Key Features of the MetLife Income for Life Bond (UK and International)

Transcription

1 Key Features of the MetLife Income for Life Bond (UK and International)

2 1 Key Features of the MetLife Income for Life Bond (UK and International) Key Features of the MetLife Income for Life Bond (UK and International) Unless stated otherwise, everything within this document relates to both the MetLife Income for Life Bond UK and International versions. The Financial Services Authority is the independent financial services regulator. It requires us, MetLife, to give you this important information to help you to decide whether the MetLife Income for Life Bond is right for you. You should read this document carefully so that you understand what you are buying, how it works and what the risks are. We recommend you keep both documents safe for future reference. Its aims To allow you to choose, with the help of your Financial Adviser, a portfolio to match your investment objectives. To provide you, through the Secure Income Option: - with a guaranteed minimum income for life from age 55 or later; - with the potential to increase this by locking-in investment gains annually; and - with a 4.25% deferral bonus for each full year you defer taking income. To assist you with your Estate Planning through a Trust arrangement, if required. To provide you with investment flexibility. Your commitment To invest at least 10,000. To review your investment regularly with your Financial Adviser. To view your bond as a medium to long-term investment. To let us know if you become a resident outside the UK for tax purposes. To ensure that you understand the risks and charges associated with this product. Please note that the term income throughout this brochure refers to withdrawals of capital.

3 Key Features of the MetLife Income for Life Bond (UK and International) 2 Risk factors If you choose to take a secure option under your bond, your investment will be guaranteed by MetLife Europe Limited. If a guarantee is not selected, the returns from your investment are not guaranteed and you could get back less than you originally invested. You may get back 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lower than shown in your illustration; - our charges may be higher than shown in your illustration; and - you may have withdrawn more than the amount shown in your illustration. - the tax rules that apply to your investment may change. If you are receiving a guaranteed income from the Income for Life Bond, but are not the life assured, your income would cease if the life assured were to die before you. Please speak to your Financial Adviser for further clarification and explanation. If the tax rules that apply to your investment change or you become a resident or citizen of another country, you may be required to pay more or less tax. Please read the What about tax? section in this document for more information. If you cancel your bond within 30 days you may get back less than you ve paid in. See Can I change my mind? section for further details. If you invest in a fund that holds property (or where because of circumstances outside our control we cannot readily sell assets held by one of the funds), we may have to delay requests to cash in relevant investments. The value of property is generally a matter of the valuer s opinion rather than fact. The risk associated with your investment will be dependent on the portfolio you choose. If you cash in some or all of your bond early, you may get back less than you invested. If you withdraw more than your guaranteed income from the plan, this will affect: - future guaranteed income payments; and - any future death benefits payable. Once you start taking your guaranteed income it will only increase once the growth in the fund exceeds the charges, any payments you ask us to make to your Financial Adviser and any withdrawals that have been taken from your fund. There is no guarantee that your income payments will keep pace with inflation. Withdrawals (partial surrenders) of up to 5% p.a. for 20 years taken from the original investment are a withdrawal of capital and tax-deferred. Amounts taken (including Adviser Charges) which are greater than 5% p.a. of the initial investment over 20 years may be taxed. If you select to make payments of Adviser Charges from your MetLife Income for Life Bond your fund will grow at a slower rate than if you had not. As you will be paying an additional charge for the Secure Income Option your fund will grow at a slower rate than if you had invested in the same product without the guarantee.

