KEY FEATURES OF THE PORTFOLIO BOND (IPS). - Legal & General

PORTFOLIO BOND (IPS) – KEY FEATURES2ABOUT US.The Legal & General Group, established in 1836, is one of the UK’s leadingfinancial services companies. As at 31 December 2013, we were responsible forinvesting £452 billion worldwide on behalf of investors, policyholders andshareholders. We also had over 7.9 million customers in the UK for our lifeassurance, pensions, investments and general insurance plans.WHAT ARE KEY FEATURES?The Financial Conduct Authority is afinancial services regulator. It requires us,Legal & General, to give you this importantinformation to help you to decide if makingan additional investment into your PortfolioBond is right for you. You should read thisdocument carefully so that you understandwhat you are buying, and then keep it safefor future reference.USING THIS DOCUmENTWe’ve tried to use plain language to keepthe Key Features easy to understand. You’llfind explanations of any technical termswe use in the glossary on page 12 of thisdocument. Whenever terms covered in theglossary appear in the main text, we’vehighlighted them in blue.OTHER DOCUmENTSYou should read this document alongsidethe following other documents youradviser will give to you:• Your Illustration.• The Funds key features, which explainsthe basics of investing in funds and theimportant things you need to knowabout them.You can also ask your adviser for theProduct Guide, which contains theterms and conditions that apply to youradditional investment. We’ll send thisto you once your additional investmenthas started.FINDING OUT mOREThis icon appears when more detailedinformation is available elsewhere.If you’d like to see any of the otherdocuments we mention before makingyour additional investment, please askus or your adviser.

PORTFOLIO BOND (IPS) – KEY FEATURES3KEY FEATURESOF THE PORTFOLIOBOND (IPS).FOR ADDITIONAL INVESTmENTS INTO ExISTINGCONTRACTS ONLYITS AImSRISKS• To grow your investment over five yearsand more.• To give you the option of taking an income.YOUR INVESTmENT• You make an additional investment of atleast £5,000.• There’s no fixed term but you should considerthis as a medium to long-term investment, beprepared to invest for at least five years, andideally not tie yourself to a particular end date.• If you cash in all or part of your additionalinvestment, the amount you receive may bereduced by an early surrender charge.GENERAL• The value of your additional investment can fallas well as rise, so you could get back less thanyou invest.• You might get back less than is shown in yourIllustration if:– the funds you invest in grow at a lower rate,– the charges are higher,– you move your investment into other funds withhigher charges, or– you take more money out.• If you choose to cancel your additional investmentin the first 30 days, you may get back less thanyou invested.FUND RISKS• There are specific risks relating to the funds you caninvest in. Those applying to your chosen fund areset out in the accompanying Funds key features.The Money Advice Service provides free and independent information about investments. You can find out moreabout investment risk at: www.moneyadviceservice.org.uk/en/categories/planning-your-investments

PORTFOLIO BOND (IPS) – KEY FEATURES4qUESTIONSAND ANSWERS.This section answers some important questions about making an additionalinvestment into your Portfolio Bond to give you a better idea of how it worksand the options available to you.WHAT DO YOU DO WITH mY mONEY?• We invest your money in the funds you’ve chosen with your adviser.• The fund may be managed by us or an external fund manager.• Each fund is divided into units of equal value and shared out amongall of the investors in that fund. Your share of a fund is the number ofunits we buy for you.• The number of units we buy depends on how much you invest, yourallocation rate and the unit price when we buy the units.• Your bond consists of a series of identical contracts called policies.Your units are held in these policies to give you choices as to how youtake money out.• We’ll set up your additional investment with the same lives assuredand policyholders as those named on your bond.NOTES• The value of your bond is basedon the number of units youhold in a fund and the unit priceapplicable to those units.• One of the people named asa life assured on your bondmust be aged 89 or less at thetime you make your additionalinvestment.For a full list of the funds available, please see the Funds key features.Your Illustration shows your chosen fund and the allocation rate we’lluse to buy your units.For more details of units, unit prices and allocation rates, please see theProduct Guide.For details of how we manage our funds and calculate unit prices,please ask for a copy of our A guide to how we manage our unitlinked funds.

