Illustration Guide - Repsource - Manulife Financial

The proposal, Continued
Important
notes
The proposal follows the basic workings of Manulife one:
• Incomes are deposited into the Main account, assuming that half will be
deposited on the 1 st and half on the 15 th of the month.
• Expenses are withdrawn from the Main account, half on the 1 st and half
on the 15 th of the month. (If you enter a number in the Accumulate for
field on the Cash Flow tab, it defers the expense withdrawals by that
many days.)
• Costs of other planning solutions and Manulife one administration fees
are deducted at month end.
• There should be a positive difference between incomes deposited and
expenses withdrawn, called the surplus.
• Main account, Investment account, Variable account, and Fixed account
interest for each month is deducted from the surplus.
• The balance is the amount of money available to pay down the
borrowings.
• This money is first applied to the structured Fixed account principal
payment and then to the structured Variable account principal payments.
• Any money left is used to reduce the borrowings in the Main account.
• Once Main account borrowings are fully repaid, any money left is applied
to pay down Variable account borrowings, beyond what has been setup.
• Once the Main and all Variable account borrowings are fully repaid, any
money left is applied to the Fixed account borrowings, subject to the
maximum overpayment allowable (20% of the original fixed amount).
• Any money left in the Main account that cannot be applied to the Fixed
account accumulates in the Main account at the interest rate entered on
the one Account – Report Options tab.
To avoid any complications around Fixed and Variable account payments,
the system will not allow you to run the proposal unless those payments are
possible, given the clients' incomes and expenses, as previously discussed.
You have entered all the information necessary for the creation of an Account
Proposal. Turn to the next section to learn how to create proposal reports.
Manulife one Illustration Guide 28 December, 2000