Fact File. Guaranteed Return Plans

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1 Guaranteed Return Plans Fact File The Guaranteed Return Plans are built on the best thinking, the most tax efficient structures and the best investment strategies so that you can take advantage of optimal investment opportunities. You can choose between the Guaranteed Growth Plan and the Guaranteed Income Plan. This Fact File will allow you to understand your Guaranteed Return Plans and how you can make them work better for you.

2 Welcome Discovery Invest s Guaranteed Return Plans This Fact File is designed for your easy reference. Contents. Discovery Guaranteed Growth Plan Page. Discovery Guaranteed Income Plan 3. Access to your investment 4. Death before the end of the five-year term 5. Contributions to Guaranteed Return Plans 6. Fees, commissions and tax 7. Cessions and loans 8. Fraud and disclosure 9. Contact details

3 The Discovery Invest Guaranteed Return Plans Guaranteed Growth Plan The Discovery Guaranteed Growth Plan is an endowment policy that provides a guaranteed return on your lump sum contribution at the end of a five-year term. At the end of this term, your lump sum contribution plus the growth that has accrued will be paid to you in a tax-free lump sum. This is called the guaranteed maturity value. The guaranteed return and the guaranteed maturity value you will qualify for is shown on your policy schedule and is net of all taxes, fees and commissions. You must remain invested for the full five-year term to receive the guaranteed maturity value. Guaranteed Income Plan The Discovery Guaranteed Income Plan is a combination of an endowment policy and a voluntary annuity. The endowment policy provides a guaranteed return of your chosen percentage of your lump sum contribution at the end of the five-year term. You must remain invested for the full five years to receive this amount at the end of the term. The voluntary annuity is used to provide a monthly or annual income throughout the five-year term. At policy inception you may also choose to have a level income over the five years or for your income to grow at 5%, 0%, 5% or 0% each year. According to current legislation, a portion of the income amount will be taxed according to income tax tables as released by SARS every year unless a tax directive is provided to Discovery for a different rate. This is shown on your policy schedule. The percentage of the lump sum contribution you receive at the end of the term will be paid as a tax-free lump sum. Please consult your financial adviser or tax consultant for more details on the tax treatment of your benefits. The guaranteed income (before tax) as well as the lump sum that you will receive at the end of the five-year term is shown on your policy schedule and is net of all fees and commissions. 3 Access to your investment Because the Guaranteed Return Plans are structured as five-year products, it is recommended that you remain invested for the full term as the guarantees apply only at the end of the term. If however, you need to withdraw your money before the end of the five-year term, you will receive the adjusted market value of the underlying assets that we used to provide the guaranteed return. Note that this may be higher or lower than your initial contribution at the time of your withdrawal. The return you will receive on early withdrawal is capped at a maximum of the guaranteed return as reflected on your policy schedule accumulated to the date of withdrawal. In terms of current legislative restrictions (June 0), one partial surrender is permitted during the five years of your endowment policy with the exception of the first contract year where no partial surrenders are permitted. Any partial surrender may not exceed the contribution accumulated at 5% per year compound interest. After five years, you may make withdrawals from your endowment policy as required. For the Guaranteed Income Plan, the voluntary annuity will continue to be paid until the end of the five-year term. At the end of the five-year term, you will be able to reinvest the proceeds of your Guaranteed Return Plan in any investment options made available by Discovery Invest, or take your proceeds in full. 4 Death before the end of the five-year term If you die before the end of the five-year term, you will receive a lump sum payment. For the Discovery Guaranteed Growth Plan, an amount equal to the guaranteed maturity value reflected on your policy schedule will be paid to your beneficiaries provided you are younger than 70 years old. The policy will then end and no further amounts will be paid. For the Discovery Guaranteed Income Plan, an amount equal to the guaranteed maturity value of the endowment policy will be paid to your beneficiaries with no further payment at the end of the fiveyear term provided you are younger than 70 years old. The income from the voluntary annuity will be paid to your beneficiaries until the end of the five-year term. Please note that for the Guaranteed Growth Plan and the endowment policy of the Guaranteed Income Plan, all pre-existing conditions, physical defects, illnesses, bodily injuries or diseases that you have suffered from, were aware of, or have received medical treatment or advice for during three years prior to the commencement date, are excluded from the death benefit above. If your death was related to any of these pre-existing conditions at policy inception or as a result of suicide or if you are 70 years or older, your beneficiaries will receive the lump sum contribution (or in the case of the Discovery Guaranteed Income Plan, the amount allocated to the endowment policy) accumulated at the guaranteed return reflected on your policy schedule to the date of death. 5 Contributions to the Guaranteed Return Plans You may only make a once-off lump sum contribution to the Discovery Guaranteed Return Plans.

4 6 Fees, commissions and tax 9 Contact details Your financial adviser will receive financial adviser fees for providing advice. The guaranteed rates and income levels that you will receive will take into account all fees payable to Discovery and your financial adviser so there are no further amounts payable. All tax on the endowment policies including capital gains tax on the Equity Enhancer is taken into account in the rates and income provided by Discovery. If there are any changes to legislation or the tax treatment of these policies, we reserve the right to amend the guaranteed rate or income levels. Please remember that in addition to talking with your financial adviser, if you have any questions or service needs, you can call the dedicated Discovery Invest contact centre on You can also visit for additional resources and a downloadable version of this Fact File (downloadable as a PDF file). 7 Cessions and loans Your policy may only be ceded to another natural person or trust with a natural person as the beneficiary. It may not be ceded to a company or close corporation. You may not take a loan against the policy. 8 Fraud and disclosure 8. Your policy and all its benefits will be cancelled if you: Submit a fraudulent claim Use any fraudulent means or devices to make your claims Provide false information to obtain a benefit Knowingly allow anyone acting on your behalf to provide false information to obtain a benefit. 8. Consent to disclosure You are required to consent to the exchange of information, including medical information, between Discovery Invest, Discovery Life, any medical practitioner you have consulted or any other life office, Discovery Health and the Discovery Health Medical Scheme.

5 The Fact File is part of Discovery Invest s commitment to fairness and full compliance with legal requirements for financial service providers to provide detailed easy-to-understand information about how each product works. Each investor must consult their own financial adviser who must be an authorised financial services provider to advise the investor as to the suitability of the products and funds for the investor s personal investment needs. Discovery Life is a registered long-term insurer and an authorised financial services provider. Discovery Invest is an authorised financial services provider. Copyright Discovery Invest All rights reserved Physical address: 55 West Street Sandton Postal address: PO Box Benmore 00 Contact centre number: Fax number: GM_6478DI_04/07/0 IGRFFA 04/