KEY FEATURES OF THE METLIFE INVESTMENT BOND PORTFOLIO ENTER A MORE CERTAIN WORLD

Transcription

1 KEY FEATURES OF THE METLIFE INVESTMENT BOND PORTFOLIO ENTER A MORE CERTAIN WORLD Investment Bond Portfolio

2 Contents 1 Key Features of the MetLife Investment Bond Portfolio 2 2 Guarantee Options 6 3 Other Investment Options 15 4 Product Charges 17 5 Adviser Charges 18 6 Further Information 19 7 Glossary 21 About this Key Features Document This Key Features Document aims to give you a summary of important information you should know about the MetLife Investment Bond Portfolio. For further information you should also read the Investment Bond Portfolio Terms and Conditions. If you do not have a copy, you can obtain one from your Financial Adviser or by contacting us directly. The Financial Conduct Authority is the independent financial services regulator. It requires MetLife to give you this important information to help you to decide whether the MetLife Investment Bond Portfolio is right for you. You should read this document and your personalised illustration carefully to ensure you understand what the product is, how it works and what the risks are. We recommend you keep both documents safe for future reference. A glossary of terms is included at the back of this document for your reference and the terms are capitalised throughout the document for ease. Please note the term income throughout this Key Features Document refers to withdrawals of capital. 1

3 1 Key Features of the MetLife Investment Bond Portfolio What is the MetLife Investment Bond Portfolio? The MetLife Investment Bond Portfolio is a single premium, unit-linked, whole of life insurance bond. You can choose from a range of risk-rated investments, enabling you to build a tailored investment, structured around your personal circumstances and your future financial needs. The MetLife Investment Bond Portfolio also allows you to protect your investment with one of MetLife s guarantee options, which can provide you with the certainty of a guaranteed capital amount (Secure Capital Option), a guaranteed income for life (Secure Income Option), or alternatively a level of investment protection. Its aims To allow you to: increase the value of your investment over the medium to long term choose, with the help of your Financial Adviser, a portfolio to match your investment objectives and risk appetite assist you with your estate planning through a trust arrangement, if required provide you with an investment that is flexible enough to meet your needs invest your savings in a tax-efficient way provide the certainty of a guaranteed income for life through the Secure Income Option from age 55 or later provide the certainty of a guaranteed capital amount through the Secure Capital Option provide for your beneficiaries on your death change your mind at any time. Your commitment Invest at least 10,000. Review your investment regularly with your Financial Adviser to ensure it continues to meet your needs. View your bond as a medium to long-term investment. Let us know if you become resident outside the UK for tax purposes. Ensure that you understand the risks and charges associated with your chosen bond. Risks The risk associated with your investment will be dependent on your chosen investment option. You may receive less than the amount shown in your illustration or less than you paid in, because: - investment performance may be lower than shown in your illustration - you may have withdrawn more than the amount shown in your illustration - the tax rules that apply to your investment may change If you ask us to pay Adviser Charges from your Investment Bond Portfolio your investments will grow at a slower rate than if you had not. If you request these to be paid from Guaranteed Investments, the likelihood that the guaranteed benefits will increase through the lock-in of fund performance will reduce. The higher the level of Adviser Charges paid, the greater their impact. If you ask us to pay Ongoing Adviser Charges just from Protected Growth Funds or Non-Guaranteed Investments, you must maintain sufficient funds in these investments to allow us to make payments in this way. 2

4 If you become a resident or citizen of another country, you may be required to pay more or less tax on this investment. If you surrender some or all of your plan early, you may get back less than you invested. In exceptional circumstances we may have to delay making a payment to you, or carrying out an instruction from you to switch your money between funds. This could be due to adverse market conditions or where it would lead to the unfair treatment of you or other policyholders. Following any delay, transactions will be carried out at the price applicable after the deferred period which will mean that the price will be different from the price when you first instructed us. The guarantees provided by the Investment Bond Portfolio are provided by MetLife Europe Limited. If MetLife Europe Limited were to fail, your investment in the Plan and the guarantee element of this Plan could be lost. However, you could be entitled to compensation under the UK Financial Services Compensation Scheme, depending on the circumstances of your claim. Please see the Compensation section on page 19 of this document for more information on the compensation available. Risks specific to withdrawing income If you take an income from your plan, this will reduce your fund value. Unless you select the Secure Income Option, the level of income you can withdraw is not guaranteed and the overall amount you are able to take will depend on the value and performance of the investments you hold in your plan. If you are receiving a guaranteed income under the Secure Income Option but you are not the Secure Income life assured, your guaranteed income would cease if the Secure Income life assured were to die before you. Please speak to your Financial Adviser for further information and clarification. If your investments perform poorly or you take too much income, your income may run out if you do not adjust the level of income you take. There is no guarantee that your income payments will keep pace with Inflation. Questions and answers on the MetLife Investment Bond Portfolio Can I apply for the Investment Bond Portfolio? You can apply for the Investment Bond Portfolio if you are a UK resident and aged over 18 or a UK-resident private limited company. Maximum age restrictions apply for certain investment options and lives assured. US residents and US citizens are not eligible to apply. Further information is detailed in later sections. How much can I pay in? The minimum amount required to establish a bond is 10,000. The minimum additional payment to an existing plan is 1,000. Additional payments (top-ups) can be made at any time but will be subject to the charges or investment choices applicable at the time. The maximum you can currently pay into Guaranteed Investments across all MetLife policies is 1,500,000. If you wish to exceed this limit please contact MetLife. Investments can be accepted in Sterling only. We reserve the right to not accept top-ups in the future. What might I get from my MetLife Investment Bond Portfolio? Please see your illustration to get an indication of what you might receive. The actual amount you receive may be higher or lower than this and will be determined by a number of factors, including: the amount you have invested 3

