Performax Gold advisor guide (MK2092E) · Bank-loan collateral . Who it’s for . Performax Gold is...
Transcript of Performax Gold advisor guide (MK2092E) · Bank-loan collateral . Who it’s for . Performax Gold is...
THE MANUFACTURERS LIFE INSURANCE COMPANY
Advisor’s Guide to
Performax Gold®
Performax Gold is permanent, non-participating whole
life insurance that can give your clients lifetime insurance
protection to meet their evolving needs. But Performax
Gold is about much more than life insurance. With
lower volatility and risk than other permanent
products, Performax Gold’s tax advantaged and growth
opportunities make it a powerful tool to consider as part
of your clients’ long-term financial and estate planning.
This guide gives you a quick look at how Performax Gold works and
how it can be a helpful addition to your clients’ fnancial plan. For more
details, see the administrative Product Guide and sample contract,
available on Repsource.
02 | PERFORMAX GOLD
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Who it’s for
Performax Gold is designed for individuals or business
owners that have a need for a death benefit and cash value
that grows over time – for instance, to pass funds to the
next generation, to pass on the value accrued in a private
company, or to pay off a tax liability at time of death.
Performax Gold can be appealing for clients who have maximized their non-
registered and registered savings options, and are looking to further diversify their
portfolio by adding life insurance as a tax-advantaged asset. It is well suited for
clients who are looking for low volatility and hands-off management of assets that
will not be needed during their own lifetime.
Performax Gold is typically used for:
Q Retirement and estate planning
Q Wealth accumulation and tax deferrals
Q Corporations looking for the Capital Dividend Account
Q Transfer of wealth and gifting to the next generation
Q Charitable gifting
Q Bank-loan collateral
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Feature Manulife’s Performax Gold Competitor’s Par Products
What makes Performax Gold a great ft for your clients?
With its unique key features and long-term stability, Performax Gold is one-of-a-kind.
But what are the main differences between Performax Gold and the competitors’
participating whole life? We’re glad you asked!
Annual credit to policy May earn a Performance Credit based on: ■ Investment Performance Credit ■ Custom Credit – pre-determined based on clients’
age, gender, smoking status, amount of insurance, coverage type and cost duration
May earn a dividend based on: ■ Investment returns, credited through the Dividend
Interest rate ■ Mortality ■ Lapses ■ Taxes ■ Expenses ■ Cost of capital ■ Level of capital ■ Regulatory changes
Investment performance Credited to the policy through the Performance Credit rate; performance is based on the smoothed yield of the Performax Gold Investment Fund
Credited to the policy through the Dividend Interest rate; based on the whole life fund yield, but not necessarily equal to it. The rate, determined by the appointed actuary, may be more or less.
Full client disclosure on how the Performance Credit / dividend is calculated
Yes. The formula is disclosed in our marketing materials No. Complex formula is not usually disclosed
Ability to do tax-free withdrawals of cash value in case of disability
Yes, through the contractual Disability Beneft No
Make additional deposits at any time, without underwriting
Yes, through the Accumulation account. No
Increase annual Deposit Option payments by $100K or up to the MTAR line, without additional underwriting
Yes No
Skip up to fve consecutive Deposit Option payments, and resume at $100K without requiring new underwriting
Yes No
Preferred Underwriting Yes (Healthstyles®) No
Choose from:
Coverage type
SINGLE LIFE Insures one person
JOINT-FIRST-TO-DIE Insures two or more people under the same coverage. We pay the death benefit when the first person dies
JOINT-LAST-TO-DIE Insures two or more people under the same coverage. We pay the death benefit when the last person dies and the insurance costs continue until last death
Age
Cost Duration
0 to 85 25-90 25-90
Costs to age 100 Costs for 15 years
Costs to age 100 Costs for 15 years
Costs to age 100 Costs for 15 years
Product overview
Coverage and cost options Performax Gold offers a range of coverage and payment options, so you can help your clients design
a policy that meets their specifc needs. And no matter which cost structure your client chooses,
insurance costs are guaranteed not to change for the duration of the coverage.
Limited policy fee We charge an amount to administer the policy, called the policy fee. Your clients can rest assured
the policy fee outlined in their contract will never change. And, it’s only payable for the frst 15
years, no matter which cost duration they’ve selected.
Payment offset program By submitting a written request, your clients can use the value in their policy to pay their policy
costs. Since Payment Of fset is not guaranteed and the value of the policy could change depending
on policy changes, withdrawals or Performance Credit Rate changes. It’s important to complete an
illustration and review the policy value with your client from time-to-time.
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Performance credit
What is smoothing?
Smoothing means that
investment returns are spread
over a longer period instead of
being recognized immediately.
This can lessen volatility and
helps deliver more stable
returns for both fixed and
non-fixed income assets.
The performance credit is an amount the policy earns
each anniversary that helps increase the policy’s
cash value, and can be used to purchase additional
insurance coverage. The amount of the Performance
Credit varies by the performance of the Performax
Gold Investment Fund (PGIF). We guarantee that the
Performance Credit will never be less than zero.
