Class Plus 2 Information Folder and Contract Provisions - Empire Life

More documents

Recommendations

Info

The table below tracks the Tiered LWA amount and provides an explanation for the increase.Age Income base Tiered LWA % Tiered LWA Reason for Increased LWA65 400,000 4.00% $16,000 Initial LWA69 434,872 4.00% $17,395 Reset70 417,478 4.25% $17,743 Tiered LWA% Increase72 647,731 4.25% $27,529 Reset75 773,036 5.00% $38,652 Reset + Tiered LWA% Increase81 856,996 5.00% $42,850 ResetRichard’s LWA increased from an initial amount of $16,000 to a maximum of $42,850 as a result of an increase to the Income Basethrough triennial resets and an increase to the Single Tiered LWA Percentage for his age.CLASS PLUS 2 – SINGLE TIERED INCOME LATER SCENARIOSarah is 51 years old and is looking to retire at age 65. She currently has $250,000 to invest that she plans to use as retirementincome. She is looking for an investment that will allow her to be in the equities market and is also looking for:• an investment that has the potential to grow for14 years before she retires;• an investment that will be held predominately in equities;• an investment where there are a variety of funds to choose from; and• a Death Benefit Guarantee or the account value (whichever is higher) that would be payable to her beneficiaries.The Income Base Bonus* feature can help Sarah during her accumulation phase by increasing her Income Base by 5% each yearassuming no withdrawals are made. If Sarah needs to withdraw some money, she can withdraw up to the LWA determined eachDecember 31st provided she is at least 55 years old.37
Income Later – Down Market ScenarioThe Income Base Bonus contributes to Sarah’s potential future income and protects her against downside market risk. Despite poormarket conditions, Sarah’s Income Base would grow from $250,000 to $425,000, assuming no withdrawals are made. By the timeshe is ready to retire and start withdrawing her money, she would have an LWA of $17,000 ($425,000 x 4.0%).Income Later – Down Market ScenarioNote:For illustrative purposes thefund accumulates at a rateof return of -1.5%. A monthlyClass Plus Fee of 0.092%(1.10% annually) of theIncome Base was charged.LWA (Thousands)$18$16$14$12$10$8$6$4$2Market ValueLWA$300$250$200$150$100$50Market Value (in thousands)$051 52 53 54 55 56 57 58 59 60 61 62 63 64 65$0Age*The Income Base Bonus a notional amount added to the Income Base at the end of each calendar year following the initial deposit during which nowithdrawals are made for that year.Income Later – Up Market ScenarioUnder strong market conditions, in addition to the 5% Income Base Bonus, Sarah would also benefit from the automatic triennialreset feature. Every third Class Plus Anniversary Date an Income Base Reset may occur. The Income Base Reset occurs when themarket value of the Fund Class Units at the credit of her contract is greater than the current Income Base, which results in a higherIncome Base.When Sarah is ready to retire at age 65, her annual income would be $33,330 (4.0% of her $833,250 Income Base).The following scenario’smarket value is based onhistorical rates of returnusing a blend of 80% S&P/TSX and 20% DEX UniverseBond Index, from December31, 1991 to December 31,2011, with an average rateof return of 11.48%. Themonthly Class Plus Fee is0.092% of the Income Base.LWA (Thousands)$35$30$25$20$15$10$5Market ValueLWA$1,200$1,000$800$600$400$200Market Value (in thousands)$051 52 53 54 55 56 57 58 59 60 61 62 63 64 65$0Age38
Page 3 and 4: KEY FACTS FOR THE CLASS PLUS 2 CONT
Page 5 and 6: TABLE OF CONTENTS1. GENERAL INFORMA
Page 7 and 8: INTRODUCTIONThe Empire Life Insuran
Page 9 and 10: or, if applicable, the life of the
Page 11 and 12: certain transactions otherwise perm
Page 13 and 14: You may, by providing notice to us
Page 15 and 16: Example - calculation of the LWA (w
Page 17 and 18: Example - calculation of the LWA (w
Page 19 and 20: 6.6 Income Base ResetCommencing on
Page 21 and 22: We will notify you that the withdra
Page 23 and 24: On the death of the Annuitant:1) a
Page 25 and 26: The fee you pay for the Maturity an
Page 27 and 28: 8.3.3 Collection of the Class Plus
Page 29 and 30: Retirement income payments that con
Page 31 and 32: 11.7 Fees and Expenses Paid by the
Page 33 and 34: 11.15.1 Portfolio FundsWe currently
Page 35 and 36: The portfolio’s curve positioning
Page 37 and 38: Principal RisksRisks of investing i
Page 39 and 40: the foreign currency, the currency
Page 41 and 42: APPENDIX TO INFORMATION FOLDER34
Page 43: Income Now - Down Market ScenarioAs
Page 47 and 48: John and Mary are guaranteed an LWA
Page 49 and 50: Income Later - Down Market Scenario
Page 51 and 52: 1. GENERAL INFORMATION1.1 Definitio
Page 53 and 54: and a Senior Vice-President of Empi
Page 55 and 56: You may, by providing notice to us
Page 57 and 58: 1) the current LWA; and2) a new LWA
Page 59 and 60: 6.3 Maturity BenefitThe Maturity Be
Page 61 and 62: 6.11.1 Death Benefit GuaranteeThe D
Page 63 and 64: 8.3 Valuation Date and Fund Class U
Page 65 and 66: 2) “Spouse” or “common-law pa
Page 68: The Empire Life Insurance Company (

Class Plus 2 Information Folder and Contract Provisions - Empire Life

Create successful ePaper yourself

Delete template?

Save as template?