4.4 The Encashment Value of the Policy
In the policy Provisions, Privileges and Conditions (see Document 6C of Appendix 1/6) Paragraph 18(a) is titled ‘Encashment’. It would therefore be logical, when endeavouring to ascertain the Encashment Value of the Endowment Policy (this being the matter of primary interest to any policyholder), to read through this paragraph.
It is immediately apparent when reading through the Paragraph titled ‘Encashment’ that, apart from being clearly informed that the policy must be in force for a minimum of two complete years before encashment, one must go deep into a tortuous labyrinth of interdependent definitions in order to ascertain the Encashment Value.
Let us now enter the LABYRINTH through the passage titled Encashment (refer to Document 6C of Appendix 1/6).
Paragraph 18(a) Encashment
The Policy may be encashed at any time after it has been in force for two complete years.
| (1) |
The encashment value payable shall be an amount equal to the then Accumulated Fund ––– this subject to the Provisions, Privileges and Conditions. |
Question: What is the Accumulated Fund ?
| (2) |
Paragraph 2(m) states that the ‘Accumulated Fund’ at any date is the value at Bid Price of the Unit Account at that date ––– except if encashment is before the Mortgage Repayment Date the Company’s Actuary may, at his discretion, apply a factor to that Bid Price. |
From (1) and (2) above it can be deduced that the Encashment Value payable shall be an amount equal to the value at Bid Price of the Unit Account at that date.
Question: What is the value at Bid Price ?
Question: What is the Unit Account ?
| (3) |
Paragraph 2(l) states that the ‘Unit Account’ at any date means the Sum total of Units in all Funds attaching to the Policy. |
We know that there is only one Fund attaching to this Policy, i.e. the HOMEWAY MORTGAGE FUND (Series 4).
Question: What is a Unit ?
| (4) |
Paragraph 2(d) states that a ‘Unit’ is a Premium Unit of any Fund. |
Question: What is a Premium Unit ?
| (5) |
Paragraph 2(c) states: The terms ‘Premium Unit’, ‘Offer Price’ and ‘Bid Price’ shall be interpreted by reference to the resolutions referred to in sub-paragraph (b). |
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So, what is the Encashment Value ?
From (1), (2), (3), (4) and (5) above we can conclude that :
The Encashment Value payable shall be an amount equal to the value at Bid Price of the sum total of Premium Units in the HOMEWAY MORTGAGE FUND (Series 4) ––––– the terms Bid Price and Premium Unit being interpreted by reference to the resolutions referred to in sub-paragraph (b) of Paragraph (2) – DEFINITIONS.
The only line in the said sub-paragraph (b) that refers to the ‘resolutions’ is: ‘Copies of the resolutions creating these Funds and the rules governing their operation are available from the Company’s Chief Office.’
So, the understanding of the Encashment Value of the Policy can only be ascertained by reference to yet another Document ––– a document NOT provided with the Policy Documentation.
Effectively, from the point of view of the Policyholder, entering the Policy Documentation LABRYINTH via the passage titled ‘Encashment’, in order to ascertain the Encashment Value of the Policy, leads to a DEAD END ––– in that the Policy Documentation, as provided, fails to delimit the parameters giving definition to the Encashment Value.
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Note! It is necessary to read the entirety of the ‘Provisions, Privileges and Conditions’ (Document 6C of Appendix 1/6) to see just how covertly the existence of the ‘resolutions’ is concealed within the Policy Documentation ––– not just the tortuous manner in which the meaning of the KEY Parameters (given specific and highlighted Definitions within the Policy Conditions) ultimately lead to these ‘resolutions’ ––– but the covert manner in which these 'rules and resolutions' are themselves CAMAOUFLAGED within the Policy Conditions text.
These ‘rules and resolutions’ have not been allocated any STATUS whatsoever within the Policy Documentation:
| (a) |
The rules and resolutions are given no specified or separate DEFINITION. |
| (b) |
Capital Letters have not been used when referring to the rules and resolutions. |
| (c) |
'Inverted Commas' have not been used when referring to the rules and resolutions. |
| (d) |
Bold Print has not been used when referring to the rules and resolutions. |
| (e) |
The rules and resolutions are only mentioned OBLIQUELY, in passing, at the end of paragraph 2(b). |
Note! I have included in the Appendices a copy of the Resolutions and Rules referred to in sub-paragraph (b) of Paragraph (2) of the Provisions, Privileges and Conditions. These ‘Resolutions and Rules’, I elicited from Irish Life on the 18/11/93; you will note that they have now acquired the status of capital letters. (See Appendix 4/1.)
Two facts become crystal clear from a study of the Policy Conditions in conjunction with the Resolutions and Rules.
First: A great many matters, relating to the value of the Policy to the Policyholder, are at the discretion of the Life Assurance Company or the Life Assurance Company’s Actuary. Who polices them ?
Second: The TRUST that a Policyholder must repose in the Life Assurance Company (by virtue of the totally opaque nature of the Contract Conditions and the fact that the actions of the Life Assurance Company are extremely secretive and virtually unquestioned) is ABSOLUTE.
In the normal course of events, a Life Assurance Company and its Management Personnel must be seen as being of the highest repute, and as conducting business with their clients with the utmost good faith and to the highest standards of professional integrity. Such being the case, these facts should not bode concern for the Policyholder.
BUT, as we shall prove again and again throughout this website-book,
––––––—–––––– SUCH IS NOT THE CASE !
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From the above, it can be seen that the Encashment Value (though not properly delimited by the information given in the Policy Documentation) has been defined as the value at Bid Price of the sum total of Premium Units in the HOMEWAY MORTGAGE FUND (Series 4).
But we already know from THE SCHEDULE (see Section 4.3) that there is 100% ALLOCATION of Premiums paid to Irish Life Assurance INVESTED in the HOMEWAY MORTGAGE FUND (Series 4).
It is therefore logical to conclude that the Encashment Value is the value at Bid Price as achieved by the investment of this 100% Allocation of Premiums paid into the HOMEWAY MORTGAGE FUND (Series 4).
Therefore, it could be concluded, from the logically deduced Policy Documentation definition of Encashment Value, that all Premiums paid to Irish Life are INVESTED in the HOMEWAY MORTGAGE FUND (Series 4).
BUT we know, from the letter received from Irish Life almost two years POST CONTRACT, that during the first year of the policy there is NO INVESTMENT, and that from the second year onwards there is only 96% investment.