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 increase the value of your investment over the medium to long-term. To allow you to choose, with the help of your Financial Adviser, a portfolio to match your investment objectives and risk appetite. 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. To provide you, through the Secure Income Option, with a deferral bonus of 4% of your initial investment 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 an investment that is flexible enough to meet your needs. Your commitment To invest at least 10,000. To review your investment regularly with your Financial Adviser. To view your MetLife Income for Life 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.

3 Key Features of the MetLife Income for Life Bond (UK and International) 2 Risk factors If you choose to take a secure option available under this 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 could be 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. You may have withdrawn more than the amount shown in your illustration. The tax rules that apply to your investment may change. Any changes could mean that you pay more or less tax on this investment. For more information, please read the What about tax? section in this document. 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 you become a resident or citizen of another country, you may be required to pay more or less tax on this investment. If you cancel your MetLife Income for Life Bond within 30 days of receipt of your cancellation notice, the refund you receive will reflect any reduction in the value of the investment. See Can I change my mind? section. If you choose to 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. The investment portfolios you can choose are described in the MetLife Fund List along with the aims of each available portfolio. If you surrender or cash in some or your entire plan 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.

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, unit-linked, whole of life insurance Bond that invests in a range of portfolios offered by MetLife. Please note that all of your investment must be invested into the Secure Income Option for your Bond to be classified as an Income for Life Bond. If less than 100% is invested in the Secure Income Option, which is possible, your Bond will be referred to as a MetLife Investment Bond (see the MetLife Investment Bond brochure for further details). How flexible is it? You can invest in the MetLife Income for Life Bond if you are a UK resident and aged over 18. The youngest Secure Income Life must be at least 45 years. Maximum age restrictions apply for lives assured covered under the Bond, the maximum age of the chosen life assured is 70 years at the time the investment is made. The minimum amount required to establish a MetLife Income for Life Bond is 10,000. The minimum additional payment to a guaranteed portfolio is 5,000 ( 1,500 for existing nonguaranteed portfolios). Top-ups can be made at any time, but will be subject to the charges, investment choices and conditions applicable at the time. Investments can be accepted in Sterling only. We reserve the right to not accept top-ups in the future. Your Bond is divided into 1,000 identical policies in order to help you manage your investment more tax-efficiently. As the Bond has a life insurance element, the death benefit is payable in the event of the death of the life assured or where there is more than one life assured, in the event of the death of the appropriate life assured. This can be only on a last survivor basis for joint lives. The policy and any associated guaranteed benefits will terminate on the death benefit being payable. You have the option of investing in a range of portfolios, so you can build your MetLife Income for Life Bond to suit your plans. The Secure Income Option allows you to benefit from a guaranteed minimum income for life, which could increase based on investment performance. 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. When invested in a guaranteed portfolio, you can switch out on the 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.

5 Key Features of the MetLife Income for Life Bond (UK and International) 4 Regular withdrawals are permitted subject to a minimum of 100. There may be a tax implication if you withdraw more than the tax-deferred capital withdrawal amount of 5% p.a. for 20 years. Unless you are taking guaranteed income, you must leave at least 5,000 in the plan and 1,000 per portfolio. The MetLife Income for Life Bond incorporates the Tax Maximiser Option. If your investment has increased in value, the Tax Maximiser Option allows you to surrender, or rebase your Bond and reinvest within the same guarantee. By doing this you can take tax-deferred capital withdrawals from a potentially larger investment. The Tax Maximiser Option can be exercised only once in the lifetime of the Bond and not within the first five years. The Tax Maximiser Option may be exercised only on a policy anniversary, providing you give at least 30 days notice. 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. Where is my money invested? Payments into the Income for Life Bond are allocated to units of one or more available portfolios. The Secure Income Option can currently be selected on our MetLife Managed Wealth Portfolios. The funds in which the MetLife Managed Wealth Portfolios invest are currently managed by BlackRock, one of the world s leading providers of investment, advisory and risk management. We also offer non-guaranteed portfolios for you to invest in which include a range of index and managed portfolios, and a cash fund. Each of our portfolios come with a different risk profile, so you can match your choice to the amount of risk you feel comfortable taking.

6 5 Key Features of the MetLife Income for Life Bond (UK and International) 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 based on your initial investment, and provides you with security whilst offering the potential to gain from investment performance. Your initial investment forms the base on which we calculate your guaranteed income we call this the Secure Income Base. The Secure Income Option can be selected on a single or joint life basis. If joint life is chosen, the guaranteed income will continue to be paid to your dependant on your death. The guaranteed income is calculated using a percentage of your Secure Income Base, called the Guaranteed Income Percentage. The percentage depends on: Your age (or age of the younger person if selecting joint life) at the point income starts 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 below. For joint life, the percentage is based on the younger of the two lives and then reduced by 0.5%. The Secure Income Base, and therefore the guaranteed income, can also increase through Secure Income Reviews, where we review the performance of your fund on each anniversary of your initial investment. 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, even when income is deferred, and there is no limit to the gains that can be locked-in. If you would prefer to guarantee your capital, rather than securing a guaranteed income for life, you can switch into our Secure Capital Option (subject to restrictions). See our Guaranteed Investment Bond brochure and Key Features Document for further information on this option. For the Secure Income Option, you can nominate up to two Secure Income Lives. The maximum age of the youngest Secure Income Life is 70 years. The income for life is payable for as long as a Secure Income Life is alive. If the policy is terminated due to surrender or death, the guaranteed income will cease. See What happens upon death of a Secure Income Life? for further details. Age % Age % Age % If you don t take income immediately, MetLife guarantees to increase your Secure Income Base by 4% of your initial Secure Income Base for each full year you defer taking income. These increases are called Income Deferral Increases. Additionally, when you come to take an income the Guaranteed Income Percentage will be higher, as this is based on your age at when you start taking income.

