Mod 3 Part 6 2-IN-ONE Savings and SPInv Plan as at Oct2014

PRESENTATION TITLEPRESENTATION TITLE

GOAL CATEGORIES & THE RMM SOLUTION

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Category Description RMM solutionInvest Saving for a future goal • 2-IN-ONE Savings 4 my

Goal• Single Premium

Investment planRetire Saving to be able to maintain a lifestyle

after retirementRetirement Plan

Death & Disability Leaving sufficient funds behind to settle outstanding debt and take care of

dependants

• Pure Life Plan• Life & Disability Plan

• Accidental Death & Disability Plan

Paying for a dignified funeral • Funeral Care Plan• Standard Funeral Plan

• Comprehensive + Funeral Plan

Education Saving for a child's education to ensure a brighter future

2-IN-ONE Savings 4 Education

Debt Free Settling all debt or consolidating debt to ensure greater disposable income

Old Mutual Finance

Household & Car Ensuring your personal belongings against theft or damage

iWYZE


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Why would your customers need to save for a future goal?

Case study

FINANCIAL GOAL: SAVING FOR A LONG-TERM GOAL

• Saving for a goal, means that you do not have to incur debt to reach a goal

• Saving over a long term results in better growth for your money because of compounding


Who should buy the 2-IN-ONE Savings plans?

The 2-IN-ONE Savings plans are designed for customers who want to commit to a specific long term goal, but also want access to money during this period if required.

It is not aimed at customers wanting to save solely for the period shorter than 10 years.

2-IN-ONE SAVINGS PLANS

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2-IN-ONE Savings plans

Long Term Pocket Short Term Pocket

Build for the future Deal with todayRegulated by the Long

Term Insurance ActRegulated by the Collective

Investment Schemes Control Act


What are the age limits?


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ProductMinimum entry

age for policyholder

Maximum entry age for

policyholder

2-IN-ONE SAVINGS 4 MY GOAL 0 N/A

2-IN-ONE SAVINGS 4 MY GOAL (With Premium Waiver Option) 16 N/A

2-IN-ONE SAVINGS 4 EDUCATION 0 N/A

2-IN-ONE SAVINGS 4 EDUCATION (With Premium Waiver Option) 16 N/A



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ProductMinimum entry

age for the child

Maximum entry age for the

child

2-IN-ONE SAVINGS 4 EDUCATION Birth 14

2-IN-ONE SAVINGS 4 EDUCATION (With Premium Waiver Option) Birth 14



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What are the minimum and maximum terms?

Product Minimum TermsWhen maturity

benefit is available

2-IN-ONE SAVINGS 4 MY GOAL 10 Any age

2-IN-ONE SAVINGS 4 MY GOAL (With Premium Waiver Option) 10 Any age

2-IN-ONE SAVINGS 4 EDUCATION 10 Any age

2-IN-ONE SAVINGS 4 EDUCATION (With Premium Waiver Option) 10 Any age


HOW CONTRIBUTIONS ARE COLLECTED

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Total Contributi

on

Long Term Pocket

Short Term Pocket

R150 R130 R20R160 R130 R30R900 R585 R315R2000 R1300 R700

For contribution from R150 – R200 a month:

R130 goes into long term and the rest goes into the short terms savings.

For contributions over R200 a month:

65% goes to long term and 35% to short term.


PREMIUM SPLIT: WITHOUT PREMIUM WAIVER OPTION

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How is the premium split?

Total Contribution Long term premium Short term contribution

R150 R130 R20

R200 R130 R70

R250 R162.50 R87.50

R300 R195 R105

R400 R260 R140

R500 R325 R175

R1000 R650 R350


PREMIUM SPLIT: WITH PREMIUM WAIVER OPTION

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How is the premium split?

Total contribution Long term premium

Premium for Premium Waiver

Short term contribution

R165 R130 R13 R22

R200 R130 R13 R57

R250 R152.58 R15.26 R82.16

R300 R183.10 R18.31 R98.59

R400 R244.13 R24.41 R131.45

R500 R305.17 R30.52 R164.32

R1000 R610.33 R61.03 R328.64


FEES

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It is of crucial importance that you disclose these fees to your customers. This links closely to TCF legislation in that you have

to be transparent regarding anything that could impact a customer’s savings.