4 3 Key Features of the MetLife Income for Life Bond (UK and International) Questions and answers What is the MetLife Income for Life Bond? It is a single premium, investment bond which provides you with a guaranteed minimum income for life from age 55, by investing in a range of MetLife investment portfolios. The term income throughout this brochure refers to withdrawals of capital. 100% of your investment must be allocated to the Secure Income Option for your bond to be classified as an Income for Life Bond. If less than 100% is invested into the Secure Income Option, your bond will be referred to as a MetLife Investment Bond. For more information on the MetLife Investment Bond and other available investment portfolios, please speak to your Financial Adviser. Who can buy the bond? You can invest in our bond if you are a UK resident and aged over 18. The youngest Secure Income Life must be at least 45. The maximum age of the relevant life assured is 70 at the time the investment is made. Whilst maximum age restrictions apply for lives assured covered under the bond, MetLife can review this on an individual basis. How flexible is the bond? You can make additional payments (top-ups) into your bond, subject to a minimum payment of 5,000 for guaranteed portfolios and 1,500 for all other portfolios. 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 top-ups in the future. Investments can be accepted in Sterling only. You can invest up to 1.5 million into MetLife s guaranteed investments (across all your investment with us). You can invest in portfolios that are either guaranteed or have no guarantee. When invested in a guaranteed portfolio, you can switch out on a review date and up to 30 days following the review date of the earliest investment, but you cannot switch back into the same guarantee for six months. Provided you are not invested in a guaranteed portfolio, 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. Your bond is divided into 1,000 identical policies. This can help you manage your investment more tax-efficiently. Where is my money invested? You can invest in a range of portfolios, each with different risk profiles so you can match your investment to the amount of risk you feel comfortable taking. Payments into the bond are allocated to units of one or more available portfolios. The Secure Income Option is currently available on our MetLife Managed Wealth Portfolios. Further information on the underlying funds within the portfolios can be found in the MetLife Fund List. How will I know how my bond is performing? We will send you a statement each year showing you how your bond is performing. 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 investment in the 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.

5 Key Features of the MetLife Income for Life Bond (UK and International) 4 Questions and answers on the Secure Income Option What is the Secure Income Option? The Secure Income Option gives you a guaranteed minimum income for life, providing you with security whilst offering the potential to gain from investment performance. Normally your initial investment forms the base on which we calculate your guaranteed income - we call this the Secure Income Base. If you choose to pay Adviser Charges from your MetLife Income for Life Bond above certain levels it will result in a lower Secure Income Base. Your personalised illustration contains further details. The Secure Income Option can be selected on a single or joint life basis. If a joint life second death basis is chosen, the guaranteed income will continue to be paid after the death of the first life assured. The guaranteed income is calculated using a percentage of your Secure Income Base, called the Guaranteed Income Percentage. The percentage used to calculate your income for life depends on: Your age (or age of the younger person if selecting joint life) at the point income starts to be taken; and Whether the income is based on a single life or joint lives. The current Guaranteed Income Percentages for single life are shown in the table opposite. For joint life, the percentage is based on the younger of the two lives and then reduced by 0.25%. Age % Age % Age % % % % % % % % % % % % % % % % % % % % % %

6 5 Key Features of the MetLife Income for Life Bond (UK and International) Questions and answers on the Secure Income Option Income Deferral Increases If income is not taken immediately, MetLife will increase your Secure Income Base by 4.25% of the initial Secure Income Base* in the Secure Income Option for each full year income is deferred. We refer to these as Income Deferral Increases. This means that your initial Secure Income Base will increase by at least 4.25% each year. Secure Income Reviews Your Secure Income Base, can also increase through annual Secure Income Reviews. Where your fund value is higher than your Secure Income Base, we will increase your Secure Income Base to this amount. If the fund value is lower, then the Secure Income Base remains the same. Secure Income Reviews occur annually and there is no limit to the gains that can be locked-in. Example 3. Based on deferred income where the fund has grown by more than the deferred income increase Initial Secure Income Base is 250,000. At the Secure Income Review, this is compared to the value of the fund, which has increased to 270,000. Because 270,000 is greater than the annual deferral step-up of 4.25% [ 250,000 + ( 250,000 x 4.25% = 260,625)], we will increase your Secure Income Base to the higher value of 270,000. Example 4. Based on deferred income where the fund has fallen or not grown by more than the deferred income increase Initial Secure Income Base is 250,000. At the Secure Income Review, this is compared to the value of the fund, which has fallen to 230,000. Because 230,000 is less than the annual deferral step-up of 4.25%, we will increase your Secure Income Base to 260,625. How the Secure Income Reviews work Example 1. Based on immediate income for life for 65 Lives assured on Secure Income Option year old where fund value has grown For the Secure Income Option, you can nominate up to two Initial Secure Income Base is 250,000 and income for life based Secure Income Lives. The maximum age of the youngest Secure on a Guaranteed Income Percentage of 3.75% is 9,375 p.a. Income Life is 70 years. The income for life is payable for as long At the Secure Income Review in one year s time, the initial as a Secure Income Life is alive. If the policy is terminated due to Secure Income Base is compared to the value of the fund, surrender or death, the guaranteed income will cease. See What which has now increased to 260,000. Because this is happens upon death of a Secure Income Life? for further details. higher than the Secure Income Base of 250,000, we If you would prefer to guarantee your capital, rather than will increase your Secure Income Base to 260,000. This securing a guaranteed income for life, you can switch into our will mean that your guaranteed income, based on a Secure Capital Option (subject to restrictions). MetLife also offer Guaranteed Income Percentage of 3.75% of the increased a range of Protected Growth Funds, non-guaranteed portfolios and a cash fund which you may wish to invest in. Please speak to your Financial Adviser to learn more about these options and Secure Income Base, will be 9,750 p.a. if they are suitable for you. Example 2. Based on immediate income for life for 65 year old where fund value has fallen What might I get back? Initial Secure Income Base is 250,000 and income for life based on a Guaranteed Income for Life percentage of The amount you get back when you cash in some, or all, of your 3.75% is 9,375 p.a. MetLife Income for Life Bond will be determined by: At the Secure Income Review, this is compared to the value The amount you have invested. of the fund, which has decreased to 230,000. Because How long it has been invested for. 230,000 is lower than the Secure Income Base of 250,000, The investment performance of your funds. the Secure Income Base will remain at 250,000 and the guaranteed income will remain unchanged at 9,375 p.a. Whether you have opted for a guarantee. Charges. *This is reduced proportionately for any non-guaranteed withdrawals, any Ad hoc Adviser Charges, switches or encashments.