PORTFOLIO BOND (IPS) – KEY FEATURES7WHAT ARE THE CHARGES?• Charges are made to cover the various costs involved in setting upand managing your additional investment such as:– the day to day management of your chosen fund,– administration,– the costs of buying and selling assets,– payment to your adviser.ANNUAL FUND CHARGE• The annual fund charge covers our costs and, where you choose anexternal fund, that company’s costs for managing the fund as well.• The charge varies by fund. Your Illustration shows the current chargefor your chosen fund.• Additional expenses are incurred when managing a fund. Theadditional expenses are taken into account in your Illustration.For more details about the annual fund charge and additional expenses,and how they’re applied please see the Product Guide.There are a number of ways you can find out the current annual fundcharge for all funds. You can:• Go to our website at www.legalandgeneral.com• Ask your adviser for the most recent version of our Funds key features.• Contact us. Details are shown in the How can I contact you? sectionon page 9.NOTES• Annual fund charges andadditional expenses arereviewed regularly and canchange at any time.• We’ll tell you what the currentannual fund charge is for thefund you’re invested in at leastonce a year.• The annual charge is taken intoaccount when calculating theunit price of each fund so you’llnot see a specific deductionfrom your bond for this charge.OTHER CHARGESInitial charge• There’s an initial charge if the allocation rate shown on the first pageof your Illustration is less than 100%.For more details about the initial charge and allocation rates please seethe Product Guide.Early surrender charge• Your Illustration shows the amount, the length of time it will apply forand effect of this charge, in the What will the charges be? section. It’sreferred to as a ‘Reduction in cash value’.• The early surrender charge doesn’t apply to regular amounts you takefrom your additional investment to provide you with an income.For more details about early surrender charges, please see theProduct Guide.

PORTFOLIO BOND (IPS) – KEY FEATURES8WHAT ABOUT TAx?• The funds are subject to tax on investment income received and oncapital gains. We pay this tax and you cannot reclaim it.• When you take money from your additional investment it’s free ofpersonal income tax at the basic rate. It’s also free of capital gains tax.• You may have to pay some income tax if:– you take money from your additional investment above certainlimits or you cash in any of your additional investment whilstyou’re a higher or additional rate tax payer,– you become a higher or additional rate tax payer due to the moneyyou receive from your additional investment.• If you die, the people who inherit your bond may have to pay someincome tax. They may also have to pay some inheritance tax if youhaven’t put your bond into a trust. Your adviser will be able to helpyou to do this if it’s appropriate for you.• If you’re eligible for any age allowance, working tax credit or child taxcredit, your allowance may be reduced if you take money out. Thiscould increase your tax bill.NOTES• This tax information is givenbased on our understanding ofcurrent tax law relating to lifeassurance contracts. Tax lawmay change in the future.It’s possible to take money from your bond in a tax-efficient way. Howmuch tax you pay on the money you take out of your bond depends onyour individual circumstances. Your adviser will be able to provide youwith advice on the best way to take money out.Before you take money from your additional investment or talk toyour adviser about it, we suggest you read the Product Guide for moredetails of the tax treatment of your bond.

PORTFOLIO BOND (IPS) – KEY FEATURES10OTHERINFORmATION.LAW AND LANGUAGECOmPENSATION SCHEmEThe contract you enter into with us is governed byEnglish Law. All customer communications are onlyavailable in English. All communications from us willnormally be by letter or telephone.OUR REGULATORLegal & General Assurance Society Limited is authorisedby the Prudential Regulation Authority and regulatedby the Financial Conduct Authority and the PrudentialRegulation Authority. We’re entered on the FinancialServices Register under number 117659. You cancheck this atwww.fca.org.uk/firms/systems-reporting/register oryou can call 0800 111 6768.UK RESIDENCYWe’re covered by the Financial Services CompensationScheme (‘the scheme’). You may be entitled tocompensation from the scheme if we can’t meet ourfinancial obligations. This depends on the type ofbusiness and the circumstances of the claim.Currently 90% of the value of the valid claim is coveredby the scheme. There is no upper financial limit on theclaim.It’s important to understand that if you choose toinvest in an external fund, your investment willactually be held in a Legal & General life fund, notdirectly in the fund underlying the external fund.This means if you invest in an external fund and thecompany managing the fund is unable to meet itsobligations, you don’t have the right to take actionor seek compensation from that other company.In addition, our rights to recover losses caused bybreaches by a company managing an external fundmay not be as extensive as your rights would be if youinvested directly in the underlying fund.You can get more information about the schemeat www.fscs.org.ukThe bond is designed for policyholders who are UKresidents. You should speak to your adviser to confirmif the bond is still suitable for you if you:• are currently a non-UK resident or become a non-UKresident after you invest, or• are subject to tax in another country or becomesubject to tax in another country after you invest.