PRODUCT FEATURESShort -term contribution increases and decreases

A customer can increase or decrease their short term contribution by at least R20 once every year. No changes are allowed for the first 12 months.

Savings top-up

A Top-up can be made anytime, provided that a previous top-up contribution has been finalised. The top up limits are as follows:

Minimum top-up amount – R250Maximum top-up amount – R5000

Top-ups can only be made via a once off debit order arranged at a client services branch. Any amount for the savings top-up will first be used to pay the long-term premiums that might be in arrears.

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When: Savings Boosters is an amount equal to:

After 24 premiums Sum of the last 2 long term premiums



PRODUCT FEATURESSavings boosters

To motivate our customers to be disciplined in their long term savings. Old Mutual will pay into the long-term pocket, the following:

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ActivityAmount = R275.60

24R137.80

23R137.80

22R137.80

21R137.80

20R137.80 Premiums


DISABILITY, DEATH & MATURITY

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Long-term pocket

Disability of policyholder

Death of policyholder

Maturity

2-IN-ONE Savings 4 my Goal(Without Premium Waiver Option)

The customer has 3 options:

1.Continue paying premiums2.Request that the policy be made paid-up if the minimum paid-up value is met.3.Claim the fund value with a valid disability claim

The fund value available at the time of death will pay out, if claimed by the nominated beneficiary.

The fund value is transferred to the short -term pocket.

2-IN-ONE Savings 4 Education(Without Premium Waiver Option)


DISABILITY, DEATH & MATURITY

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Short-term pocket

Disability of policyholder

Death of policyholder

Maturity

2-IN-ONE Savings 4 my Goal(With and without Premium Waiver Option)

If the long-term pocket is made paid-up, the short-term pocket will also be paid-up.

The fund value available at the time of death will pay into the customer’s estate.

After the long -term pocket fund value is transferred to short term -pocket, the short-term Pocket remains paid-up

until the customer claims the maturity

proceeds

2-IN-ONE Savings 4 Education(With and without Premium Waiver Option)


THE PREMIUM WAIVER OPTIONWhat is the premium waiver option?

It can only be selected on application of the policy.

It protects the customer’s savings only for the first 10 years, irrespective of the term selected by the customer.

It costs a customer an additional 10% of the long term premium, for10 years only, thereafter this additional amount is paid to the Long Term Pocket.

There is a 6 months waiting period on death or (certain) disability as a result of natural causes.

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THE PREMIUM WAIVER OPTIONHow does the premium waiver work?

The premium waiver comes into effect when the policyholder dies or becomes disabled. Old Mutual will inject a lump sum, equal to the remainder of the premiums required up to a term of 10 years. After the lump sum was injected, the following applies:

2-IN-ONE Savings 4 my Goal – The policy will pay out.

2-IN-ONE Savings 4 Education – The policy will become paid-up.

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Activity

THE PREMIUM WAIVER OPTION1. A customer has a 2-IN-ONE Savings 4 my Goal and dies due to natural causes after 4 months from applying for the policy.

The fund value available at the time of death will pay out to the beneficiary.

2. A customer has a 2-IN-ONE Savings 4 my Goal and dies due to natural causes after 2 years from applying for the policy.

Old Mutual will inject a lump sum, equal to the remainder of the premiums required up to a term of 10 years and the policy will pay out.

3. A customer has a 2-IN-ONE Savings 4 Education and becomes disabled due to an accident after 1 month from applying for the policy.

Old Mutual will inject a lump sum, equal to the remainder of the premiums required up to a term of 10 years and the policy will become paid-up.

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THE PREMIUM WAIVER OPTION

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2-IN-ONE Savings 4 my Goal and Education(With Premium Waiver Option)

Death of PolicyholderNatural Causes Accident

Less than 6 months from application date


Waiver benefit applies

More than 6 months from application date

Waiver benefit applies Waiver benefit applies

After 10 years



THE PREMIUM WAIVER OPTION

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Disability of PolicyholderNatural Causes Accident

Less than 6 months from application date



Waiver benefit applies

More than 6 months from application date

Waiver benefit applies Waiver benefit applies

After 10 years




CAUSAL EVENTS

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Long-term pocket Short-term pocket1 part-withdrawal after every 5 years Money can be withdrawn at any time up to a

balance of R0.

