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Glossary Category

A type of investment plan in which extra amounts may be added to the main benefit (known as the sum assured) to reflect profits earned during the course of the contract. Regular or "reversionary" bonuses may be added, usually each year, and once declared are guaranteed. A final or "terminal" bonus may be added when the policy becomes payable. With-profit funds are typically invested in a mixture of equities, property and fixed income investments. Under poor stock market conditions a "market value adjustment" (MVA) may be applied to the value of the policy if it is surrendered before the maturity date.