This paper is devoted to a particular type of unit-linked policy which was first introduced in 1977, and which has since been much copied and amended; there are now over 20 such policies on the market, with more being introduced at regular intervals.

The essential features of this type of policy are:

(a) The cost of mortality is met by the regular cancellation of units attached to the policy to the value of the current cost of the risk.

(b) The policy conditions allow the office to review the premium and/or sum assured in the light of experience, in particular investment experience.

The paper first describes the development of the policy in its various forms, and surveys the current state of the market.

The decisions to be taken by the life office in designing such a policy are then reviewed.

The pricing of the contract is then discussed, including the cost of various options which can be offered.