Freedom 58. Why should choosing the right retirement plan worry you? Birla Sun Life Insurance

Transcription

1 20 1 Why should choosing the right retirement plan worry you? Call Toll-free: sms FREEDOM to Regd. Office: One Indiabulls Centre, Tower 1, 15th & 16th Floor, Jupiter Mill Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai Reg. No. 109 Unique No.: 109L038V02 ADV/12/09-10/3683 VER 5/DEC/2009 Birla Sun Life Insurance Freedom 58 Actively manages your funds for a comfortable retired life

2 2 3 Self Managed Option with this option you can direct your investments in any of the 10 fund options based on your personal judgement. LifeCycle Managed Option with this option you allow us to manage and administer your investment portfolio on your behalf and according to your risk profile. In addition we offer you: Freedom to change investment option at any time Freedom to change premium allocation at any time for Self Managed option Freedom to change risk profile at any time Freedom to meet your ever-changing needs through unlimited top-up premiums and fund switches Freedom to meet any cash emergencies after three policy years through free of charge partial withdrawals or full surrender with applicable surrender charge Your retirement corpus accumulated by exercising either of the investment option is utilized at vesting (retirement) to purchase an annuity with us or any other life insurer of your choice. You have the freedom to opt for the best plan to enjoy your life, as you desire. You can vest your policy anytime after 5 completed years. ELIGIBILITY Entry Age 18 to 75 years Minimum Accumulation Phase 5 years. In this policy, the investment risk in investment portfolio is borne by the policyholder. LIVING LIFE SHAAN SE ALWAYS! BSLI Freedom 58 is designed so that you always remain in control of your destiny. Free from worries today, tomorrow and even when you retire. Every individual has aspirations and we at Birla Sun Life Insurance understand that these aspirations change over an individual's lifetime. With BSLI Freedom 58, we help you in making your aspirations come true. Take one step today to ensure a lifetime without worries YOUR BSLI FREEDOM 58 BSLI Freedom 58 is a unit linked, non-participating pension plan. A simple, hassle free plan it helps you accumulate your premiums and the investment returns thereof into a corpus for your retirement. We call this period of retirement corpus generation as the accumulation phase. Once you decide to vest your policy, you will enter into the income phase where your corpus will be used to purchase a stream of regular income payable for the rest of your lifetime. During the accumulation phase we offer two investment options for you to choose from: Policy Premium Premium payment term Regular Pay. Minimum Annual Policy Premium Rs. 10,000. BEFORE YOU CONTINUE READING All Unit Linked life insurance plans are different from Traditional insurance plans and are subject to different risk factors. The name of the investment funds and that of this plan do not in any way indicate the quality of the plan or future returns. In this plan, the investment risk in the investment funds chosen by you is borne by you. Investment funds are subject to investment risks and unit prices may go up or down reflecting the market value of the underlying assets. Past performance is no guarantee of future results. YOUR PREMIUMS You choose the annual policy premium amount you wish to pay regularly during the accumulation phase, subject to a minimum of Rs. 10,000 per annum. You can pay your policy premium monthly (3 monthly installment is required at entry), quarterly, half-yearly or annually. You can pay your policy premium by cash (up to Rs. 50,000 p.a.), cheque, credit card, and direct debit or for monthly and quarterly installments by salary deduction and ECS.

3 4 5 Can I increase my policy premium? No instead you can pay additional top-up premiums. Provided all due regular premiums have been paid. You have the freedom to top-up your corpus whenever you have additional savings during the accumulation phase. The minimum top-up premium is Rs. 5,000. Can I choose how to invest my premiums? Yes by choosing one of the two investment option. Your premiums will be used to purchase units in the various investment funds offered in this plan as per the investment option you choose. The units purchased in a particular investment fund will be based on the monetary amount invested in the investment fund divided by its then prevailing unit price. The total value of your investments in this plan is known as the Fund Value the balance of all units allocated to your policy multiplied by their respective then prevailing unit price. Investment Option Self Managed Option LifeCycle Option Investment Fund Switches Investment Fund Income Advantage Assure Creator Protector Magnifier Builder Maximiser Enhancer Multiplier Super 20 Investment Option Switches Risk Profile Conservative Moderate Aggressive Annual Reblancing Risk Profile Switches YOUR INVESTMENT OPTION With BSLI Freedom 58, you have the option to choose between two investment options Self Managed Option or LifeCycle Option. Can I change my investment option? Yes at any time and free of charge. You select your investment option in the application form. At any time while your policy is in effect, you can change from Self Managed to LifeCycle option or vice-versa. Self Managed Option In this option, you decide how to invest your premiums. We offer ten investment fund options ranging from 100% debt to 100% equity to suit your particular needs Income Advantage, Assure, Protector, Builder, Enhancer, Creator, Magnifier, Maximiser, Multiplier and Super 20 Fund.