5 how long it has been invested for the investment performance of your selected investment funds whether you have selected the Secure Income Option, Secure Capital Option or the Protected Growth Funds the product charges any payments you ask us to make to your Financial Adviser any withdrawals you have taken whether you make any fund switches depending upon your personal circumstances, any tax you may need to pay. Can I take money out of the MetLife Investment Bond Portfolio? You can take regular withdrawals or a one-off withdrawal from the Investment Bond Portfolio at any time. There is no limit on the amount that can be withdrawn. Regular withdrawals can be made monthly, quarterly, termly (every four months), half-yearly or annually. Any withdrawals will reduce your fund value by the amount withdrawn. If you select the Secure Income Option or Secure Capital Option, withdrawals may affect your guaranteed amount and ability to select the same guarantee in the future. Further information on this can be found in the relevant sections in this document. Regular withdrawals are permitted subject to a minimum of 100. There may be a tax implication if you make a withdrawal. Unless you are making guaranteed withdrawals, you must leave at least 5,000 in the plan or 1,000 in each fund. How flexible is the bond? Each bond is divided into 1,000 identical policies. This can help you manage your investment more tax-efficiently. You can make top-ups into your bond, subject to a minimum payment of 1,000. Top-ups can be made at any time but are subject to the charges, investment choices and conditions applicable at that time. We reserve the right to not accept topups in the future. You may switch between different portfolios and the cash fund at any time. We normally do not charge for switches but reserve the right to make a charge if more than 12 are made during a calendar year. There are restrictions on switching between the guarantee options, these are set out in the Secure Income Option and Secure Capital Option sections later in this document. What is the Tax Maximiser Option? The MetLife Secure Capital and Secure Income Option incorporate the Tax Maximiser Option. If your investment has increased in value, the Tax Maximiser Option allows you to surrender, or rebase your bond and re-invest within the same guarantee. By doing this you can take tax-deferred withdrawals from a potentially larger investment. The Tax Maximiser Option may be exercised only once in the lifetime of a bond and not within the first five years. It can only be exercised on a policy anniversary, providing you give at least 30 days' notice. Your secure withdrawals can increase when exercising this option. You should seek tax advice before exercising this option as it will lead to a chargeable event which could mean you have to pay tax as a result. The potential tax benefits of this option do not apply where the policyholder is a company. 4

6 What benefits are paid when the life assured dies? A benefit is payable in the event of the death of the life assured. Where there are two lives assured the benefit may be payable on the first death or the second death depending on what option was selected at outset. Where there are more than two lives assured, the benefit will be payable on the last of the lives assured to die. Unless the death benefit is enhanced by the Secure Capital or Secure Income Option, it will be 100.1% of the fund value. Further details on the death benefit can be found later in this document. How will I know how my MetLife Investment Bond Portfolio is doing? We will send you a statement each year showing you how your MetLife Investment Bond Portfolio is performing. You can also request a statement at any time by contacting us. Can I pay my Financial Adviser from my MetLife Investment Bond Portfolio? Yes you can. For the options available please refer to the 'Adviser Charges' section later in this document. Can I change my mind? You can change your mind within 30 days of receiving the cancellation notice that will be issued to you when your application for your bond is accepted. If your premium has been invested and the fund value has fallen, the amount refunded to you will be less than your original investment. If you have asked us to make payments to your Financial Adviser, any amounts paid prior to cancellation will not be returned to you by us. You may, however, be able to recover some or all of these amounts directly from your Financial Adviser. What about tax? It is your responsibility to obtain advice from your Financial Adviser or applicable Tax Authority on the taxation implications of owning the bond, including how you may be taxed should you move overseas. When choosing the International version, a tax liability may arise if you change your country of residence. We may make a deduction from your bond in order to pay this tax where we are legally obliged to do so. Please remember that the tax rules relating to your bond may change in the future which could affect the returns you receive from your investment or the charges MetLife makes on your investment. Income tax for individuals and trustees: If a death claim occurs, or one or more of the policies are fully surrendered a tax liability may arise if an investment gain has been made. You may take tax-deferred withdrawals of up to 5% p.a (for up to 20 years) of the premium by surrendering a part of individual policies. Amounts withdrawn in this way (including Adviser Charges) which are greater than 5% of the premium may be taxable. Where the bond is owned by trustees, a number of factors will determine who is liable for any income tax charge. Corporation tax for limited companies: The taxation of company-owned investment bonds is different from that of individuals and trustees. The 5% tax-deferred withdrawal facility does not apply where a company owns the bond. Companies may be subject to corporation tax on the policy in accordance with the loan relationship rules. For any questions regarding taxation and the impact of this investment on your personal circumstances, you should consult your Financial Adviser. 5