7 Key Features of the MetLife Income for Life Bond (UK and International) 6 The level of remuneration paid to your Financial Adviser from the bond, all of which will reduce the fund value. Money you ve already taken. Depending upon your personal circumstances, any tax you may need to pay. Your illustration will give you an idea of what you might get back. You must elect to do this on a policy anniversary and give us at least 30 days notice. Exercising this option will lead to a chargeable event which may mean that you have to pay tax as a result. You should seek tax advice and speak to you Financial Adviser before proceeding. How can I take money out of the bond? Regular withdrawals can be made every one, three, four, six or 12 months, subject to a 100 minimum. Any guaranteed withdrawals will reduce the value of your guarantee by the amount withdrawn. Non-guaranteed withdrawals, switches and Ad-hoc Adviser Charges taken from your guaranteed portfolio will reduce your Secure Income Base proportionately. Unless you are taking guaranteed income, you must leave at least 5,000 in the bond and 1,000 per portfolio. For commission based payments to your Financial Adviser: Withdrawals of up to 7.5% p.a. of the initial and each additional premium can be taken from the portfolio without product charge. If you cash in some, or all, of your bond, you may get back less that you invested. In addition, if you make unscheduled withdrawals or encashments within the first five years, these may be subject to an early surrender charge. For Adviser Charging based payments to your Financial Adviser: If you cash in some, or all, of your bond, you may get back less than you invested. What is the tax maximiser option? This is available if you have chosen the Secure Income Option and your investment has increased in value. It works in the following way: You can cash in or rebase your bond, and re-invest within the same guarantee. This will enable you to take tax-deferred withdrawals from a potentially larger investment amount and potentially increase your secure withdrawals. You can do this once in the lifetime of your bond but not within the first five years. What happens if I die? A benefit is payable in the event of the death of the life assured. Where there are more than two lives assured a death benefit will be payable on the last of the lives assured to die. Where there are two lives assured a death benefit will be payable on either the first or second death, depending on the option chosen at outset. The standard death benefit is 100.1% of the fund value (or 100.1% of the surrender value if the relevant life assured is aged 76 or over when the premium was paid). If the Secure Income Option is selected, an additional death benefit may apply in respect of each investment in the Secure Income Option. (See What happens upon the death of a Secure Income Life? ) What happens upon death of a Secure Income Life? In the event of the death of the last surviving Secure Income Life, a guaranteed death benefit will apply in respect of the investment in the Secure Income Option. The total amount of the death benefit will be: Where the deceased Secure Income Life is the same as the Life Assured whose death gives rise to a benefit under the policy the total death benefits payable under the policy will be the greater of: 100.1% of the fund value (or 100.1% of the surrender value if the relevant life assured is aged 76 or over when the policy starts), and The initial Secure Income Base as reduced, for example, by Guaranteed Income taken from the Secure Income Option. Where the last Secure Income Life dies before the Life Assured whose death gives rise to a benefit under the policy, no death benefits will be payable under the policy at that time. Instead, the greater of the following will be payable into a cash fund: 100.1% of the fund value, and The initial Secure Income Base as reduced, for example, by Guaranteed Income from the Secure Income Option.

