This document explains the key features of the Tax Free Savings Plan, please read it carefully.
A printable version is available by clicking on the following link Tax Free Savings Plan Key Features

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Its aims

• To provide a 'tax-free' lump sum for you at the end of the specified term of the plan.
• To provide a minimum guaranteed 'tax-free' lump sum benefit for your dependants if you die before the policy matures.

Your commitment

• You agree to pay a fixed monthly premium payable in advance by standing order or direct debit, over a specified number of years or on death.

Risk factors

• The value of your policy on maturity or claim will depend on investment performance.
• Your circumstances may change, forcing you to stop paying premiums.
• Our deductions may turn out to be higher than expected.
• If you encash it during the early years, the surrender/free policy value may be less than the amount you have paid in.
• If you discontinue premiums within the contract period, the amount of life cover could cease or will be reduced.

Questions and answers

What is an Endowment 'With-Profits'?

• It's a fixed term savings plan, which aims to make possible use of a tax advantage available to members of friendly society's
• It gives you life insurance cover.
• It pays out at least a guaranteed minimum amount when it matures, provided all the payments due over the term have been made.

What is a Tax Exempt Endowment 'With-Profits' Plan?

• A Tax Exempt Endowment 'With-Profits' plan, is primarily a savings plan designed specifically to provide a 'tax-free' lump sum at the end of a specified term of years.
• The policy also provides a guaranteed minimum amount of life cover, in the event of your death during the selected term. (The sum payable on death will be equal to the tax free lump sum and any bonuses already added).
• This is a traditional 'With-Profits' policy, which means that regular bonuses are added increasing the overall value up to maturity or earlier death.
• Bonuses under a 'With-Profits' policy, once added, cannot be taken away.
• The policy can be taken out for a fixed term, which may be 10 to 30 years or any term in between from age 17 next to 75 next and must mature no later than 85 next.

Premiums

• The minimum premium payment is £10 a month or £120 per year. If you decide to pay monthly we will collect your payments in advance by standing order or direct debit from your bank. We can collect quarterly, half yearly, yearly or you can pay them by cheque.
• Under current legislation, each person (including children) can save up to £25 a month or £270 a year in a friendly society savings plan free from income tax and capital gains tax liability, see 'Tax'. These are called Tax Exempt Savings Plans. The payment limits apply to all such plans held in the person's own name.

If I can't pay my premiums for a short while, what options have I?

• If you don't pay your premiums, the notice before forfeiture procedure would come into effect. See `What happens if I stop paying?' If you require further information on this subject, please contact us direct or speak to your financial adviser.

What might I get back?

• You will receive the value of your plan when it ends. This is made up from a guaranteed minimum amount, as shown in your personal illustration, plus the added regular bonuses during the term. There may also be a final extra bonus added, (known as a terminal bonus) but this is not guaranteed.

What life insurance cover is included?

• The Tax Exempt Endowment 'With-Profits' plan provides life cover on your life.
• It would pay out a lump sum if you should die before the plan ends. The lump sum would depend on the value of the bonuses that have been added at that time, but provided we can supply our standard terms to the life cover, it will be at least the guaranteed minimum amount shown on the illustration. We will tell you before the plan starts if special terms apply.
• Once the plan has paid out a lump sum on death, the plan would end and has no further value.

What happens if I stop paying?

• If you stop before you have made two years' payments, the plan will lapse. Depending on how many payments you have made and your payment amount, it may have a 'cash-in' value. However, this is likely to be less than you have paid in.
• If there is no 'cash-in' value when the plan lapses, you will get nothing back. Provided we have not paid out any 'cash-in' value, you can restart the plan at any time up to 12 months from the date lapsed, by making all the payments due from that date.
• You cannot restart a plan that has been lapsed for more than 12 months.

What if the plan is cashed-in early?

• You must make a minimum number of payments before the plan has a 'cash-in' value.
• You might get back less than you paid in.
• Please refer to your personal illustration for some examples of possible 'cash-in'.