7 2 Guarantee Options The Secure Income Option - a secure income now or in the future If you re looking for a secure income, our Secure Income Option guarantees you an income for life, regardless of market fluctuations. You can choose to take an immediate income, or defer this until a later date and benefit from MetLife s Income Deferral Increases. Aims The Secure Income Option aims to provide you with: a guaranteed income for life from age 55 or later the potential to increase your income by locking in any increase to your Secure Income Base each day the opportunity to delay taking income and benefit from daily Income Deferral Increases the flexibility to start, stop and restart your income payments according to your needs the ability to provide for your beneficiaries upon your death. You may want to choose this option if you: are age 50 or over (or 55 if you want to take income immediately) want a guaranteed level of income you can rely on now or in the future want the ability to access your investment flexibly now or in the future, and vary the level of income you take You may not want to choose the Secure Income Option if you: do not want the ability to access your investment flexibly now or in the future, or vary the level of income you take are unwilling to pay a charge for the benefits of an income guarantee that will impact the performance of your investment are not concerned about passing on a guaranteed amount in the event of your death are willing to take on higher levels of investment risk which are unavailable with this option to potentially obtain better returns and a higher level of income in the future. Risks The value of your investment is not guaranteed and may be worth less than the Secure Income Base which is used to calculate your guaranteed benefits. Once you start taking your guaranteed income it won t increase unless the growth in the fund exceeds the charges, the guaranteed income and any Payments Out you have asked us to make. If you choose to make Payments Out, including amounts in excess of your guaranteed income, from your Secure Income Investments, this will proportionately reduce your guaranteed income and benefits. want to be able to pass on a guaranteed amount of benefits on your death. 6

8 Questions and answers What is the Secure Income Option? The Secure Income Option is an option under the Investment Bond Portfolio which guarantees you an income for the rest of your life. In addition, the guaranteed amount has the potential to increase through: daily lock-ins of positive investment performance above the Secure Income Base (whether you defer your income or take it immediately) guaranteed daily Income Deferral Increases where you choose to delay some or all of your income. You can have the Secure Income Option on all or part of your investment. Can I choose the Secure Income Option? To select the Secure Income Option you have to invest at least 5,000. After that you can invest additional amounts of at least 1,000. You must be aged 50 or over to select the Secure Income Option, though you will not be able to take income until you reach age 55. The latest age at which you can select this option is 75. If the Secure Income Option is selected on a joint life basis, then the younger of the two lives must meet the age restrictions. How does the Secure Income Option work? When you invest in the Secure Income Option you can choose from different levels of maximum Growth Asset exposure. In general terms, if you choose a higher maximum exposure to the Growth Asset, your investment has more potential exposure to equity. However, it also means that the value of your underlying investment will be less stable and more variable than if you choose a lower maximum Growth Asset exposure. Your investment into the Secure Income Option, less any Initial Adviser Charge, is called your Secure Income Base. We calculate your guaranteed income using a percentage of your Secure Income Base, which depends on: your age (or age of the younger person if selecting joint life) when you select the option; and whether the income is based on a single life or joint lives. We call this percentage your Guaranteed Income Percentage. The Secure Income Option can be selected on a single or joint life basis. If joint life is chosen, the guaranteed income can be paid to the joint life on your death. Your Guaranteed Income Percentage and level of guaranteed income will be stated on your personalised illustration. For joint life, the Guaranteed Income Percentage is reduced and based on the younger of the two lives. Can I delay taking my income? Yes you can. If you delay taking your guaranteed income, MetLife guarantees to increase your Secure Income Base by a compound percentage each year. These increases are called Income Deferral Increases. The Income Deferral Increases will be applied on a daily basis to your current Secure Income Base. Is there a limit to how long I can defer taking my income? You can delay taking your guaranteed income for as long as you like. 7

