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Administration details
Type of policy
The Select Investment Bond is a unit-linked whole of life non-qualifying life assurance policy issued by Canada Life Limited.
Life assured
It can be written on either a single life or joint life (first or second death) basis. Maximum of 4 lives assured, all from same family group. 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 investment
Minimum Premium is £5,000. There is no maximum premium.
Additional amounts may be added to the product at any time, subject to a minimum of £2,500. This will be as a new policy.
Clustering
The policy can be divided into any number of identical clusters up to a maximum of 999. Each cluster must have a minimum of £1,000 invested. Please select this when returning the Personal Illustration.
Allocation rate
The allocation rate applied to all standard SIB policies will be 100% at the bid price. This can be enhanced using the Flexible SIB. See below under ‘Commission Rates’.
Loyalty bonus
On the 5th anniversary and every consecutive 5th anniversary a loyalty bonus of 0.8% of the fund value at the time will be added.
Charging structure
Establishment fee plus annual management charge plus investment management fees. See ’Charges’ and ’Commission Rates’ below.
Funds
The funds available are life series 4.
Funds per policy
There is a maximum of 10 funds at any one time, per policy. The allocation for a cluster has to be identical to the policy.
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.
Income withdrawals
• Automatic income withdrawals can be selected, subject to a minimum payment of £250 p.a.
• Available frequencies are monthly, quarterly, half yearly, annually and termly.
• A maximum of 10% of the fund value can be withdrawn as a regular income withdrawal.
• At no point can income withdrawals be taken if the remaining fund is less than the outstanding establishment fee.
Surrenders
Partial surrender
The requirements on partial surrender are:
At all times, a minimum balance of £250 needs to be maintained in each policy.
Within the first five years, an amount equal to twice the balance of establishment charges still to be deducted must remain in the policy. For a partial surrender to be paid a Request for Payment Form or letter signed by all policyholders, including trustees must be submitted.
Surrender values
The surrender value will be the value of units allocated to the policy less any outstanding establishment charges.
For a full surrender the following must be submitted:
1. The policy specifications
2. A Request for Payment Form or letter signed by all policyholders, including trustees.
Death benefit
This will depend on how the policy has been arranged and the age of the life or lives assured at the commencement of the policy.
- Single and last life survivor policies
If at least one life assured is under the age of 80 at the date of commencement the following will apply:
On death, 101% of the value of the units remaining will be payable, valued at the next valuation date of the funds following receipt of written notification of death. If death occurs during the first 60 months no outstanding establishment charges will be deducted.
If none of the lives assured are aged 80 or under at the date of commencement the following will apply:
On death, 101% of the surrender value of the policy will be payable, valued at the next valuation date of the funds following receipt of written notification of death. The surrender value is the value of units less any outstanding establishment fees yet to be collected.
Once the establishment fees have been collected the full value of units will be paid.
- Joint life first death policies
In the case of joint life first death policies, where one of the lives assured is aged 80 or over at the date of commencement, then 101% of the surrender value will apply in the event of death.
Commission rates
The range of commission available is fully flexible.
- Initial commission
Initial commission is up to 7%. Commission can be taken in increments of 0.1% e.g. 5.1% or 0.25% increments e.g. 5.25%.
- 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 monthly unit deduction.
- Simplified charges for fee paying advisers
As an alternative to taking 0% commission under the establishment fee charging structure, you can opt to have the charges paid up-front as a one-off fee. If this option is chosen we will simply deduct 1% from the premium and apply a 99% unit allocation rate. No Establishment Fee will be levied.
- Flexible commission option
Under this option, you can give up some initial commission, and offer your client an increase in the allocation rate instead of a reduction in establishment charges. As long as the sum of the two is less than (or equal to) 7%.
Charges
- Initial charge
There is no initial charge.
- Establishment fee
The establishment fee will be charged monthly in advance, by unit deduction, over 60 months. The level of the charge is determined by the level of the commission taken and the level of investment.
- Annual management charge (AMC)
The annual management charge in the product is 0.35%. In addition there is an investment management fee which is dependent on the fund(s) chosen.
- Investment management charge
In addition to the AMC, a charge is payable to the investment manager. This will vary depending on the fund(s) selected. 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.
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.
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.
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