8 7 Key Features of the MetLife Income for Life Bond (UK and International) What are the charges? There are a number of charges which we make for the administration and management of your investment, as well as specific charges if you choose to invest in the Secure Income Option. Your illustration will provide you with details of the costs that apply to your policy, as well as an indication of the impact that the charges will have on the benefits you may receive. Our product charges Annual management charge - This is applied by us for managing your plan and is deducted monthly. The level of charge will depend upon the value of your investment at the time the charge is taken. Fund charges - Each portfolio 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 - This is similar to an insurance premium and covers the cost of MetLife providing your guaranteed capital. This charge is taken monthly by cancelling units in your policy and is based on the value of your Secure Income Option. Establishment charge - This will be applied if you have chosen enhanced* (additional) unit allocation. For example, if you invest 10,000 with enhanced allocation of 2%, we will apply units to the value of 10,200 to your plan. We will then apply an establishment charge of 0.22% p.a. for every 1% enhancement. The establishment charge is taken monthly over five years. Option 1. Commission payments to your Financial Adviser (Available for advice provided before 31 December 2012) Establishment charge - This charge is applicable if paying initial commission to your Financial Adviser when you purchased your plan. For every 1% initial commission paid, you can ask us to apply a charge at a rate of 0.22% p.a. taken monthly over five years. Alternatively, the equivalent amount can be taken directly from your investment, on a likefor-like basis as a one off charge. Trail commission - This is an ongoing commission paid monthly to your Financial Adviser in respect of their service or advice provided to you. Please note, whilst commission payments will only be available for advice provided before 31 December 2012, any trail commission established prior to this date will continue to be paid to your adviser unless otherwise notified. *Please note that enhanced (additional) allocation will only be available for advice provided before 31 December 2012.

9 Key Features of the MetLife Income for Life Bond (UK and International) 8 Option 2. Adviser remuneration (Available from 31 December 2012) From 30 December 2012, you can instruct us to make payments to your Financial Adviser via the options noted below. The manner by which you remunerate your Financial Adviser would need to be selected at the outset of your investment. Initial Adviser Charge - This is a one-off payment we will make to your Financial Adviser on your behalf to cover the initial cost of their advice or service to you. Ongoing Adviser Charge - Refers to regular payments we will make to your Financial Adviser on your behalf to cover the cost of their advice or service provided to you. These payments can be made every one, three, four, six or 12 months. Ad-hoc Adviser Charge - This is a one-off payment to your Financial Adviser for any advice or service provided to you. This payment will proportionately reduce any guarantees within your plan. For example, if you ask us to make an ad-hoc payment of 3% of the fund value, this will reduce your guarantee by 3%. 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. If a death claim occurs or the policies are fully surrendered, a tax liability may arise from the bond if an investment gain has been made. The person(s) liable for any tax will depend upon how the bond is set up and the individual circumstances of the person(s) liable. If your bond is written under a Trust arrangement, the circumstances may differ. Please speak to your Financial Adviser for further clarification. Withdrawals (partial surrenders) of up to 5% p.a. for 20 years taken from the original investment are a withdrawal of capital and tax-deferred. Amounts taken (including Adviser Charges) which are greater than 5% p.a. of the initial investment over 20 years may be taxed. Payments you ask us to make to your Financial Adviser from your plan will reduce the value of your fund. You may cancel or amend these payments at any time. If amending payments, we will check to ensure they do not exceed the level set at outset. We may refuse to make any payments you ask us to make to your Financial Adviser. Whenever practicable we will notify you of any refusal before we accept your investment. Please note that we cannot make any payments of Ongoing Adviser Charges in excess of the amount that you initially instruct us to pay. If you wish to increase your ongoing payments to your Financial Adviser you will therefore need to either make an Adhoc Adviser Charge or make those additional payments directly to your Financial Adviser. Please see your illustration for more details on charges and an indication of their possible impact on your investment return and guarantee level. We reserve the right to change our charges. We will inform you in advance of any increase in charges. Our reasons for increasing charges could include changes in the law, taxation, regulation, solvency considerations, or in the charges of underlying third party funds.