9 What happens if I only want to take part of my income? If you decide to take less than the full amount of guaranteed income the Income Deferral Increase will still apply. For example if you decide to take 75% of the guaranteed income, you will receive 25% of the Income Deferral Increase. What is a Secure Income Review? Secure Income Reviews take place daily. At each review we compare the value of your investment with your Secure Income Base. Where the value of your investment is higher than your Secure Income Base, we will increase your Secure Income Base to the higher amount. Where the value of your investment is lower than your Secure Income Base, the Secure Income Base will remain the same unless you are delaying income and receive an Income Deferral Increase. How flexible is the Secure Income Option? The Secure Income Option is very flexible. You can take more than the guaranteed income but this will be treated as a Payment Out and will immediately reduce your guaranteed income proportionately. You should speak to your Financial Adviser for more information. You can switch your fund value out of the Secure Income Option at any time, however you will lose any guaranteed benefits associated with that Guaranteed Investment. You can switch back into the currently available Secure Income Option at any time. What happens if I die when I have the Secure Income Option? There is a Guaranteed Death Benefit included with this option. The value used to provide the death benefit is the higher of: initial Secure Income Base less guaranteed income taken (reduced by any Payments Out); and the value of your investment. Where the Secure Income Option is taken on a joint life basis the Guaranteed Death Benefit is available after the death of both lives. Until then guaranteed income is payable. What happens if my fund runs out when I am invested in the Secure Income Option? If the value of your investment runs out MetLife will continue to pay your guaranteed income for life. How will Payments Out affect my guaranteed benefits under the Secure Income Option? If you decide to take Payments Out from your investments in the Secure Income Option, the value of your investment and your guaranteed benefits will be proportionately reduced. What happens if I stop taking an income? If you stop taking an income your Income Deferral Increases will start to apply from the next guaranteed income due date. As an alternative, you can choose to change the investment choice within your investment without changing your Secure Income Base or guarantee terms. 8

10 Case studies How taking a Guaranteed Immediate Income works in practice Sophie is 65 years old and has 300,000 to invest. She would like to cut back her working hours but is not yet ready to retire fully. She is a cautious investor and a higher rate taxpayer. Having already used her tax-free cash from her pension, she is looking for alternative sources of income which would be tax-efficient until she fully retires. Her Financial Adviser recommends she invest in the Investment Bond Portfolio, Secure Income Option, taking immediate income which will be tax-deferred as long as she stays within her 5% annual allowance (which is cumulative). Sophie s Secure Income Base is 300,000 when she invests at age 65, and her Guaranteed Income Percentage at age 65 is 4.00%. Regardless of market fluctuations, as Sophie is not paying any Ongoing Adviser Charges, she would receive 12,000 per year. 300,000 x 4.00% = 12,000 p.a. Secure Income Base x Guaranteed Income Percentage = guaranteed income amount The fund will also benefit from daily lock-ins based on the value of her investment at each Secure Income Review. If at a Secure Income Review the investment has grown to 301,000 this may increase the Secure Income in the following payment. 301,000 x 4.00% = 12,040 p.a. Secure Income Base x Guaranteed Income Percentage = guaranteed income amount If Sophie had asked MetLife to pay Ongoing Adviser Charges, MetLife would do this by cancelling units across her investments. Sophie s Secure Income Base would reduce in proportion to the amount of each payment and her guaranteed benefits at that time would be based on this new Secure Income Base. 9

11 How taking a Guaranteed Future Income works in practice Jennifer is 60 years old and has saved a total of 100,000. She is currently still working, so has no immediate need for income. She would like to use this money for income in the future, but is not sure when this will be. Jennifer s Financial Adviser recommends that she invest into a MetLife Investment Bond Portfolio with the Secure Income Option and delays taking her guaranteed income until it is required. Jennifer s initial Secure Income Base is 100,000 when she invests at age 65, and her Guaranteed Income Percentage at age 65 is 4.00%. Jennifer will receive a 5% compound Income Deferral Increase applied daily for as long as she delays taking an income. This is demonstrated in the table below: Year Age Yearly Income Deferral Increase 5,000 5,250 5, , Cumulative Income Deferral Increase 5,000 10,250 15, , Secure Income Base 100, , , , Annual Guaranteed Income 4,000 4,200 4,410 4, This assumes no fund growth, no Adviser Charges and calculations are made annually. After delaying her income for three years, and assuming no Ongoing Adviser Charges are paid, Jennifer would receive an annual guaranteed income for life of 4, The guaranteed income for life is calculated by applying the 5% annual compound Income Deferral Increase daily to Jennifer s Secure Income Base. At age 65, if Jennifer decides to take her guaranteed income, her guaranteed income for life is calculated as follows: Secure Income Base x Guaranteed Income Percentage = guaranteed income for life ( 100,000 X 4.00% = 4,000) The income will be tax-deferred as long as she does not exceed her 5% cumulative annual allowance. If Jennifer had asked MetLife to pay Ongoing Adviser Charges, MetLife would do this by cancelling units across her investments. Jennifer s Secure Income Base would reduce in proportion to the amount of each payment and her guaranteed benefits at that time would be based on this Secure Income Base. 10

