Dear Ed,
Your article once again reinforces why you should not invest in smoothed bonus funds:
1. The BSR only comes into consideration when there is a low or zero reserve when termination penalties are applied. One understands this practice.
2. The BSR never comes into play if there have been exceptional investment years and the reserves are very strong. The reserves that are released by early terminations, there are still penalties which are applied irrespective of the BSR strength, will not profit remaining policyholders.
3. A large percentage of released reserves will go to the shareholders, the investor's profit that would accrue to him under a non life insurance investment.
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