4 6 7 If you wish to diversify your risk, you can choose to allocate your premium in varying proportions amongst the ten investment fund options. We record your allocation instructions as per the premium allocation percentage and our only requirement is that the percentage allocated to any investment fund be in increments of 5%, ranging from 5% to 100%. Can I change my premium allocation? Yes at any time and free of charge. You can avail of our premium re-direction facility and change your premium allocation percentages applicable to policy premiums and top-up premiums paid from that point onwards. Can I switch between investment funds? Yes at any time and free of charge. You can switch monies from one investment fund to another at any time provided the switched amount is for at least Rs. 5,000. LifeCycle Option Under the LifeCycle Option, your portfolio will be structured as per your age and risk profile you can decide whether you are conservative, moderate or aggressive in your approach towards investments. Your portfolio will then be monitored and administered by us, saving you the time and effort involved in overseeing it yourself. We automatically shift your investments from riskier assets to safer assets in line with your increasing age and risk profile on every policy anniversary. We will invest your premiums between the two investment funds, Maximiser (100% equity) and Income Advantage (100% debt) in a predetermined proportion based on the selected risk profile and your age when the premium is invested. Details about these two funds are explained later. The proportion invested in Maximiser (100% equity) will be according to the schedule given below the remaining amount will be invested in Income Advantage (100% debt): Can I switch between investment funds? No instead we will automatically rebalance your portfolio. We will rebalance your portfolio on each policy anniversary to ensure that the portfolio maintains its predetermined proportion in Maximiser and Income Advantage as per the risk profile you have selected. This is done free of charge. Accessing your investments Can I access my savings? Yes at any time after three completed policy years. You can make unlimited partial withdrawals after three complete policy years free of charge. Extant tax laws will be applicable. The minimum partial withdrawal is Rs. 5,000 and the maximum is the excess, if any, of your fund value over the higher of: One annual policy premium plus surrender charges applicable for the year of partial withdrawal or Top-up premiums paid by you during the three years preceding the partial withdrawal date Can I withdraw all of my savings? Yes at any time after three completed policy years. After the completion of three policy years, you can surrender your policy to us and receive its value at that time less applicable surrender charges. You can surrender your policy in the first three policy years but: we will retain a surrender charge; and we will defer the payment till the end of the third policy year The deferred payment will remain constant till paid to you. Risk Profile Age Conservative Moderate Aggressive % 70% 90% % 60% 80% % 50% 70% % 35% 55% % 20% 40% % 5% 25% Can I change my risk profile? Yes at any time and free of charge. You can switch risk profile at any time and all policy premiums and top-up premiums paid from that point onwards will be invested in Maximiser and Income Advantage according to your new risk profile.

5 TRACKING YOUR INVESTMENTS We provide you with a high level of transparency in all our plans to put you in total control. We will send you an annual statement detailing the number of units you have in each investment fund and their respective unit price as of the last policy anniversary We publish the unit prices of all investment funds on our website as well as in the newspapers YOUR BENEFITS Death Benefit Upon the unfortunate event of death during the accumulation phase, we will pay the fund value as a death benefit to your nominee. If the nominee is your spouse, the proceeds can be taken in a lump-sum or used to purchase an annuity amongst the then available options with us or with other life insurer. Vesting Benefit The vesting date is the date you decide to end the accumulation phase and enter the income phase. You have the freedom to vest at any time after the completion of 5 policy years subject to maximum vesting age of 90 years. On the vesting date, your fund value will be used to purchase an income stream payable for the rest of your lifetime. You have the option to: Enter into an income phase with us as per our then available products on your vesting date Enter into an income phase with another life insurer of your choice (open market option) rd Commute up to 1/3 of your fund value on the vesting date and receive the amount in a lump-sum and tax free (as per the current Income Tax laws) and rd annuitize the balance 2/3 to receive a stream of regular income OUR POLICY CHARGES Premium Allocation Charge Premium allocation charge is deducted from your premium when received and before invested in the investment funds of your choice. This charge is: Policy Year On Policy Premium 8% 2% 2% --- On Top-Up Premium 2% 2% 2% 2% This charge is guaranteed to never increase. Fund Management Charge The daily unit price of each investment fund is adjusted to reflect the fund management charge of (per annum of fund value): 1.00% for Income Advantage, Assure, Protector and Builder 8 9