10 9 Key Features of the MetLife Income for Life Bond (UK and International) Further information Terms and Conditions This Key Features Document aims to give you a summary of important information you should know in regards to the MetLife Income for Life Bond. For further information you should also read the Income for Life Bond 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 Income for Life Bond or wish to receive a copy of our complaints procedure, please contact: MetLife Europe Limited 141 Castle Street, Salisbury SP1 3TB Tel: If you are not satisfied with the response to your complaint in respect of your UK Income for Life Bond, you can contact the: Financial Ombudsman Service (FOS) South Quay Plaza, 183 Marsh Wall, 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 If you are not satisfied with the response to your complaint in respect of your International Income for Life Bond you can contact the: Irish Financial Services Ombudsman Bureau 3rd Floor, Lincoln House, Lincoln Place, Dublin 2, Ireland Tel: , Fax: enquiries@financialombudsman.ie 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 October 2012, all of which may change in the future with or without notice. The Law The Income for Life Bond and Income for Life Bond (International) Terms and Conditions are governed by the Law of England & Wales. The Income for Life Bond and Income for Life Bond (International) product is provided by MetLife Europe Limited, an Irish company authorised by the Central Bank of Ireland. We will communicate in English throughout the course of this contract. Compensation Your MetLife Income for Life Bond 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 90% 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: +44 (0)

11 Key Features of the MetLife Income for Life Bond (UK and International) 10 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 Income For Life 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 Write to us at: MetLife Customer Service Centre 141 Castle Street, Salisbury SP1 3TB Whenever you contact us, you will need to quote your policy details.

12 About MetLife Europe Limited 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 MetLife Europe Limited provides the Income for Life Bond and the guarantees referred to in this document. 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 U.K. For more information about MetLife Europe Limited, please visit our website at About MetLife, Inc. MetLife, Inc. is a leading global provider of insurance and financial services with more than 140 years of experience and operations throughout the United States, Latin America, Japan, Asia Pacific, Europe and Middle East. Through its subsidiaries and affiliates, MetLife, Inc. reaches 90 million customers in over 50 countries. It is the largest life insurer in the United States, Mexico, Russia, Chile and Argentina 1, with leading market positions in Japan, Korea and Brazil 2 and holds top five positions in over 20 markets 3. Clients include over 90 of the top 100 FORTUNE The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other financial services to individuals, as well as group insurance and retirement and savings products and services to corporations and other institutions. MetLife, Inc. has approximately $825 billion in total assets as at 30 June Based on life insurance in force according to A.M. Best (U.S.); Based on direct premium according to EstadisticAMIS (Mexico); Based on premiums according to Federal Board of Insurance Supervision (Russia); Based on combined direct premium according to Superintendecia de Valores y Seguros (Chile); Based on combined direct premium according to Superintendencia de Seguros de la Nacion (Argentina) 2 Nikkei (Japan); Financial Supervisory Service (Korea); SUSEP (Brazil) 3 AXCO 4 Issue Date: 23/5/2011 Want to find out more? Speak to your Financial Adviser to learn more about how this product could work for you, or call us on If you re looking for a Financial Adviser, you can find one close to you at You can also visit us at for more information. Products and services are offered by MetLife Europe Limited which is an affiliate of MetLife, Inc. and operates under the MetLife brand. MetLife Europe Limited (trading as MetLife) is authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Services Authority. Details about the extent of our regulation by the Financial Services Authority are available from us on request. Registered address: 20 on Hatch, Lower Hatch Street, Dublin 2, Ireland. Registration number UK branch address: One Canada Square, Canary Wharf, London E14 5AA. Branch registration number BR M l JAN 2013 B