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reset feature on Ideal Segregated Funds - Standard Life

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Retirement<br />

Investments<br />

Insurance<br />

Talk so<strong>on</strong>.<br />

www.standardlife.ca<br />

<strong>Ideal</strong> <strong>Segregated</strong> <strong>Funds</strong> are offered under<br />

<strong>Standard</strong> <strong>Life</strong>’s savings and retirement<br />

income plans, which are insurance<br />

products.<br />

A descripti<strong>on</strong> of the key <str<strong>on</strong>g>feature</str<strong>on</strong>g>s of<br />

<strong>Standard</strong> <strong>Life</strong>’s <strong>Ideal</strong> <strong>Segregated</strong> <strong>Funds</strong> is<br />

c<strong>on</strong>tained in the Informati<strong>on</strong> Folder.<br />

Subject to any applicable death and<br />

maturity guarantee, any part of the<br />

premium or other amount allocated to an<br />

<strong>Ideal</strong> <strong>Segregated</strong> Fund is invested at the<br />

risk of the policyholder and may increase or<br />

decrease in value according to fl uctuati<strong>on</strong>s<br />

in the market value of the assets of the <strong>Ideal</strong><br />

<strong>Segregated</strong> Fund.<br />

The <strong>Standard</strong> <strong>Life</strong> Assurance Company of Canada<br />

February 1, 2007<br />

6022A-02-2007<br />

Investment Soluti<strong>on</strong>s<br />

This is all about the<br />

<str<strong>on</strong>g>reset</str<strong>on</strong>g> <str<strong>on</strong>g>feature</str<strong>on</strong>g><br />

<strong>on</strong> <strong>Ideal</strong><br />

<strong>Segregated</strong><br />

<strong>Funds</strong><br />

with <strong>Standard</strong> <strong>Life</strong>


Hello.<br />

When <strong>Standard</strong> <strong>Life</strong> talks<br />

about helping you get the<br />

most out of your financial<br />

plans, we mean precisely<br />

that. Who wants to watch<br />

their investment gains slip<br />

away when the market<br />

isn’t doing well? Our new<br />

<str<strong>on</strong>g>reset</str<strong>on</strong>g> <str<strong>on</strong>g>feature</str<strong>on</strong>g> 1 can help you<br />

sidestep this situati<strong>on</strong> by<br />

giving you the chance to<br />

increase your maturity and<br />

death benefit guarantees to<br />

reflect the growth of your<br />

assets.<br />

The decisi<strong>on</strong> about when to lock-in is<br />

entirely yours (and in fact, you can <str<strong>on</strong>g>reset</str<strong>on</strong>g><br />

twice a year) 1 . When the market does<br />

well, so do you. When it doesn’t do so<br />

well, your m<strong>on</strong>ey is protected against<br />

signifi cant losses.<br />

Resets take it up a notch:<br />

you get additi<strong>on</strong>al security<br />

<strong>Standard</strong> <strong>Life</strong>’s <strong>Ideal</strong> <strong>Segregated</strong> <strong>Funds</strong> already<br />

have built-in <str<strong>on</strong>g>feature</str<strong>on</strong>g>s to protect your premiums<br />

such as a 75% maturity benefi t guarantee and a<br />

100% death benefi t guarantee 2 . In other words,<br />

no matter what happens to the market, you, as<br />

the owner of the policy, can get back at least<br />

75% of the premiums you paid when the policy<br />

matures, or your benefi ciaries will get back no<br />

less than 100% of the premiums paid up<strong>on</strong><br />

death 3 . If you made a surrender, the amount<br />

guaranteed will decrease proporti<strong>on</strong>ately with<br />

the surrender.<br />

Resets take it <strong>on</strong>e step further: If your segregated<br />

funds go up in value, you can <str<strong>on</strong>g>reset</str<strong>on</strong>g> 1 your<br />

guarantees to refl ect the gain. That means the<br />

75% maturity benefi t and 100% death benefi t<br />

guarantees can cover an amount even greater<br />

than the amounts you allocated to the policy.<br />

Your new policy value will depend <strong>on</strong> how well<br />

the market performed, and when you decided<br />

to <str<strong>on</strong>g>reset</str<strong>on</strong>g>.<br />

1 Resets are available <strong>on</strong> our no-load <strong>Ideal</strong> <strong>Segregated</strong><br />

<strong>Funds</strong> with <str<strong>on</strong>g>reset</str<strong>on</strong>g> opti<strong>on</strong>. You can benefi t from <str<strong>on</strong>g>reset</str<strong>on</strong>g>s<br />

until age 70, however, <str<strong>on</strong>g>reset</str<strong>on</strong>g>s are not allowed in the<br />

10-year period prior to your policy maturity date.<br />

2 If the annuitant is age 80 or over when the policy<br />

is issued, the death benefi t guarantee is 75% of<br />

the premiums paid to the policy less proporti<strong>on</strong>al<br />

surrenders.<br />

3 On n<strong>on</strong>-registered policies, you can designate some<strong>on</strong>e<br />

else as the annuitant (or pers<strong>on</strong> insured under the<br />

policy), and the death benefi t will be payable <strong>on</strong> that<br />

pers<strong>on</strong>’s death.


