to an exit tax on the relevant growth your policy has achieved.   Exit tax does not apply to Pension products.
• Deemed Disposal Exit Tax Refund: Where a deemed exit tax was previously deducted – and the gross value has since reduced – there will be a refund of any overpayment of tax on any future encashment, death claim or transfer of ownership.  This will be applied to your policy at the time of the transaction.  If the gross value increases again this refund may not apply.
• Pensions Levy: During the period from 2011 to 2015 inclusive, the Government introduced a Pensions Levy.  Aviva were required to deduct a percentage of the value at 30th June of these years for any pension policies.  The percentage ranged from 0.15% to 0.75%.
• Pensions Authority Fee: This charge only applies to company sponsored pension schemes (Executive or Group Pension Schemes).  The Pensions Authority, charges an annual fee per active member) that Aviva are obliged to deduct and pay to them.  This is done by cancelling units from one policy for each active member, unless the Trustees arrange payment of this fee themselves.

• Tax on withdrawals: Amounts shown for encashments and regular withdrawals from Vested PRSA or Approved (Minimum) Retirement Fund policies do not include PAYE and other Revenue deductions. These are however deducted by Aviva and forwarded to the Revenue on your behalf.
• Pre 2000 ARFs: Approved (Minimum) Retirement Fund policies taken out prior to 6 April 2000 have different tax rules applying to them.  Essentially tax is only applicable on withdrawals of capital (not growth).  Aviva will detail for you if tax is payable, but for these policies you are responsible for payment of any tax to Revenue.

• Investment Movements: This is the investment gain (or loss) that your policy has made over the period of your Annual Policy Statement.  It is based on the units your policy has held over the period and the increase (or decrease) in the price of the investment fund(s) your policy is invested in.  It is displayed as a monetary amount.
• Policy Reviews occur regularly on certain products to ensure that the policy is performing as expected.  If it is not then we may advise you to increase your premium in order to sustain the benefits of the policy.
• With Profits Bonus Rates: this is a regular bonus paid on with profit funds.  It is determined by Aviva based on a review of current and – based on assumptions – future fund performance.
• Commission Payments may be made out of the charges shown in this document.  For further details you should contact your Financial Advisor directly.
• Policy Values are for illustrative purposes only and cannot be guaranteed.  Prices can fall as well as rise.  Past performance is not a reliable guide to future performance as this will be based on future market conditions.  Restrictions may apply if you wish to cash in your investment early.  For annual policy statements, there may be outstanding transactions that are not accounted for the current statement.  They will appear in next year’s statement.
• Roll-over date: This applies to Approved (Minimum) Retirement Fund policies (ARF or AMRF) and certain investment bonds.  The roll-over date is the next date on which any market value adjustment applying will be cancelled. If you remain invested in this With Profit fund after this date, a market value adjustment may apply in the future depending on market conditions. Any future market value adjustment will be based on the rates applicable from this date.  If your policy reached a roll-over date this year it may have qualified for a terminal bonus which increases the number of With Profit units you hold.