If you’ve been squirreling away money conscientiously for years through various investments, then you deserve a pat on the back. You’re obviously financially savvy and want your money to work for you in the long term. One of the unexpected benefits you could get for your ongoing savings discipline is an early surplus of cash if your circumstances change.

For example, maybe you’ve been saving for your daughter’s education, but when the time for college enrolment comes around; your bright spark receives a scholarship. Or, perhaps your son has to head off to school and you inherit money that will cover his fees. These unexpected windfalls mean that when your investment policy matures, you’ll have surplus cash.

You could also have fixed your retirement age at 60 but when the time comes, your employer or company thinks you’re so indispensable that they ask to retain you on a contract. As such, you’d still be earning money that you hadn’t planned on making, which means you’ll have extra retirement funds available.

With all these scenarios, you’d need to decide what to do with your excess funds. By far the most sensible thing to do financially would be to reinvest them. But with so much choice out there, it can be hard to know which investment vehicle to choose. Here are a few reinvestment options to consider, depending on your financial needs and goals:

Anticipated Endowment

The main advantage of this plan is that it combines life cover together with an investment portion. The sum assured (which is the guaranteed payout amount) pays you out in instalments during the term of the policy, and the size and timing of these instalments will depend on the original term.

This plan also earns you bonuses, which are added to the sum assured every year according to the valuation of your Life Fund. These bonuses are paid together with the last instalment of the sum assured when your policy matures, or together with the full sum assured if you pass away. There are also partial payouts where you’re paid 20% of the sum assured, twice within the term of your policy.

Endowment with Profits

This plan also combines life cover with an investment portion, but there are no partial payouts. The sum assured plus the accumulated bonuses are paid out when your policy matures or if you pass away – whichever happens first. You can choose your term of the policy and your sum assured.

This plan is also bonus earning, and the bonuses are added to the sum assured every year after the actuarial valuation of your Life Fund. These are then paid together with the sum assured on maturity or when you pass away.

Usomi Bora

This children’s education policy is an open-ended facility. The amount of cover you choose depends on the education goals you have for your children, including the calibre of the institution you want to send them to, what time horizon you need to cover and what you can actually afford.

This plan combines life cover with an investment, and the term of the policy will be determined by when you want your child to start benefiting. For example, if your child will go to high school or university in 10 years’ time, you can choose the date of your policy’s maturity to coincide with that time, and for the sum assured to pay you out in four equal annual instalments – either termly or in a lump sum.

If you pass away, any subsequent premiums will be waived and the policy continues earning bonuses until it matures.

Top up your Personal Retirement Scheme or Pension Plan

If you’ve been making personal contributions for a while to build up a fund of money for when you’re older, you could also consider topping it up with the surplus cash. The great thing about these schemes is that subject to certain limits, your contributions, investment growth and benefits will all be tax-free.

Those are just some of the options to reinvent your benefits. You could also put it into our Unit Trusts, Cash Management or Private Wealth Management (PWM), depending on how much money it is. It really is up to you and what you’re trying to address at this stage in your life, plus what you’re planning for in the future.

With ICEA LION as your financial partner, we’ll help you make the best decision in terms of your benefit reinvestment options. Need advice? Contact your broker or agent or contact us directly today.