If the plans was / is being paid for over 1 or 2 years – because no interest is charged on plans paid for over 1 or 2 years, the balance is calculated by deducting the sum paid towards the plan at the point the time the Plan Holder dies, from the price of the plan as was at the time it was purchased. The balance is the difference between these two figures.
If the plan was / is being paid for over 3, 5, or 10 years – then at the time of the Plan Holder’s death, we first calculate the interest payable (4% flat) over the period of time between the plan being purchased and the plan holder’s death. We then add this to the net price of the plan (minus any deposit paid) as it was at the time of purchase (this gives us the revised ‘total payable’ figure). We then deduct this figure from the total payments made towards the plan at the time of the plan holder’s death. The balance is the difference between these two figures.