Long-term pocket Short-term pocketSurrender value is available at any time Will automatically surrender when long-term

pocket is surrendered

Long-term pocket Short-term pocketWill automatically become paid-up when customer stops paying premiums and the premium holiday benefit and the grace period is used if the value is greater than R1000.

Customer can also request for it to be made paid-up if the minimum paid-up value is met.

Will also be paid-up if the long-term pocket is paid-up.

Part-withdrawals

Surrender

Paid-up


FEES & CHARGES APPLICABLE FOR CAUSAL EVENTS

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Event Fees & Charges

Part withdrawal

R300* + reducing fee.

Sum must not be more than 30% of fund value

Paid-up

Surrender (from active status)

Surrender (from paid-up status)

R155*, which must not be more than 30% of fund value

Under certain extreme circumstances (for instance, investment market crash), we may reduce the Part Withdrawal and the Surrender Values by a percentage as a protective measure. Once the market normalises, the reduction percentage may be removed.


THE REDUCING FEE: SAVINGS PLAN WITH A TERM OF 10 YEARS

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15%

0%

Application 5 years

Charge term

10 years/2 = 5 years



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15%

0%

Application 10 years

Charge term




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15%

0%

Application 10 years

Charge term


Maximum penalty term is 10 years.


HOW SAVINGS ARE INVESTEDLong Term Pocket

1. Savings in the Long Term Pocket are all invested in the Old Mutual Smoothed Bonus Fund.

2. The fund then invests in a mix of investments, such as:

a) High growth investments: Sharesb) Medium growth investments: Propertyc) Low growth investments: Bondsd) Foreign investments: All of the above

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HOW SAVINGS ARE INVESTED3. This is a medium risk fund: Under bad market conditions, customers may get less than what was invested.

4. Customers’ savings grow by bonuses declared each year for the previous year.

5. Guaranteed to receive not less than sum of the accumulated net premiums at:

a) Maturityb) or death.

6. Guarantee falls away on taking part-withdrawals or surrender of policy.

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The yearly bonuses we declare are not guaranteed. This means that the bonus may be reversed in extreme market conditions.


HOW SAVINGS ARE INVESTEDShort Term Pocket

1. Savings in the Short Term Pocket are all invested in the Old Mutual Money Market Fund.

2. The fund then invests in cash and other banking investments.

3. This is a low risk fund: Very small chance that customers would get less than what was invested.

4. Customers’ savings grow by interest, which is added at the end of each month. 5. For customers exiting, the interest earned up that day is added.

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2-IN-ONE SAVINGS 4 EDUCATION: EXCLUSIVE FEATURES What limits apply to children?

A customer can take out the 2-IN-ONE Savings 4 Education for any child, it does not have to be a dependent, own or legally adopted child.

A customer can change the name of the child on the plan for any reason and at any time.

The investment term for the child will be determined by the age of the child.

The normal age at which a child finishes with school is at 18. It would make sense for a customer to select a term that would reach maturity when the child reaches 18 or 19 years.

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2-IN-ONE SAVINGS 4 EDUCATION: EXCLUSIVE FEATURES What happens on death or disability of the child?

On death or disability of the child the customer has the following options:

Replace the child on the plan with another child and continue paying premiums.

Request the fund value to be paid out with a valid disability or death claim.

Request for the policy to be made paid-up if minimum paid-up value is met.

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2-IN-ONE Savings Plans assessment


THE SINGLE PREMIUM INVESTMENT PLAN

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Single Premium Investment PlanMinimum entry age for policyholder None

Maximum entry age for Policyholder None

Minimum premium R2000

Maximum premium R200 000

Minimum term 5 years

Maximum term None

Who can be the premium payer? Anyone can pay



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Single Premium Investment PlanPremium Holiday

Surrender value available?

Part-withdrawals allowed?

Paid-up option available?

API applicable?

Family Support Services

Excluding Funeral Support

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No



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Single Premium Investment Plan assessment


SAVINGS RANGE: THE ADVICE LED CONVERSATION

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The value of Advice Led Conversation.

THANK YOU

Old Mutual is a licensed Financial Service Provider

THANK YOU

Old Mutual is a licensed Financial Service Provider

Mod 3 Part 6 2-IN-ONE Savings and SPInv Plan as at Oct2014

Documents

Transcript of Mod 3 Part 6 2-IN-ONE Savings and SPInv Plan as at Oct2014