6 1.25% for Enhancer and Creator 1.35% for Magnifier, Maximiser, Multiplier and Super 20 This may be changed by us in the future subject to IRDA approval. Policy Administration Charge Policy administration charge is deducted monthly by canceling units proportionately from each investment fund. The annual rate of this charge as a percentage of the annual policy premium is: Policy Year Policy Admin Charge 8% 8% 8% 3% This charge is guaranteed to never increase for the first three years, after which it can be increased by no more than by 5% per annum since inception. Surrender Charge Surrender charge is applied if and when you surrender your policy in the first 5 policy years. The amount you receive is the then current value of the fund value less this charge. This charge as a percentage of the annual policy premium is: Policy Year Surrender Charge 60% 55% 50% 45% 40% 0 This charge is guaranteed to never increase. Other Charges The current charge for policy revival is Rs We may increase this charge at any time in the future up to Rs. 1,000 per revival. Any request for partial withdrawal, premium re-direction, investment fund switch, change in investment option and change in risk profile is currently free of charge. We may however charge up to Rs. 500 per request at any time in the future. IRDA Approval Only when specified and within stated limits, we may increase/levy a particular charge at any time in the future. We, however, need to get prior approval from the IRDA before such charge increase is effective. Otherwise, all other charges in this policy are guaranteed to never increase during the tenure of the policy. Schedule A Investment Fund Option Risk Profile Asset Allocation* Min. Max. Income Advantage Very Low Debt Instruments, Money Market & Cash 100% 100% Equities & Equity Related Securities 0% 0% Assure Very Low Debt Instruments, Money Market & Cash 100% 100% Equities & Equity Related Securities 0% 0% Protector Low Debt Instruments, Money Market & Cash 90% 100% Equities & Equity Related Securities 0% 10% Builder Low Debt Instruments, Money Market & Cash 80% 90% Equities & Equity Related Securities 10% 20% Enhancer Medium Debt Instruments, Money Market & Cash 65% 80% Equities & Equity Related Securities 20% 35% Creator Medium Debt Instruments, Money Market & Cash 50% 70% Equities & Equity Related Securities 30% 50% Magnifier High Debt Instruments, Money Market & Cash 10% 50% Equities & Equity Related Securities 50% 90% Maximiser High Debt Instruments, Money Market & Cash 0% 20% Equities & Equity Related Securities 80% 100% Multiplier High Debt Instruments, Money Market & Cash 0% 20% Equities & Equity Related Securities 80% 100% Super 20 High Debt Instruments, Money Market & Cash 0% 20% Equities & Equity Related Securities 80% 100% * In each Investment Fund Option, the Money Market & Cash asset allocation will not exceed 40%. Money Market Instruments are debt instruments of less than one year maturity. It includes mutual funds, collateralized borrowing & lending obligation, certificate of deposits, commercial papers etc. Investment in Money Market Instrument supports better liquidity management. INVESTMENT FUND OPTIONS Income Advantage Objective: To provide capital preservation and regular income, at a high level of safety over a medium term horizon by investing in high quality debt instruments. Strategy: To actively manage the fund by building a portfolio of fixed income instruments with medium term duration. The fund will invest in government securities, high rated corporate bonds, high quality money market instruments and other fixed income securities. The quality of the assets purchased would aim to minimize the credit risk and liquidity risk of the portfolio. The fund will maintain reasonable level of liquidity