12 The Secure Capital Option - securing your capital with the potential for growth You can have greater certainty of the value of your investment fund with our capital guarantee, which gives you a guaranteed amount at the end of the selected term. We call this guarantee the Secure Capital Option. Aims The Secure Capital Option aims to provide you with: a guaranteed amount at the end of the term of no less than your Secure Capital Value the opportunity to increase your Secure Capital Value by locking in investment gains above the current Secure Capital Value on a daily basis the ability to provide for your beneficiaries upon your death. You may want to choose this option if you: want your investment to have the potential to grow through investment in the stock market, but are concerned about the potential losses you could incur through market falls are willing to invest for the medium to long term want the certainty of a guaranteed amount being available in the future, maybe to coincide with the start of your retirement or another date of importance to you do not need or intend to take an immediate income from this investment want to be able to pass on a guaranteed amount of benefits in the event of your death. You may not want to choose this option if you: want to invest in the stock market and are unconcerned about the potential losses you could incur through market falls want to invest for a term shorter than the minimum guarantee term available intend to take an immediate income or want a guaranteed level of income for life from your investment are not concerned about passing on a guaranteed amount in the event of your death do not want the additional charges associated with a guarantee to impact the performance of your investment are willing to take on higher levels of investment risk which are unavailable with this option in order to seek higher returns on your investments. Risks If you choose to make any Payments Out from your Secure Capital investments, this will proportionately reduce your guaranteed benefits. Although you can withdraw your investment fund at any time, the amount paid will be the value of your investment which can go down as well as up. You may not get back what you have paid in and this may be lower than your Secure Capital Value. 11

13 Questions and Answers What is the Secure Capital Option? The Secure Capital Option is an option under the Investment Bond Portfolio which guarantees the capital value of your investment at the end of the selected term. In addition, the guaranteed amount has the potential to increase through lock-ins of positive investment performance. You can have the Secure Capital Option on all or part of your fund. The maximum age for selecting the Secure Capital Option is 75 years. At the review we compare the value of your investment and your Secure Capital Value. Where the value of your investment is higher, we will increase your Secure Capital Value to this higher amount. Where the value of your investment is lower than your Secure Capital Value, then your Secure Capital Value remains the same. At the end of the term, the greater of the value of your investment in your Secure Capital Option and the Secure Capital Value is placed in a cash fund. You can then discuss what to do next with your Financial Adviser. Can I choose the Secure Capital Option? To select the Secure Capital Option you have to invest at least 5,000. The minimum additional investment amount is 5,000. Can I take any money out of the Secure Capital Option? Yes, you can. These are Payments Out and will proportionately reduce your Secure Capital Value. How does the Secure Capital Option work? When you invest in the Secure Capital Option you can currently choose from different levels of maximum Growth Asset exposure and capital guarantee terms. In general terms, if you choose a higher maximum exposure to the Growth Asset your investment has more potential exposure to equity. However, it also means that the value of your underlying investment will be less stable and more variable than if you choose a lower maximum Growth Asset exposure. Your investment in the Secure Capital Option, less any initial Adviser Charges, forms your guaranteed amount; we call this your Secure Capital Value. This is the minimum amount that you will have at the end of the term (less any Payments Out you request us to make). Your Secure Capital Value can increase through lockins at Secure Capital Reviews. Secure Capital Reviews occur daily. How flexible is the Secure Capital Option? You can switch the value of your investment out of the Secure Capital Option at any time, however you will lose any guaranteed benefits associated with that Guaranteed Investment. You can switch back into the currently available Secure Capital Option at any time which means you start a new term. What happens if the life assured dies? A benefit is payable in the event of the death of the life assured. Where there are two lives assured the benefit may be payable on the first death or the second death depending on what option was selected at outset. Where there are more than two lives assured, the benefit will be payable on the last of the lives assured to die. 12

