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The MVRs, which are expected to affect more than a million investors, can reduce the face value of a bond by 20 per cent or more at the discretion of the product providers.

MVRs are used to ensure early policy withdrawals made before the full term reflect the fall in the overall size of the life fund due to market conditions. However, these charges were still being applied even when the FTSE 100 was hitting its most recent peak of 6,500.

According to Metlife, its investment bond offers full transparency and is not subject to MVRs.

Peter Carter, head of product marketing at MetLife, said: "The problem with with-profit bonds is that there is some confusion over what, if anything, is guaranteed.

"Investment bonds with unit-linked guarantees are perfect substitutes for with-profits bonds in that underlying capital is secured while offering exposure to the upside of equities in the medium to longer term with full transparency."

"Guarantees provide an excellent balance between giving exposure to equities, which usually provide the best returns in the long term, and offering the safety net that investors look for in other asset classes.

"By consulting with their financial advisers, investors can balance their appetite for risk with the potential for high long-term growth."