with profit policy - form of life assurance policy which, on maturity, entitles the beneficiary
to participate in the profits of the life assurance or pension fund
Under a conventional policy the insurance company declares bonuses
during the life of the contract (known as reversionary bonuses)
which once allocated to the policy cannot be taken away. In addition
a final (terminal) bonus may be paid at the end of the policy term.
Under a unitised policy the investment purchases units within a
unitised with-profits fund. Some companies reserve the right to
adjust the value of such units in extreme circumstances, this is
known as a market value reduction.