7 Key Features of the MetLife Income for Life Bond (UK and International) 6 What might I get back from my MetLife Income for Life Bond? The amount you get back when you cash in some, or all, of your MetLife Income for Life Bond will be determined by: The amount you have invested. How long it has been invested for. The investment performance of your selected funds. Whether you have opted for a guarantee. The charges we have taken. Any withdrawals you have taken. Depending upon your personal circumstances, any tax you may need to pay. Please see your illustration to get an indication of what you might get back. Can I take money out of my MetLife Income for Life Bond? Regular withdrawals can be made every one, three, four, six or 12 months. Any guaranteed withdrawals will reduce the value of your portfolio by the amount withdrawn. If any non-guaranteed withdrawals or switches from your MetLife Managed Wealth Portfolios are made, the Secure Income Base and guaranteed death benefit will be reduced proportionately. If you surrender your plan or cash in some, or all of it, you may get back less than 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. Withdrawals of up to 7.5% p.a. of the initial and each additional premium can be taken from the portfolio without charge. 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. The Bond can only be purchased by UK residents. We would recommend that you seek advice from your Financial Adviser on 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, 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 a Bond is written under a Trust arrangement, the circumstances may differ. Please speak to your Financial Adviser for further clarification. Guaranteed income and any withdrawals of up to 5% p.a. for 20 years can be taken from the MetLife Income for Life Bond and will be treated as a withdrawal of capital and hence treated as tax-deferred for income tax purposes. Amounts taken which are greater than 5% p.a. of the initial investment over 20 years may be taxed. For any questions regarding taxation and the impact of this investment on your personal circumstances, you should consult your Financial Adviser. Please remember that the tax rules relating to your MetLife Income for Life Bond may change in the future, which could affect the returns you receive from your investment or the charges MetLife makes on your investment.

8 7 Key Features of the MetLife Income for Life Bond (UK and International) What are the charges? Annual Management Charge This is applied to the Bond based on your current fund value, and is made for administering your Bond. The annual management charge is dependent upon whether you choose a UK Bond or the International Bond and the level of trail remuneration payable to your Financial Adviser. Details of the annual management charge can be found in your illustration. Establishment Charge An establishment charge may be made to remunerate your Financial Adviser or for additional unit allocation. At the outset of the Bond you can have an enhancement in units allocated to your Bond. For example, if you invest 10,000 with enhanced allocation of 2%, we will allocate units to the value of 10,200 to your Bond. When enhanced allocation is chosen, we apply an establishment charge of 0.22% p.a. for every 1% enhancement. The establishment charge is taken monthly over a five year period. The same charge structure is available to your Bond in order to remunerate your Financial Adviser. For every 1% initial commission paid to your Financial Adviser, we can either apply a charge at a rate of 0.22% p.a. taken monthly over five years, or deduct the equivalent amount directly from your investment on a like-for-like basis, as a one off payment. Fund Manager s Charge Each portfolio in which you invest carries a fund manager s charge, which includes fees levied by the managers of the underlying investments held by the funds. Guarantee Charge This is an insurance premium to cover the cost of providing the guaranteed benefits, taken monthly through deducting units. Depending on the remuneration you have agreed with your Financial Adviser, we may reduce the amount allocated to your initial Secure Income Base. Please see your illustration for more details on charges and an indication of their possible impact on your investment return. 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.

9 Key Features of the MetLife Income for Life Bond (UK and International) 8 What happens if I die while I have the Income for Life Bond? A benefit is payable in the event of the death of a life assured. The death benefit is a percentage of the fund value or the surrender value of the Bond, dependent on the age of the life assured when the investment commenced. The percentages are as follows: Relevant life assured aged 70 or under when the Bond was established or premium was paid: The death benefit percentage is 100.1% of the full fund value, regardless of exit penalty. Relevant life assured aged 71 and over when the Bond was established or premium was paid: The death benefit percentage is 100.1% of the surrender value rather than the fund value. Upon payment of the death benefit, the policy will be terminated and no further income will be payable. 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 amount payable will be the greater of 100.1% of the fund value and the initial Secure Income Base less any guaranteed withdrawals from the Secure Income Option. On payment of the guaranteed death benefit, all guaranteed income payments and other benefits in respect of the Secure Income Option under the policy will cease. How will I know how my Income for Life Bond is doing? We will send you a statement each year showing you how your MetLife Income for Life 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 Income for Life Bond is accepted. If your contribution has been invested and the fund value has fallen, the amount refunded to you will be less than your original investment.

10 9 Key Features of the MetLife Income for Life Bond (UK and International) Further information Taxation Information contained in this document is based on MetLife s understanding of taxation, legislation and HM Revenue & Customs practice, as at February 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) policy 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) Complaints If you have a complaint about your MetLife 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.

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, is the largest life insurer in the United States 1 and Mexico 2, and has relationships with more than 90 of the top 100 FORTUNE 500 companies 3, and over seventy percent of all Fortune 500 companies. 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 $493.2 billion total assets, as at 30 September #1 U.S. Life Insurer (Grp+Ind based on policies in force) LIMRA, June Estadisticas AMIS, June FORTUNE 500, May FORTUNE 500 is a registered trademark of FORTUNE magazine, a division of Time, Inc. 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 FEB 2012 B