Section 561 | Meaning of “investment life insurance contract”

(1)In this Chapter “investment life insurance contract” means—

(a)a policy of life insurance which has, or is capable of acquiring, a surrender value,

(b)a contract for a purchased life annuity, or

(c)a capital redemption policy,

other than a relevant excluded contract.

(2)In subsection (1)—^F1

“capital redemption policy” means a contract made in the course of capital redemption business (as defined in section 56(3) of FA 2012),

“purchased life annuity” means an annuity—

(a)granted for consideration in money or money's worth in the ordinary course of a business of granting annuities on human life, and

(b)payable for a term ending at a time ascertainable only by reference to the end of a human life (whether or not the annuity may in some circumstances end before or after the life), and

“relevant excluded contract” means—

(a)an investment life insurance contract under a registered pension scheme,

(b)an investment life insurance contract purchased with sums or assets held for the purposes of a registered pension scheme, or

(c)a policy of life insurance issued in respect of an insurance made before 14 March 1989.

(3)A policy of life insurance issued in respect of an insurance made before 14 March 1989 is treated for the purposes of this Chapter as issued in respect of one made on or after that date if it is varied on or after that date so as—

(a)to increase the benefits secured, or

(b)to extend the term of the insurance.

(4)For the purposes of subsection (3) any exercise of rights conferred by a policy is to be regarded as a variation of it.