The RL360 Quantum is a savings plan that used to be available but is now closed to new investors. It was developed specifically for those living abroad who don’t have a large amount of money to put away but yet wish to save on a regular basis. To join, you had to be 18 years old and up and save at least 200 pounds each month for five years.
If you want to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).
This includes if you have a policy and aren’t happy.
What is the RL360 Quantum?
Quantum gives you access to a reasonable number of funds, and there are no fees associated with transferring your savings anytime you want within the scope of the plan’s funds, sectors, or investing themes.
Many choices are available to policyholders of the RL360 Quantum policy. You are free to change your premium allocation or move between funds at any time. Withdrawals may be made either on a regular schedule or as a lump sum, depending on the policy’s specifics. You may cancel your insurance whenever you choose, but doing so will cost you a surrender fee. It’s also possible that your reimbursement will be less than your premiums.
After 10 years of policy ownership or more, you’ll be eligible for a loyalty incentive. If you paid regular premiums alone, your bonus will be equal to 0.25 percent of the total value of your fund. Multiply this ratio by the total number of years you have made premium payments on the policy.
However, the loyalty bonus will not be awarded for any time during which the policy was in a premium holiday or paid in full. The fund value owing to any single premiums paid in addition to the monthly premium payment is not eligible for a loyalty bonus payout under the terms of the policy.
Policy value might increase halfway through or in the long term based on the success of the underlying investment funds.
Nevertheless, Isle of Man-based RL360 said that it has stopped accepting new customers for the product as of July 2019. So, if you’re interested in the plan, you can’t apply anymore.
Don’t be disheartened, though. It might actually be for your own good that you cannot anymore set up an account. The fact is that foreign investors now have access to a wider range of solutions that are less cumbersome, more adaptable, and simpler to comprehend. You’ll find out why as we dig through the details.
Meanwhile, the announcement of the closure of Quantum to new business has no effect on existing policyholders. They can continue to maintain their policy according to the terms and conditions of their plan. They are also allowed to change the funds they have invested in, and to add more savings from either a monthly contribution of 80 USD or a one-time lump sum of 8,000 USD.
Policyholders who have online access to their account can still monitor the performance of their plan and download valuations. They can also make changes to their investment portfolio online, just as they did before the firm announced that it will no longer accept new clients for this particular product.
RL360 Quantum Plan Options
Life Assurance Option
The RL360 Quantum policy offers a life assurance option which can be purchased based on a single life or a joint life. If it’s a joint life policy, the money goes to the surviving person. In many cases, the person or people being insured are also the ones applying for the policy. However, they can be different people if needed. When the policy is first bought, the youngest person who can be insured must be younger than 65 years old.
The policy will remain active until either everyone covered by it has passed away or the policy is cancelled.
Capital Redemption Option
The capital redemption option in the RL360 Quantum policy is not linked to the lives of the people who have it. The policy can be kept active for a total of 99 years, which includes the time during which the premiums are paid. When the 99 years are up, the policy will be ended and the fund value, plus at least $160 (or the equivalent amount in another currency), will be paid out.
If the policy is returned early, the person who has it will receive the fund value, but any early surrender charges that apply will be subtracted from the payout.
Quantum Savings Plan Contributions, Incentives, and Investments
Is there a minimum contribution to the plan?
You’re free to put away as much as you’d like as an expat, but you’ll need to add at least 320 US dollars a month into the plan. The currencies accepted for paying into the plan are USD, Hong Kong dollars, Australian dollars, British pounds, euros, Japanese yen, and Swiss francs.
If you want to save more, you can change your contribution later. The plan lasts for 5 to 25 years, and the minimum contribution depends on how long you want to save.
If you want to save for 5 to 9 years, the minimum is 400 pounds per month, while the minimum monthly savings is 200 pounds for 10 years or more (or currency equivalent).
What’s the process for paying a premium?
Adding funds to your RL360 Quantum Savings Plan is a straightforward process that can be done through direct debit or bank transfer. There are no extra charges associated with these methods of payment.
The premiums must be paid within 30 days. If you or your financial advisor are using online fund switching, you’ll get access to numerous investment funds in the United Kingdom and around the world. However, if you don’t have such, you’ll be limited to investing your premium payments in no more than 10 different funds.
After making your first premium payments for a certain amount of time, you may request a premium holiday of up to two years provided you fulfill specific requirements. Your investment portfolio value must be more than the minimum necessary, and RL360 must have received all premiums they were anticipating. You’ll still have to pay taxes and fees outside of the premium holiday, and there’s a new policy cost that kicks in for the whole thing.
Are there any perks?
The longer a consumer keeps their savings plan active and makes regular monthly payments, the larger their incentive will be. This indicates that the bonus amounts that individual customers get may vary, but that all customers will, in fact, receive a bonus.
Consumers have the option of investing in any number of the plan’s over 170 different funds, as long as they continue to pay the modest monthly cost for each fund, which is normally 25 pounds per month. The plan also allows consumers to invest in as many funds as they choose overall.
What are the investment options?
Over 350 direct funds, including more than 180 core funds and currency variants, are available through RL360. These vary from low-risk money market funds to high-risk specialized equity funds. In addition, mirror funds are not part of the offering, so the performance you see for a fund is exactly what you can expect to see in your Quantum policy, without any confusing tricks.
On Charges and Taxes
What are the fees?
The “Initial unit charge” is a fee that you have to pay if you cancel any of the initial units that you purchased. This cost, which is equal to 0.50% of the value of the units that were canceled, will be charged from your account on a monthly basis. You’ll be assessed this fee for as long as you keep the policy, up to 30 years.
