|
Administration details
Type of policy
The Flexible Investment Bond is a unit-linked whole of life, non-qualifying life assurance policy issued by Canada Life Limited.
Life assured
The Bond can be written on either a single life, joint life (first or second death) or joint life last death basis. There can be a maximum of 4 lives assured. Minimum age for lives assured is 3 months attained and maximum age at entry is 89 years attained.*
* For joint life second death, the maximum age of the youngest life assured is 89 years. For joint life first death, the maximum age of the oldest life assured is 89 years.
Policyholder age limits
Minimum age at entry is 18 attained. There is no maximum age.
Minimum/maximum investments
The minimum premium is £5,000. Additional amounts may be added to the Bond at any time, subject to a minimum of £1,500. Premiums of up to £1 million will normally be accepted. Amounts greater than this are subject to individual consideration.
Clustering
For added flexibility, the Bond can be divided into a cluster of separate identical policies of at least £1,000 each. This may help with your client’s tax planning on encashment.
Allocation rate
The allocation rates will be adjusted based on the size of the investment premium and the age of the life(s) assured.
Loyalty bonus
• The Level Option – there is a loyalty bonus of 0.5% of the fund value of each Bond at the end of its 5th year and every 5 years thereafter.
• The Deferred Option – there is a loyalty bonus of 2% of the fund value of each Bond at the end of its 10th year and 1% of the fund value of each Bond every 5 years thereafter.
Charging structure
There are two charging structures for the Flexible Investment Bond which will be for the Level Option and the Deferred Option. See ‘Charges’ below.
Top ups
The Bond allows for top ups to be added to the existing Bond subject to a minimum premium of £1,500. We will use the total investment amount, including the top up to determine the allocation rate to be used.
For example a £20,000 premium for a 30 year old will receive an allocation of 104%. If a top up of £35,000 is subsequently made this will receive the £50,000 allocation rate of 105% as the total investment is now above the £50,000 threshold.
Funds
The funds available for the Level Option are series 4 life funds.
The funds available for the Deferred Option are series 3 life funds.
Funds per policy
Up to 10 funds can be chosen for each premium paid. If top ups are subsequently made these may be applied to another set of different funds if required, again up to a maximum of 10.
Switches
We currently offer unlimited free fund switching. Any switch request will be effected on the next valuation date after receipt of request.
Phased investment
• Phased investment is free of charge and is used to automatically move money gradually from one group of funds to another over a defined period of time.
• Three options are available;
• Full option; move 100% of your nominated funds,
• Partial option; move a specific percentage of your nominated funds, or,
• Fixed amount option; move a specific monetary amount of your nominated funds.
• Frequency of phased investment can be monthly or every three months (quarterly).
• Timescale can be over a 6, 12, 24 or 36 month period.
• Once started, the frequency, timescale and funds chosen cannot be changed; to make any changes the existing phased investment must be cancelled and a new one must be requested.
• Up to nine nominated funds to switch out of and up to nine selected funds to switch into can be chosen, but the combined number of funds must not be more than 10.
Certain events will cause the phased investment service to automatically be stopped. Please see the policy provisions for details of these events.
Withdrawals/Surrenders
- Regular withdrawals
• There are no charges for regular withdrawals.
• After each withdrawal the remaining total Bond value must be the higher of £250 or twice the value of any outstanding establishment charges.
• Regular withdrawals can be taken yearly, half yearly, quarterly, monthly and termly (ideal for school fees planning). The minimum regular withdrawal is £250 per annum. The maximum regular withdrawal is 10% p.a. of the premium.
• Regular withdrawals can either be apportioned across all funds equally or targeted at up to 5 specific funds. Where withdrawals have been elected from a particular fund they will cease once the units of that fund have been exhausted.
• The amount, frequency and start date of regular withdrawals can be specified subject to the limits mentioned above.
- Partial surrenders
• There is no maximum partial surrender amount but the remaining total Bond value must be the higher of £250 or twice the value of any outstanding establishment charges.
• There are no charges for partial surrenders.
• Partial surrender requests can be apportioned across all funds equally or targeted at up to 5 specific funds.
• The minimum partial surrender is £250.