Take a look at how <str<strong>on</strong>g>reset</str<strong>on</strong>g>s work<br />

Without <str<strong>on</strong>g>reset</str<strong>on</strong>g>s<br />

Let’s assume you are 40 years old and you put<br />

$10,000 in our <strong>Ideal</strong> <strong>Segregated</strong> Fund policy.<br />

Without a <str<strong>on</strong>g>reset</str<strong>on</strong>g>, the death benefi t guarantee is<br />

$10,000 and the maturity benefi t guarantee is<br />

$7,500 regardless of market performance. Of course,<br />

if the market value of your policy increases over the<br />

years, you get the higher of the market value or the<br />

maturity guarantee (the same rules apply to the<br />

death benefi t guarantee).<br />

Resets change the picture<br />

Let’s say your investment of $10,000 has grown to<br />

$16,000 over four years. If you want to benefi t from<br />

this gain you should <str<strong>on</strong>g>reset</str<strong>on</strong>g> your guarantees, which<br />

would result in the following:<br />

Resetting in the 4 th year secures:<br />

$16,000 death benefi t guarantee<br />

(increase of $6,000)<br />

$12,000 maturity benefi t guarantee<br />

(increase of $4,500)<br />

After 15 years, the market value grows to<br />

$23,000. You decide to <str<strong>on</strong>g>reset</str<strong>on</strong>g> again so that your<br />

guarantees refl ect that growth.<br />

Resetting in the 15 th year secures:<br />

$23,000 death benefi t guarantee<br />

(increase of $13,000 from original<br />

guaranteed amount)<br />

$17,250 maturity benefi t guarantee<br />

(increase of $9,750 from original<br />

guaranteed amount)<br />

Simply put, <str<strong>on</strong>g>reset</str<strong>on</strong>g>s provide you with the<br />

opportunity to lock-in market gains,<br />

thereby minimizing downside risk.<br />

Here’s a graphic depicti<strong>on</strong> of how your<br />

guarantees would be improved over a 25-year<br />

period to your target retirement age, had you<br />

<str<strong>on</strong>g>reset</str<strong>on</strong>g> your guarantees <strong>on</strong>ce in year 4 and a<br />

sec<strong>on</strong>d time in year 15. This example assumes<br />

no surrenders were made under the policy 4 .<br />

$25,000<br />

$20,000<br />

Reset in 4<br />

$15,000<br />

$10,000<br />

Policy<br />

$5,000<br />

$0<br />

Policy Value<br />

0 5 10 15<br />

Year<br />

20<br />

Maturity<br />

Date<br />

25<br />

No <str<strong>on</strong>g>reset</str<strong>on</strong>g>s allowed in last 10 years<br />

of the policy<br />

th Reset in 15<br />

year<br />

New Death Benefi t Guarantee: $16,000<br />

New Maturity Benefi t Guarantee: $12,000<br />

th Initial Premium:<br />

year<br />

$10,000<br />

New Death Benefi t Guarantee: $23,000<br />

Death Benefi t<br />

Guarantee: $10,000<br />

Maturity Benefi t<br />

Guarantee at ACD*:<br />

New Maturity Benefi t Guarantee: $17,250<br />

$7,500<br />

This chart is for illustrati<strong>on</strong> purposes <strong>on</strong>ly and does not refl ect the performance of any particular fund.<br />

* Annuity Commencement Date (or policy maturity date).<br />

4 If you do decide to surrender funds, the amount of your guarantees reduces proporti<strong>on</strong>ally.


<strong>Ideal</strong> <str<strong>on</strong>g>reset</str<strong>on</strong>g>s at <strong>Standard</strong> <strong>Life</strong><br />

You can choose to <str<strong>on</strong>g>reset</str<strong>on</strong>g> twice per<br />

policy year, except in the last 10 years<br />

and until age 70<br />

Your policy maturity date doesn’t<br />

change, no matter how many times<br />

you decide to <str<strong>on</strong>g>reset</str<strong>on</strong>g><br />

The <str<strong>on</strong>g>reset</str<strong>on</strong>g> date is up to you<br />

Requesting a <str<strong>on</strong>g>reset</str<strong>on</strong>g> is easy. Ask your<br />

insurance representative for all the<br />

details.<br />

You w<strong>on</strong>’t incur any surrender<br />

charges if you take your m<strong>on</strong>ey out<br />

(but surrenders will proporti<strong>on</strong>ally<br />

reduce the amount of your guarantees)<br />

The <str<strong>on</strong>g>reset</str<strong>on</strong>g> <str<strong>on</strong>g>feature</str<strong>on</strong>g> applies to the entire<br />

family of <strong>Ideal</strong> <strong>Segregated</strong> <strong>Funds</strong>,<br />

including <strong>Ideal</strong> Portfolios<br />

It’s your choice...<br />

At <strong>Standard</strong> <strong>Life</strong>, we’re committed to providing<br />

fi nancial soluti<strong>on</strong>s that work for you – and<br />

that includes giving you the fl exibility to make<br />

decisi<strong>on</strong>s about protecting the growth of your<br />

assets. The <strong>Ideal</strong> <strong>Segregated</strong> <strong>Funds</strong> with <str<strong>on</strong>g>reset</str<strong>on</strong>g><br />

<str<strong>on</strong>g>feature</str<strong>on</strong>g> give you the opti<strong>on</strong> of locking-in gains –<br />

and securing your own peace of mind.

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