The “Contract charge” is a fee that is deducted every month from the total value of your investment fund. This fee is a portion of the value of the fund every year, and the rate is assessed at 1.5% per year. To subtract this charge from the total, a certain number of initial and accumulation units will be canceled.
A “Policy fee” is another fee that you have to pay each month. This fee is fixed and varies depending on the currency of your account. The fee is deducted from the policy by cancelling accumulation units.
Also, each of the external funds will be charged a management fee on a yearly basis by the fund managers. This will be included into the pricing of the particular funds at a rate that will be determined by the management of each of the particular funds.
Take note of the additional charges your policy will incur, including an annual management fee, which is a cost levied for managing the funds in your policy. This yearly charge is usually between 0.5% and 2% of the value of your Quantum Savings Plan. All these fees and charges associated with your plan will impact the return you receive from your investment.
On the other hand, there are no custodian fees to worry about with the Quantum Savings Plan. Other offshore products that are more sophisticated may require additional fees to be paid for custodian services.
What are the tax implications?
As an insurance provider, RL360 is subject to the tax regulations of the Isle of Man. Your policy’s earnings, no matter how large, will be free of taxation on the territory. However, RL360 may take out a withholding tax from any income that comes from investments held in specific countries. Unfortunately, this tax cannot be refunded by the countries that hold the investments.
Withdrawals, Cancellations, and Your Passing
How can I make a withdrawal?
For regular withdrawals, you may cash out your policy’s funds after the investing period has ended and the value of your holdings has increased by the required percentage. Your monthly payments may not be available until beyond the stipulated period since they are being used to buy other assets.
You may take a certain dollar amount or percentage of your investment balance out periodically if you choose. You may withdraw up to 10% of your investment value in a policy year, however there are minimum amounts you must remove at each withdrawal.
Investment management fees may also be incurred when making periodic withdrawals. Monthly, quarterly, semiannual, and annual withdrawals will be processed in your policy’s currency.
The value of your accumulation units in your plan will determine how much of your policy you may withdraw in a single lump sum. As a result, you aren’t allowed to cash out more money than you have already accrued in your account. Also, the amount you can withdraw can’t be more than the plan’s surrender value, or the policy’s value will fall below the required bare minimum of 8,000 USD.
Can I opt out early?
Yes, but the RL360 Quantum Savings Plan has certain surrender charges that must be taken into account. If the policy is surrendered within the initial allocation period, it will have no surrender value and will be subject to a 100% surrender charge.
However, once this period is completed, the initial units purchased will be subject to a surrender charge if the policy is surrendered in part or in full. So, it is important to note that the RL360 Quantum Savings Plan is intended to be a medium to long-term savings plan, and cancelling the plan in the early years may result in a significant loss of savings.
To accommodate the changing financial circumstances of its customers, RL360 provides flexibility to make extra lump sum payments and take cash out when necessary, on top of the contribution holiday as discussed above.
Each RL360 Quantum Savings Plan comes with an initial allocation period during which no money can be withdrawn. The length of this period depends on the terms agreed with the independent financial adviser. After the initial allocation period is over, savers can make regular or one-time withdrawals.
The Quantum Savings Plan from RL360 is first and foremost designed for capital growth over the medium to long term. Therefore, taking regular withdrawals that exceed the investment growth may affect the value of the savings.
What happens to my policy when I die?
When the last surviving person named in the life assurance policy passes away, the policy will end. In order for RL360 to make a payout, they need to be informed in writing with appropriate documentation proving legal entitlement. The amount that will be paid out will be equal to 101% of the fund’s value.
If the policy is issued jointly, ownership of the policy will be transferred to the surviving policyholder after the other one passes away.
If the policy is surrendered before the end of the premium term, the amount paid out will be the fund value minus any charges for early surrender.
For capital redemption policies, the policy will not automatically end when the policyholder passes away. The personal representatives of the policyholder’s estate will determine ownership. If the policy is ceded before the end of the premium term, the amount paid out will be 100% of the fund value minus any charges for early surrender.
What are the positives and negatives of the RL360 Quantum Savings Plan?
Well, the good part is that the product can offer certain tax advantages for certain territories. The tax laws of the nation in which you live, the one in which you have to pay taxes, will determine whether or not the RL360 Quantum Savings Plan is successful.
This indicates that the plan will be more beneficial to certain individuals than it will be to others, depending on the specifics of their tax situations. It is also essential to keep in mind that the purpose of this plan is not to replace existing expat pensions but rather to supplement them.
But that’s not really enough for investors. The drawbacks far outweigh the benefits that you might have picked up here and there.
For one, tax breaks may not be recognized in some countries, which can limit the benefits of the policy. Additionally, complete access to funds during the early years of the policy is subject to penalties, which can make full withdrawal inflexible.
Another issue is that the commission charged can cancel out any preliminary investments made, making it a costly option. Finally, the policy does not offer complete access to funds with the lowest possible costs or passive trackers, which may be preferable for some investors.
Out of all the downsides mentioned, I’d like to emphasize that it is indeed and an expensive option. In fact, many reviews from clients complain about just that. With that alone as a metric, it’s not really worth it. There are alternative investments if you just know where to shop. Let’s talk.
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Adam es un autor reconocido internacionalmente en temas financieros, con más de 830 millones de respuestas en Quora, un libro muy vendido en Amazon y colaborador de Forbes.
