It's time to look at the impact on the bottom line. Extending the time period to 20 years, we compare the three insurance cases against the 6% p.a. raw return baseline control. The figure below illustrates the effects on return. The appendix contains the calculations in full.

Figure 9: Control - 6% raw return vs. 3 cases of insurance policy

In the worst case, the policy holder can lose up to 96% of total return through fees and charges, best case the loss is around 40% of total return. The median case, i.e., what we believe the industry "standard" to be, the policyholder loses around two thirds of total return to fees and charges1.


1. We are not correcting for inflation. In the worst case, inflation creates a negative real return over 20 years – the worst possible result.

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