14 There is a Guaranteed Death Benefit included with the Secure Capital Option. The value used to provide the death benefit is the higher of: the Secure Capital Value; and the value of your investment. How will Payments Out affect my guaranteed benefits under the Secure Capital Option? If you decided to take Payments Out from your investments in the Secure Capital Option, the value of your investment will reduce and your guaranteed benefits will be reduced proportionately. Case study How the Secure Capital Option works in practice James and Gemma are married and in their 40s with twins, Peter and Ben, aged three. They have inherited 150,000 and would like to use 35,000 of this for home improvements and invest the rest to help pay for their children s further education. They are both cautious investors and would like some security on their investment, whilst having the potential to achieve investment growth. Their Financial Adviser recommends they invest the remaining 115,000 in the Secure Capital Option, with a Secure Capital term of 15 years which they select at outset. They can make tax-deferred withdrawals from their bond if this is a requirement during the term, up to 5% p.a. cumulative of the original investment amount, or leave it invested to support the boys further education. James and Gemma s Secure Capital Value is 115,000. This will be the minimum amount they will receive at the end of their selected term of 15 years. The fund also benefits from daily lock-ins on the value of their investment at each Secure Capital Review. Therefore, the amount James and Gemma receive at the end of their term would be 162,100: Initial investment: 115,000 Secure Capital Value at start of term: 115,000 Secure Capital Value at end of term: 162,100 If James and Gemma had required a tax-deferred withdrawal, the effect of this would be a proportionate reduction to their fund and Secure Capital Value at the time. If they had asked MetLife to pay Ongoing Adviser Charges or other Payments Out, MetLife would do this by cancelling units across their investments. James and Gemma s Secure Capital Value would reduce in proportion to the amount of each payment and their guaranteed benefits at that time would be based on this new Secure Capital Value. How will my money in the guarantee options be invested? To access the Secure Income Option and Secure Capital Option you invest through MetLife s Active Asset Allocation. Active Asset Allocation invests in a blend of a Growth Asset and a Secure Asset personalised to you. About the Growth Asset Your investment in the Growth Asset will be in the MetLife BlackRock Global Growth Fund, which aims to: provide an exposure to global equity markets manage the effect of market fluctuations provide the potential for growth which can lead to an increase in your guaranteed benefits. For more information on the Growth Asset please speak to your Financial Adviser. At the end of 15 years the Secure Capital Value has grown to 162,

15 About the Secure Asset Your investment in the Secure Asset will be in a range of MetLife Fidelity Corporate Bond Funds, which aim to: provide access to a portfolio of corporate bonds which benefit from active management provide more security that your underlying investments are less likely to fall but less potential to grow than the Growth Asset. For more information on the Secure Asset please speak to your Financial Adviser. About Active Asset Allocation Active Asset Allocation provides the opportunity for your investment to grow, while controlling the risk that your underlying investment may reduce in value. Once your investment is significantly invested in the Secure Asset, it is unlikely that Active Asset Allocation will switch your investment back to the Growth Asset. This is to be expected and is in line with how Active Asset Allocation works. We will let you know when this happens to give you the opportunity to consider whether your investment choice continues to be right for you. It will always be possible for you to switch the value of your investment into a currently available investment choice if you feel that better meets your needs at the time. Your Financial Adviser will be able to provide you with help and information on this. Active Asset Allocation moves your investment between the Growth Asset and Secure Asset over time. This movement is broadly based on: the value of your fund the value of your future guaranteed benefits. As the value of your fund and the value of your future guaranteed benefits are unique to your investment, you will have a personalised asset allocation over time. It is possible that your exposure to the Growth Asset could be maintained as a result of strong market performance during the lifetime of your investment. However, in order to control the risk of your underlying investment falling in value, Active Asset Allocation will tend to switch your investment into the Secure Asset over time. 14

16 3 Other Investment Options In addition to the guarantee options detailed in section 2, you can choose from a range of available investments to hold within your MetLife Investment Bond Portfolio, enabling you to build a tailored pension plan, structured around your personal circumstances and your future financial needs. Broadly you can choose from the following investment options: MetLife Protected Growth Funds, offering a level of investment protection, for investments without the Secure Income Option or Secure Capital Option a range of Non-Guaranteed Investments including index and managed portfolios, managed wealth portfolios and a cash fund, for investments without the Secure Income Option or Secure Capital Option. You can find out more about the investment options in the 'MetLife Fund List' available from your Financial Adviser. Protected Growth Funds What are the Protected Growth Funds? MetLife Protected Growth Funds are a range of portfolios that allow you to benefit from investing in equities whilst also providing you with a level of protection against market falls. Depending upon the level of protection selected, the Protected Growth Funds guarantee that your unit price will not fall below 70%, 80% or 90% of the fund s highest ever unit price. Can I choose the Protected Growth Funds? You can invest in the Protected Growth Funds if you are a UK resident aged 18 or over. Maximum age is 90 years at the time the investment is made. Whilst maximum age restrictions apply under the Investment Bond Portfolio, MetLife can review this on an individual case basis. How flexible is my investment in the Protected Growth Funds? You can make withdrawals from your investment at any time. You can make additional payments into your investment, subject to a minimum payment of 1,000. Additional payments can be made at any time but are subject to the charges, investment choices and conditions applicable at that time. You may switch between different investments at any time. What happens if I die when invested in the Protected Growth Funds? The death benefit payable will be the fund value. For more information on the Protected Growth Funds please see the 'MetLife Fund List' available from your Financial Adviser. 15

17 Range of Non-Guaranteed Investments What are Non-Guaranteed Investments? Non-Guaranteed Investments are investments made without the Secure Income Option or Secure Capital Option. These investments include the MetLife Managed Wealth Portfolios, index portfolios, managed portfolios and a cash fund. What happens if I die when invested in Non- Guaranteed Investments? The death benefit payable will be the fund value. For more information on Non-Guaranteed Investments please see the 'MetLife Fund List' available from your Financial Adviser. How flexible is my investment in Non- Guaranteed Investments? You can make withdrawals from your investment at any time. You can make additional payments into your investment, subject to a minimum payment of 1,000. Additional payments can be made at any time but are subject to the charges, investment choices and conditions applicable at that time. We reserve the right to not accept top-ups in the future. You may switch between different investments at any time. We normally do not charge for switches, but reserve the right to make a charge if more than 12 are made during a calendar year. 16