PORTFOLIO BOND (IPS) – KEY FEATURES11HOW TO COmPLAINCONFLICTS OF INTERESTIf you’d like to complain about any aspect of ourservice, or would like us to send you a copy of ourinternal complaint handling process, please contactus. Our details can be found in the How can I contactyou? section on page 9.Any complaints we can’t settle can be referred to:The Financial Ombudsman ServiceSouth Quay Plaza183 Marsh WallLondon E14 9SRMaking a complaint will not affect your legal rights.During the term of your investment conflicts of interestmay arise between you and us, our employees, ourassociated companies or our representatives.A conflict of interest is where our duties to you as acustomer may conflict with what’s best for ourselves.To ensure we treat customers consistently and fairly,we have a policy on how to identify and managethese conflicts.A copy of the policy is available on request from theaddress shown in the How can I contact you? sectionon page 9.0800 023 4567 (free for people phoning from a fixedland line)0300 123 9123 (calls to this number are charged at thesame rate as 01 or 02 numbers on mobile phone tariffs)complaint.info@financial-ombudsman.org.uk or visitwww.financial-ombudsman.org.ukREmEmBER, IF YOU’REUNSURE ABOUT ANYTHING,PLEASE ASK.While we do everything we can to keep ourproducts simple and explain them clearly, werecognise that there is a lot to understand. If youhave any questions at all about the bond, pleaseask your adviser or contact us using the detailson page 9.CUSTOmER CATEGORYThere are various categories of client set out in thefinancial regulations. If you buy this Legal & Generalproduct, we will treat you as a ‘retail client’. Being aretail client gives you the greatest level of protectionunder the regulations and ensures you get fullinformation about any products you buy.If, under the regulations, you are a professional clientor eligible counterparty, we will still treat you as aretail client although this would not necessarily meanthat you would be eligible to refer any complaints tothe Financial Ombudsman Service or to make a claimunder the Financial Services Compensation Scheme.

PORTFOLIO BOND (IPS) – KEY FEATURES12GLOSSARY.This is an explanation of some common terms used in these Key Features.Additional investment A further lump sum investment into your existing bond.Allocation rateAssetsBondThe percentage of your money that’s used to buy units.The investments that make up a fund. For example, shares or cash.Our Portfolio Bond is a lump sum life assurance contract used for investment purposes.External fund or funds A fund managed by a company other than us.External fund manager A fund manager other than us.Fund or funds(also known as‘unit-linked fund’)IllustrationIncomeLife assuredPoliciesPolicyholderTrustUnitsUnit price or pricesWorking dayA collection of assets that the bond can be invested in. These assets may be managedby us or other investment management companies. Where we refer to ‘fund’ in thisdocument it can mean fund or funds.A document that forms part of these Key Features that provides a guide to howmuch you might get back from your investment. It’s based on a number of exampleinvestment growth rates and reflects the charges you may pay over the time you’reinvested. It assumes that charges will remain at their current level and your fundselection and any income remain unaltered throughout the term of your bond.Where income is used in this document we’re referring to regular payments madefrom your bond that are used to provide you with an income.The person, or persons, on whose life your bond depends as described in theProduct Guide.A series of identical insurance contracts. Each policy has its own unique numberand can be individually recognised. As a group, the policies make up the bond.The legal owner, or owners, of your bond.A legal arrangement that allows investments or property to be held for the benefitof someone else without giving them full control of it.A unit is a share of a fund. Each fund is split into a series of units. The number of unitsyou hold is your share of the fund.A price calculated each working day that is used to value units.Any day from Monday to Friday inclusive, excluding English public holidays.

www.legalandgeneral.comLegal & General Assurance Society LimitedRegistered in England and Wales No. 00166055Registered office: One Coleman Street, London EC2R 5AAAuthorised by the Prudential Regulation Authority and regulated by theFinancial Conduct Authority and the Prudential Regulation Authority.A member of the Association of British Insurers.W13775 03/14 Approved: 12/13 Approval number: H0145117