• For partial surrenders to be paid a request for payment form or letter signed by the current policyholders must be submitted. If the bond is in trust then all trustees must sign.
- Full surrender
• The investment can be surrendered in full at any time. If this occurs within the first five years from the date of the investment we will deduct any outstanding establishment charges.
• If the original investment or top up is surrendered in full then all the establishment charges relating to that investment or top up will be deducted. For a full surrender to be paid a request for payment form or letter signed by the current policyholders must be submitted. If the bond is in trust then all trustees must sign.
Death benefit
• The amount payable is 100.1% of the value of the units at the next valuation date following notification of the death to us.
• However, if the life assured (single life) or the younger life (last death) has attained the age of 71 years on or before the start of the Bond; then on the death of the life assured (single life) or the last to die (last death), we shall pay an amount equal to 100.1% of the surrender value. The surrender value is the value of units less any outstanding establishment charges to be collected. The same applies with a joint life first death where the older life has attained the age of 71 on or before the start of the bond.
Commission
- Initial commission
Initial commission can be varied between 0% and 7% in increments of 0.1% and 0.25%.
- Trail commission
In addition to any initial commission you may also select a fund based trail commission from 0% to 1% p.a. paid for by unit deduction in increments of 0.25%. Trail commission can be stopped, started and varied at any time subject to client approval. Commission will be paid after the first month. This can be paid either monthly or weekly in arrears by BACS.
Reduction in yield
We offer a range of low cost funds that allow you to change your commission whilst still keeping a 1% reduction in yield. Please ask for more information.
Charges
- Initial charge
There is no initial charge.
Annual management charge
As shown in the introduction there are two charging structures.
The Level Option has an annual management charge of 0.35% p.a. from the start of each Bond and is linked to Canada Life’s series 4 life funds.
The Deferred Option has an annual management charge of 0% for the first 5 years with 1% p.a. thereafter and is linked to Canada Life’s series 3 life funds.
- Investment management charge
In addition to the annual management charge which is specific to the Bond there is an annual management charge which is levied on the fund(s). Charges vary depending on the fund chosen. We calculate this charge as a daily rate and make daily deductions from the units of the fund(s). For further details please see Life Funds – Risks and Charges (8318) available in the funds section of the library. All management charges are subject to regular review by Canada Life.
- Establishment charge
The basic establishment charge is the sum of:
• The allocation rate above 100%, the initial commission selected and a 0.5% Canada Life charge for our administration.
RDR-Friendly Option
A version is available with an initial allocation of 100%. The Canada Life administration charge of 0.5% is deducted from this. Allocation is reduced by any initial commission taken.
New business requirements
Please ensure that the following items are completed before submitting to Canada Life:
• Application form
• Cheque
• Personal example, which advises the funds, commission basis and if clusters have been selected
• Trust form, if applicable
• Money Laundering Certificate(s) and certified copies of evidence.
Money laundering certificates are required for all policyholders, trustees, attorneys and cheque payees. If lives assured are minors then evidence is required to prove their existence: original birth certificate or certified copy of their passport or verification certificate.
Account cheque drawn from
|
Action to be taken
|
Building society cheque or Banker’s draft
|
Need to verify the source of the money. These are not acceptable unless they are submitted with supporting evidence such as certified copies of bank statements that clearly show the client has an account at the bank/building society as appropriate or letter from the bank/building society confirming the withdrawal.
|
Solicitor’s cheques
|
We require a letter on headed paper from the solicitors confirming where the original amount came from or certified copy of the client’s original cheque.
|
Other accounts
|
Money Laundering Certificate plus request a certified copy of the bank statement that matches the name of the company the money is coming from where the client has an account or a signed letter from the bank/building society explaining the source of the money.
|
Power of Attorney
|
Either original copy of Power of Attorney or copy certified by solicitor (photocopies not accepted).
|
Cheque drawn from the appointed Power of Attorney’s personal bank account
|
Request for Money Laundering Certificate(s) from the person (people) name on the cheque (appointed Power of Attorneys(s)).
|
Please note that past performance is not a guide for the future. The value of units can fall as well as rise and currency fluctuations may also affect performance.
|