18 4 Product Charges What are the product charges? These are charges for the administration and management of your investment, as well as specific charges if you choose to invest in MetLife s Guaranteed Investments or Protected Growth Funds. Annual management charge - This is applied by us for managing your policy and a percentage is deducted monthly by cancelling units in your policy. The level of charge will depend upon the value of your investment at the time the charge is taken. Where can I find details of my product charges? Your illustration shows you the product charges that apply to your policy, as well as an indication of the impact that these charges may have. You can also find further information on product charges in the 'Charges Booklet', available from your Financial Adviser. Fund charges - Each fund in which you invest carries a fund manager s charge. This charge is in respect of buying, selling, owning and ongoing maintenance of the investment assets and will be applied by reducing the price of each unit in the investment fund. Guarantee charge (Secure Income Option and Secure Capital Option) - This is similar to an insurance premium and covers the cost of MetLife providing you with the Secure Income or Capital Option. This charge is taken monthly by cancelling units in your policy. If you have the Secure Capital Option, the guarantee charge is based on the Secure Capital Value. If you have the Secure Income Option the guarantee charge is based on the Secure Income Base. Protection charge (Protected Growth Funds) - This is similar to an insurance premium and covers the cost of MetLife providing your chosen level of investment protection. This charge is included in the unit price and only applies to the Protected Growth Funds. 17

19 5 Adviser Charges What are Adviser Charges? These are payments that you agree to make to your Financial Adviser for advice or services provided to you. How can I pay Adviser Charges? You can choose to pay your Financial Adviser directly or you can ask MetLife to make these payments on your behalf. If you ask us to make these payments, we will do so by cancelling units from your policy. What Adviser Charges can be paid from my policy? Here are some examples of charging methods you could choose. The decision will be reached between you and your Financial Adviser. MetLife can facilitate the charges if you want us to. a. Initial Adviser Charge - This is a payment made to your Financial Adviser at the start of your policy and will be deducted from the funds you provide before they are invested. b. Ad hoc Adviser Charge - This is a one-off payment that can be made to your Financial Adviser at any time during the lifetime of your policy and will be deducted proportionately from all your funds. c. Ongoing Adviser Charge - This is a regular payment to your Financial Adviser on a monthly, quarterly, termly (every four months), half yearly or yearly basis. You can choose how you want us to pay Ongoing Adviser Charges, as shown below. You may cancel or vary the level of these payments at any time in the future. We will not reclaim any payments you have asked us to pay to your Financial Adviser on your behalf. What payment options are available if I choose to pay Ongoing Adviser Charges from my policy? There are two options for providing the Ongoing Adviser Charge: a. across all your investments (including Guaranteed Investments); or b. across all your investments (excluding Guaranteed Investments). If you select option (a), and you only have guaranteed benefits, the payment of the ongoing charge from the policy will reduce the guaranteed benefits. If you select option (b), payments to your Financial Adviser will not reduce your guaranteed benefits, provided you have enough money in your Protected Growth Funds and Non-Guaranteed Investments. Where there are insufficient units, and in the absence of any other instructions, we will make up any shortfall from your Guaranteed Investments. This will mean your guaranteed benefits will be proportionately reduced. If you would like us to continue paying Ongoing Adviser Charges from your Protected Growth Funds and Non-Guaranteed Investments, you can make additional contributions or switch funds from your Guaranteed Investments. How will the payment of Adviser Charges affect my policy? As some of the payments to your Financial Adviser (Payments Out) are funded through cancelling units from your policy, this will reduce the value of your investment. Where these payments are taken from Guaranteed Investments they will reduce your guaranteed benefits in proportion to each amount paid. MetLife reserves the right not to pay an Adviser Charge if it considers that the payment requested would cause the product that you are invested in to no longer perform in accordance with its design. Where can I find details of my Adviser Charges? Please see your illustration for more details on Adviser Charges and an indication of the possible impact these payments could have on your investment return. 18

