reset feature on Ideal Segregated Funds - Standard Life
reset feature on Ideal Segregated Funds - Standard Life
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.