How Flexible is it?

• The Tax Exempt Endowment 'With-Profits' plan is designed for a long term regular fixed commitment. Tax regulations mean you cannot normally stop payments for periods of time and restart them later.

How will it work for me?

• Within this literature you will find information showing how the Red Rose Tax Exempt Endowment 'With-Profits' plan will work.
• If you have any further queries after reading these Key Features, please contact us direct or speak to your financial adviser.

'Paid-up' values

• Missed premiums may mean that your policy will become paid up with reduced benefits.
• If you discontinue the payment of premiums, and providing two years premiums have been paid, the policy will be made 'paid-up'. In this instance, the guaranteed minimum sum assured will be reduced in proportion to the ratio of the premiums paid to the total number payable. Any bonuses already added will remain attached, and this value will remain frozen until claimed.
• If you fail to pay premiums despite the receipt of the normal Forfeiture Notice, your policy will become a Reduced Sum 'paid-up' Policy automatically.

Bonuses

• The Red Rose Friendly Society Limited is a mutual organisation owned by its Members (policyholders) and has no shareholders entitled to receive a share of the profits.
• Reversionary Bonuses, calculated on the basis of investment performance, are added to your policy annually, and once added cannot be taken away. The level of these bonuses are determined following the yearly valuation of the Society by its appointed Actuaries. In addition a Terminal Bonus may be added when your policy becomes a maturity or claim, further increasing your return.

Charges

• The charges, expenses and other deductions are taken directly from the Fund each year before we work out how much is available to add to customers' plans as bonuses.

Cancellation rights

• After your proposal is accepted you will receive a notice of your right to cancel. You will then have thirty days in which you can change your mind.

Tax

• In addition, provided that the policy is fully paid to date, the proceeds are free from United Kingdom liability to income tax and capital gains tax. However, if you surrender the policy or make it 'paid-up' within ten years or three quarters of the term if sooner, then some United Kingdom tax may be payable if the proceeds exceed the premiums paid. There are no guarantees that changes in tax treatment will not occur in the future.

Law

• The Tax Exempt Endowment 'With-Profits' plan is governed by the Law of England, and a court in England or Wales will decide on any dispute.

The Society

• The Red Rose Friendly Society Limited was founded in 1863 for the mutual benefit of its Members. Total funds are now in excess of £8 million. It is incorporated under the Friendly Societies Act 1992.

How to contact us

• If you have a financial adviser, he or she will normally be your first point of contact. We cannot give you financial advice, only information about our products. If you need advice, but do not have an adviser, we can give you details of where to go to find Independent financial advice.
• If you have any questions at any time you can phone, send a fax, email or you can write to us.

Call us on 0800 7310072 during the following times:
Monday to Friday 9.00 am to 5.00 pm

We may monitor calls to improve our service.
Fax number: 01254 222705
Email: ifa@redroseassurance.co.uk

Office address:
The Red Rose Friendly Society Limited
Parkgates
52a Preston New Road
Blackburn
Lancashire
BB2 6AH

Your protection

• If you need to complain, first write to us at the address above. If you are not satisfied with our response, you can complain to:

Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London
E14 9SR

Tel: 0845 080 1800

• We are members of the Financial Ombudsman Services and a copy of our complaints procedure is available on request.
• If you have a financial adviser, he or she will only recommend products that are suitable for you. You have a legal right to compensation if, at any time, another authority or we decide you have bought a plan that was not suitable for your needs when the advice was given.
• The Financial Services Compensation Scheme covers your plan. This means that, should the Society become insolvent, you'll be covered for 100% of the value of your plan up to a maximum of £50000. For information about the Financial Services Compensation Scheme (Tel: 020 7892 7300).

Terms and conditions

• This Key Features document gives a summary of The Red Rose Friendly Society's Tax Exempt Endowment 'With-Profits' Plan. They do not include all the definitions, exclusions, terms and conditions.