Investment Management Guaranteed Outcome. Invest with certainty. Strive for the exceptional. Prosper.

Transcription

1 Investment Management Guaranteed Outcome Invest with certainty Strive for the exceptional. Prosper.

2 Guaranteed Outcome offers investors greater certainty, because the returns are guaranteed by Absa Bank Limited at maturity. Investors can choose whether to receive a monthly guaranteed income and/or receive a guaranteed maturity value. The product is underwritten by African Unity Life Limited and administered by Absa Linked Investment (AIMS), both registeredfinancial services providers. Description of the investment The product can be a single-premium, linked endowment policy providing a guaranteed maturity value after five years; a single-premium, linked, term-certain annuity policy providing a guaranteed monthly income over the five-year investment period; or a combination of two. Ideal investor This is the perfect product if you: Wish to have certainty with regard to maturity value and/or income received Require a tax efficient investment vehicle Require an additional estate planning tool Have voluntary savings to invest Are able to invest for a fixed term of five years.

3 Salient features and benefits About the investment Growth Policy Five-year, fixed return at maturity Return of capital at maturity Minimum investment of R Five-year, fixed monthly annuity payments Minimum investment of R Who can invest? Individuals Trusts (with natural persons as beneficiaries) Individuals On death Upon the death of the last surviving life assured, prior to the maturity date of the policy, provided that the policyholder was the last surviving life assured, a death benefit value equal to the market value of the investment instruments underlying the policy will be paid out to the beneficiary for proceeds, or to the estate Upon the death of the policyholder, prior to the termination date, African Unity Life shall pay either the monthly annuity payment or the lump sum value of the outstanding annuity payments to the nominated beneficiary for proceeds. The beneficiary will have to elect their preferred option

4 On surrender Growth Policy In terms of regulation, only one surrender is permitted during the five-year term and the amount payable is dependent on the market value of the investment instruments underlying the policy. The amount that may be paid out is limited to a return of the premium paid into the policy, plus 5% interest compounded annually. Any excess will be paid out to you on maturity of the policy. Upon surrender, African Unity Life reserves the right to levy a penalty of up to 5% of the surrender amount. You may not apply to surrender an amount of less than R The policy may be commuted in full prior to the termination date and the amount payable is dependent on the market value of the investment instruments underlying the policy. The amount that may be paid in terms of a full commutation is limited to a return of the premium paid into the policy, plus 5% interest compounded annually, less the aggregate of all annuity payments made in respect of the policy. Any excess will be paid out to you as an annuity until the termination date. African Unity Life reserves the right to levy a penalty of up to 5% of the commutation value of the policy. At the end of five years The guaranteed maturity value will become payable to the policyholder after which the policy will terminate. The policy will cease with no further benefits payable to the policyholder.

5 Life assured Growth Policy At least one life assured must be appointed. If no life assured is appointed, the policy owner will automatically be appointed the life assured. A maximum of three lives assured can be appointed. Where a beneficiary for ownership has been appointed, they will automatically be appointed as a second life assured in case of a single life assured having been appointed. The policy owner is automatically appointed the life assured. Beneficiary for ownership One beneficiary for ownership can be appointed. Said beneficiary can be changed at any point in time prior to the death of the last surviving life assured. Not applicable. Beneficiary for proceeds A maximum of five beneficiaries for proceeds may be appointed. Beneficiaries for proceeds can be appointed to receive the death benefit value on the death of the last surviving life assured provided that the policy owner was the last surviving life assured. The beneficiary for proceeds may not be appointed as a life assured. One beneficiary for proceeds can be appointed. This can only be the spouse or estate of the policy owner. Appointment of a beneficiary who is not the spouse will result in adverse tax consequences since Section 10A Exemption of the Income Tax Act will not apply. The beneficiary for proceeds may not be appointed as a life assured.

6 Growth Policy Tax In terms of current tax legislation, proceeds from this policy are received free of income and capital gains tax in the hands of the investor, either on withdrawal or maturity. However, the insurer will pay tax on the growth of the investment over the investment period and the rate/maturity value quoted to the investor is net of this. In terms of the current Income Tax Act, tax is payable in the hands of the policyholder at their marginal tax rate. The insurer is obliged to deduct income tax from the taxable portion of the, should this amount be above the tax threshold, and pay this over to the South African Revenue Services. Cooling-off period A 30-day cooling-off period applies to this investment policy. During this period, an investor may cancel the policy should there have been no benefit paid, or claim lodged, under the policy. All monies paid will be refunded to the investor, less any risk premiums incurred, and less any market loss where the value of the investment has decreased since the investment was made. Due to the impact of market movements, the investor may be refunded less than the amount invested. Commission Up to 3% plus VAT. Up to 1,5% plus VAT. Cession Outright or collateral cessions are allowed. Outright cession might have some capital gains tax implications. Please seek tax advice. Not allowed. The Guarantor Absa Bank Limited.

7 Important disclosure regarding Guaranteed Outcome The Policy is linked, which means that African Unity Life itself does not offer you, the policyholder, a guarantee of the returns you will earn under the policy. Rather, your investment returns are linked to a fixed-deposit instrument and, in the event that the Guarantor defaults on the guarantee, the policyholder carries the risk. Due to the nature of a linked policy, the investment risk of the Guarantor paying out on this fixed-deposit instrument is carried by you, the policyholder. However, by choosing the Guarantor with one of the highest credit ratings among South African banks to provide this fixed-deposit instrument, African Unity Life has acted to ensure that the investment risk to you has been mitigated to the best extent possible. For more information contact your financial adviser or AIMS Client Service AIMS Client Services (operating hours: Monday to Friday 08:00 to 16:30) Tel: Fax: aimsenquiries@absa.co.za