20 5 Further Information Terms and Conditions This Key Features Document aims to give you a summary of important information you should know about the MetLife Investment Bond Portfolio. For further information you should also read the Investment Bond Portfolio Terms and Conditions. If you do not have a copy, you can obtain one from your Financial Adviser or by contacting us directly. Complaints If you have a complaint about your Investment Bond or wish to receive a copy of our complaints procedure, please contact: MetLife Europe Limited Beacon House, 27 Clarendon Road, Belfast BT1 3BG Tel: If you are not satisfied with the response to your complaint in respect of your Investment Bond, you can contact the: Financial Ombudsman Service (FOS) Exchange Tower, London E14 9SR Freephone numbers are if calling from a fixed line, or from a mobile phone if you pay a monthly charge for calls to numbers starting with 01 or 02. The switchboard number is Making a complaint will not affect your legal rights. Taxation Information contained in this document is based on MetLife s understanding of taxation, legislation and HM Revenue & Customs practice, as at September 2015, all of which may change in the future with or without notice. Governing Law The Investment Bond Portfolio Terms and Conditions are governed by the Law of England & Wales. We will communicate in English throughout the course of this contract. Compensation Your Investment Bond Portfolio is covered by the Financial Services Compensation Scheme (FSCS). As such, if we cannot meet our obligations, you may be entitled to compensation from the scheme. This will depend upon your eligibility, the type of business and the circumstances of the claim. The maximum level of compensation for claims against firms declared in default is 100% of the claim with no upper limit. You can obtain further information on this matter from the FSCS. Financial Services Compensation Scheme 7th Floor, Lloyd Chambers 1 Portsoken Street, London E1 8BN Tel:

21 About MetLife Europe Limited The MetLife Investment Bond Portfolio and the guarantees referred to in this document are provided by the UK branch of MetLife Europe Limited, an Irish Company authorised by the Central Bank of Ireland. MetLife Europe Limited provides a range of long-term savings and retirement products to help investors build financial freedom for their future. The products combine optional guarantee features with a range of investment options drawn from leading investment managers and advisers. MetLife Europe Limited, trading as MetLife, is an affiliate of MetLife, Inc. and has been operating under the MetLife brand in the UK since To view our latest financial strength ratings, please visit the `About MetLife section at: Services are delivered from MetLife Europe Limited s head office in Ireland, and from offices in the UK. For more information about MetLife Europe Limited, please visit our website at: How to contact us Your Financial Adviser will normally be your first point of contact for any questions you have. If you would like to make any changes to your Investment Bond, you can: Call us on between the hours of 9am and 5pm Monday to Friday. Please note that calls may be recorded or monitored for training and security purposes. us at customerservice@metlife.co.uk Write to us at: MetLife Customer Service Centre Beacon House, 27 Clarendon Road Belfast BT1 3BG Whenever you contact us, you will need to quote your policy details. 20

22 6 Glossary This is a glossary of key terms included in your personalised illustration and Key Features Document; for a full list of defined terms please refer to the General Terms and Conditions. Active Asset Allocation is the process that MetLife uses to allocate each individual customer s investment between the Growth Asset and Secure Asset within the upper limit that the customer has chosen. Adviser Charges means the money that you ask us to pay from your policy to your Financial Adviser for their advice and services provided to you. More information can be found in the 'Adviser Charges section. Growth Asset is a fund that provides stock market exposure through equity investments, only available through MetLife s Active Asset Allocation. Guaranteed Death Benefit provides your beneficiaries with a monetary benefit upon your death. Guaranteed Future Income the guaranteed income available to you in the future at the date you choose to take your benefits. Guaranteed Immediate Income the guaranteed income payable if you choose to start taking an income straightaway. Guaranteed Investments investments included with the Secure Income and Secure Capital Options. Income Deferral Increases are guaranteed increases to the Secure Income Base when you choose to delay taking all or part of your income. Inflation represents the rate at which the cost of living changes over time. Non-Guaranteed Investments funds which cannot be used to access the Secure Income and Secure Capital Options. Payments Out are any payments made from your Guaranteed Investments including: income withdrawals that exceed your annual guaranteed income; income withdrawals from your Secure Capital Investments; switches out; Ad hoc Adviser Charges and / or Ongoing Adviser Charges. All Payments Out will proportionately reduce your guaranteed benefits. Protected Growth Funds provide the option of protecting 70%, 80% or 90% of your fund s highest ever unit price. More information can be found in the 'Protected Growth Funds' section. Guaranteed Income Percentage the rate that is applied to your Secure Income Base to calculate the guaranteed income payable. 21

23 Secure Asset provides access to a portfolio of corporate bonds which benefit from active management. Secure Capital Option provides a guaranteed amount at the end of the term, of no less than your Secure Capital Value. Secure Capital Review is where we review the performance of your fund on a daily basis. Where the value of your investment is higher than your Secure Capital Value, we will lock it in and increase your Secure Capital Value to this amount. Secure Income Investments means the part of your policy that your Secure Income Option applies to. Secure Income Option provides a guaranteed income for life from age 55 or later. Secure Income Review is where we review the performance of your fund on a daily basis. Where the value of your investment is higher than your Secure Income Base, we will lock it in and increase your Secure Income Base to this amount. Secure Capital Value means the amount that we guarantee your Secure Capital Investment will be worth at the end of the term that you have specified. Secure Income Base is the amount used to calculate your guaranteed income. 22