7 12 13 Assure Objective: To provide capital conservation, at a high level of safety and liquidity through judicious investments in high quality short-term debt. Strategy: To generate better return with low level of risk through investment into fixed interest securities having short-term maturity profile. Protector Objective: To generate consistent returns through active management of a fixed income portfolio and focus on creating a long-term equity portfolio, which will enhance the yield of the composite portfolio with minimum risk appetite. Strategy: To invest in fixed income securities with marginal exposure to equity up to 10% at low level of risk. This investment fund is suitable for those who want to preserve their capital and earn a steady return on investment through higher exposure to debt securities. Builder Objective: To build capital and generate better returns at moderate level of risk, over a medium or long-term period through a balance of investment in equity and debt. Strategy: To generate better returns with moderate level of risk through active management of a fixed income portfolio and focus on creating a long-term equity portfolio, which will enhance the yield of the composite portfolio with low level of risk appetite. Enhancer Objective: To grow capital through enhanced returns over a medium to long-term period through investments in equity and debt instruments, thereby providing a good balance between risk and return. This investment fund is suitable for those who want to earn higher return on investment through balanced exposure to equity and debt securities. Strategy: To earn capital appreciation by maintaining a diversified equity portfolio and seek to earn regular returns on the fixed income portfolio by active management resulting in wealth creation for policy owners. Creator Objective: To achieve optimum balance between growth and stability to provide longterm capital appreciation with balanced level of risk by investing in fixed income securities and high quality equity security. This fund option is for those who are willing to take average to high level of risk to earn attractive returns over a long period of time Strategy: To invest into fixed income securities & maintaining diversified equity portfolio along with active fund management policyholder's wealth in long run. Magnifier Objective: To maximize wealth by managing diversified portfolio. Strategy: To invest in high quality equity security to provide long-term capital appreciation with high level of risk. This fund option is suitable for those who want to have wealth maximization over long-term period with equity market dynamics.

8 14 15 Maximiser Objective: To provide long term capital appreciation by actively managing a welldiversified equity portfolio of fundamentally strong blue chip companies. Further, the fund seeks to provide a cushion against the sudden volatility in the equities through some investments in short-term money market instruments. Strategy: To build and actively manage a well-diversified equity portfolio of value and growth driven stocks by following a research focused investment approach. While appreciating the high risk associated with equities, the fund would attempt to maximize the risk-return pay off for the long-term advantage of the policyholders. The fund will also explore the option of having exposure to quality mid cap stocks. The non-equity portion of the fund will be invested in good rated (P1/A1 & above) money market instruments and fixed deposits. The fund will also maintain a reasonable level of liquidity. Multiplier Objective: To provide long-term wealth maximization by actively managing a welldiversified equity portfolio, predominantly comprising of companies whose market capitalization is close to Rs crores and above. Strategy: To build and actively manage a well-diversified equity portfolio of value & growth driven stocks by following a research-driven investment approach. The investments would be predominantly made in mid cap stocks, with an option to invest 30% in large cap stocks as well. While appreciating the high risk associated with equities, the fund would attempt to maximize the risk-return pay-off for the long-term advantage of the policyholders. The fund will also maintain reasonable level of liquidity. Super 20 Objective: To generate long-term capital appreciation by making investments in fundamentally strong and liquid large cap companies. Strategy: to build and actively manage an equity portfolio of 20 fundamentally strong large cap stocks in terms of market capitalization. The stocks will be selected by following an in-depth research-focused investment approach. The fund will attempt to adequately diversify across sectors. The fund will adopt a disciplined yet flexible long term approach towards investing with a focus on generating long term capital appreciation. The non equity portion of the fund will be invested in high rated money market instruments and fixed deposits. The fund will also maintain reasonable level of liquidity. MORE INFORMATION Current Tax Benefits You will be eligible for tax benefits under Section 80CCC and Section 10 (10A) of the Income Tax Act, Under Section 80CCC, premiums up to Rs. 100,000 are allowed as a deduction from your taxable income each year Under Section 10 (10A), the tax benefits are on the commuted value of the benefits on the vesting date, subject to mentioned exclusions Service Tax and other levies Service Tax and other levies, as applicable, will be levied as per the extant tax laws. Premium Discontinuance If you are unable to pay the policy premium by the due date, you will be given a grace period of 30 days during which time your policy will continue. If you do not pay your premium within the grace period, the following will be applicable: During the first three policy years Your policy will lapse if we do not receive the entire policy premium by the end of the grace period. Your policy will cease and your fund value will be held in suspense after deduction of surrender charges. This net amount will be paid out to you only at the end of the third policy year or the end of the two-year revival period, whichever is later. If the life insured dies while the policy is not yet revived, we will pay the fund value as of the lapse date immediately and terminate the contract. You can revive your policy within two-years from its lapse date by paying all outstanding policy premiums. After three completed policy years If we do not receive the entire policy premium by the end of the grace period, then you will be given a period of two years to pay all outstanding premiums till date. Your policy will continue during these two years, as well as all benefits and charges. At the end of this two-year period, we will give you the choice to either surrender your policy or continue it without further policy/ top-up premiums. If continued, your fund value will be paid to you should it drop to one annual policy premium and the policy will be terminated. Policy Loans We do not offer this facility under this plan. Free-Look Period You will have the right to return your policy to us within 15 days from the date of receipt of the policy. We will pay the fund value plus all charges levied till date (excluding the fund management charge) once we receive your written notice of cancellation (along with reasons thereof) together with the original policy documents. Depending on our then current administration rules, we may reduce amount of the refund by expenditures incurred by us in issuing your policy and as permitted by the IRDA and in acordance to IRDA (Protection of Policyholders Interest) Regulations, TERMS & CONDITIONS Unit Price On each business day and for each investment fund, we determine the unit price by dividing the net asset value (NAV) of the investment fund at the valuation time by the number of units in existence for the investment fund in question. We publish the unit price of all investment funds on our website as well as in the newspapers. The NAV is determined based on whether we are purchasing (appropriation price) or selling (expropriation price) assets in order to meet the daily transactions of unit

