Investment Bond with life assurance

Could anyone explain this paragraph to me (shouldn’t have tried to get my head around it on a Friday afternoon) from R(IS)7/98. This is a decision that determined that an investment bond with life assurance attached had to be disregarded as capital (i.e. as the surrender value of a life assurance policy). Although questions of deprivation may arise depending on the facts, I thought that any regular income that derived from such an investment should not be taken into account as income - there was nothing in the regs that allowed this to be treated as income instead of capital. I’m not sure what this (final) paragraph means:

‘Although the capital investment value of the bond has to be left out of account as a surrender value for the reasons given above, I can see no reason why the subsisting contractual rights to defined monthly sums created by the partial exercise of surrender options under the “withdrawal plan” explained in para. 5 above have to be ignored as well. No part of these payments is readily identifiable as income under the general law, even though unit values no doubt reflect retained income as well as capital growth. In my judgment they represent payments of capital to the policyholder by periodic instalments so long as the withdrawal option arrangement remains in force. It follows that although the capital value of the expected future instalments has to be disregarded under the express provision in para. 16 of Sch. 10, the instalments themselves have to be brought into account under reg. 41 as income of the period for which they are paid, for so long as the total outstanding together with any other capital as valued under the regulations is over £8,000.’

I know the capital limit is out of date. Does this mean that the monthly payment made to the claimant should be added to the total of other capital held and so would have an effect only if this tipped them over the capital limit? Hope this makes sense to someone.

Thank you.