9 16 17 allocation or redemption associated with the investment fund. When appropriation (expropriation) price is applied, the NAV of the investment fund is the market value of investments held by the fund; plus (less) the expenses incurred in purchasing (selling) assets; plus the value of current assets; plus any accrued income net of fund management charges; less the value of any current liabilities or provisions. This NAV divided by the number of units existing on the valuation date, before units are allocated (redeemed), gives the amount of money we put in to (take out of) the investment fund per unit allocated (redeemed). Section 41 of the Insurance Act, 1938 No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. Section 45 of the Insurance Act, 1938 No policy of life insurance effected after the coming into force of this act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the life insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policyholder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose. Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the application. BIRLA SUN LIFE INSURANCE A COMING TOGETHER OF VALUES About Birla Sun Life Insurance Birla Sun Life Insurance Company Limited (BSLI) is a joint venture between the Aditya Birla Group, a well known Indian conglomerates and Sun Life Financial Inc, leading international financial services organization from Canada. With an experience of over 9 years, BSLI has contributed significantly to the growth and development of the Indian Life Insurance industry and currently is one of the leading life insurance companies in the country. Enjoying trust of its over 2 Million customers, BSLI is known for innovation. BSLI offers a complete range of pension, health and life insurance products and has an extensive reach in over 1500 markets through its network of 600 branches and 1,64,423 empanelled advisors. This is well supported by the sound financial that the Company has. The AUM of Birla Sun Life Insurance surpassed Rs. 9,168 crs and it has a robust capital base of over Rs. 1,999.5 crs as on March 31, For more information, please visit

10 18 19 About Aditya Birla Group A US $28 billion corporation, the Aditya Birla Group is in the league of Fortune 500 worldwide. It is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. The group operates in 25 countries across six continents truly India's first multinational corporation. Aditya Birla Group through Aditya Birla Financial Services Group (ABFSG), has a strong presence across various financial services verticals that include life insurance, fund management, distribution & wealth management, security based lending, insurance broking, private equity and retail broking. In FY , the consolidated revenues of ABFSG from these businesses crossed Rs crs, registering a growth rate of 36%. For more information, please visit About Sun Life Financial Inc. Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers.chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2009, the Sun Life Financial group of companies had total assets under management of $375 billion. For more information, please visit RISK FACTORS & DISCLAIMERS This policy is underwritten by Birla Sun Life Insurance Company Limited (BSLI). This is a non-participating unit linked pension plan without life cover. Birla Sun Life Insurance, Freedom 58, Self Managed Option, LifeCycle Option, Income Advantage, Assure, Protector, Builder, Creator, Enhancer, Magnifier, Maximiser, Multiplier and Super 20 are only the names of the Company, Policy, Investment Options and the Investment Funds respectively and do not in any way indicate the quality of the Policy, Investment Funds or their future prospects or returns. Unless specifically stated as guaranteed, policy charges can be modified by the company subject to the specified limits and prior IRDA approval. The value of the Investment Fund reflects the value of the underlying investments. These investments are subject to market risks and change in fundamentals such as tax rates etc affecting the investment portfolio. The premium paid in Unit Linked Life Insurance policies are subject to investment risk associated with capital markets and the unit price of the units may go up or down based on the performance of Investment Fund and factors influencing the capital market and the policy owner is responsible for his/her decisions. There is no guarantee or assurance of returns from the Investment Funds. BSLI reserves the right to recover levies such as the Service Tax levied by the authorities on insurance transactions. If there be any additional levies, they too will be recovered from you. This brochure contains the salient features of the plan. For further details please refer to the policy contract. Tax benefits are subject to changes in the tax laws. Insurance is the subject matter of the solicitation. For more details and clarification call your BSLI Insurance Advisor or visit our website and see how we can help in making your dreams come true.