The Fund performance is refected in the annual Performance Credit
calculation through the Performance Credit rate. The Performance
Credit rate is based on the smoothed yield of the PGIF as at December
31st. It is declared on March 31 every year, and remains in effect for the
following 12 months.
About the Performax Gold Investment Fund The Performax Gold Investment Fund (PGIF) is a diversifed portfolio of assets
managed by Manulife’s investment professionals. Backed by Manulife’s
investment strength, high-quality portfolio and prudent risk management
practices, the smoothed returns of the fund can help reduce the volatility of
your clients’ policy values. The PGIF target asset mix includes equities, real
estate, commercial mortgages and bonds. We carefully select assets to help
meet the long-term needs of policy owners.
06 | PERFORMAX GOLD
Your clients choose how they want to use the performance credits earned by their policy by
selecting one of the following three options:
1 PAID-UP INSURANCE
If clients choose Paid-up Insurance, their Performance Credit is used to purchase more insurance called
Paid-up Insurance. This Paid-up Insurance portion of their policy also earns a Performance Credit
each year. This is the most effcient way Performax Gold can help your clients accumulate value in
their policy.
2 TERM OPTION
Through a mix of Yearly Term Insurance, and Paid-up Insurance, clients can use this option to get more
insurance coverage for a lower cost since the Term Option coverage is funded by the Performance
Credit. Based on the amount of coverage selected, the Term Option can be eligible for either a
10-year guarantee or a lifetime guarantee; however, any substandard ratings on the coverage need to
be within limits outlined in the administrative Product Guide.
3 ACCUMULATION ACCOUNT
When clients choose to have their Performance Credit applied to this account, no additional insurance
is purchased. The amount of Performance Credit is simply deposited in cash into the Accumulation
Account. As a result, the insurance coverage does not increase over time, but the policy’s cash value
is increased by the amount of Performance Credit earned every year. The Accumulation Account is
part of the policy and benefts from the same advantageous tax treatment. Interest is earned and
compounded daily, and we guarantee that the interest rate will never be less than 0%.
The balance of the Accumulation Account is payable tax-free, as part of the death benefit.
Subject to our administrative rules, clients may be able to change their Performance Credit
option after the policy is issued.
ADVISOR’S GUIDE | 07
Additional payment options
Your clients can choose to build more value within their policy by making additional
payments. These additional payments can purchase more insurance coverage,
called Deposit Option Insurance, or they can be deposited in cash into the
Accumulation Account.
We will deduct a percentage from all additional payments called a Load on Additional Payments; the contract guarantees that
this percentage won’t increase. Additional Payments must comply with our administrative rules and cannot cause the policy to
lose its exempt status.
Deposit option insurance The Performax Gold Deposit Option (DO)
feature allows clients to build up policy values
faster by purchasing extra insurance with their
additional payments. If the Deposit Option
coverage is requested with the initial insurance
application, it does not create increased medical
underwriting requirements. A Deposit Option
coverage can also be added to the policy after
issue, subject to our administrative rules and
underwriting requirements.
Deposit Option payments can be made at
any time throughout the year. Deposit option
insurance is purchased immediately, and cash
values are increased by the payment amount
minus the load.
The Deposit Option is subject to annual and
lifetime limits. The annual limit considers the
available tax room, and allows your clients
to make their additional payments in a very
fexible manner, such as increasing payments
by up to $100,000 year over year without
any underwriting required. The Lifetime limit
is determined based on the total amount of
deposit option payments your client is planning
to make throughout their life, and is printed in
their contract.
Accumulation account The Accumulation Account is an investment
account within the policy that earns daily
compound interest (see the previous section
– Performance Credit– for more details).
Every Performax Gold policy comes with an
Accumulation Account, so there is no need to
apply for it, and it can be used in conjunction
with Deposit Option. When clients place
their additional payments into this account,
no insurance is purchased and therefore, no
underwriting is required. Payments into the
Accumulation Account can be made at any
time, subject to available tax room.
08 | PERFORMAX GOLD
Performax Gold’s Deposit Option offers outstanding flexibility:
Clients can skip up to five consecutive years of DO payments, and/or vary
their annual payment amount without any negative consequences.
When to use the accumulation account vs deposit option
Deposit Option usually delivers the most value for your clients’ additional payments. However, in situations
where Deposit Option is not possible (for instance, if your client is heavily rated or if they are converting from
a term policy and don’t want to go through underwriting) the Accumulation Account is a great alternative.
Feature Deposit Option Accumulation Account
Needs to be applied for Y Can be added at issue or after
N Automatically included with every policy
Requires underwriting Y N
Payments accepted at anytime Y As long as a DO coverage is set up on the policy
Y
Payments purchase insurance Y N
Payments increase cash value Y Y
Earns performance credits Y N
Earns a daily compounded interest N Y
Tax-free growth Y Y
Ability to use all the available tax room in any given year
Possibly, subject to annual limit rules Y
Subject to a lifetime limit Y N
Cash value payable tax-free as part of the death beneft
N Only the insurance coverage is payable at death
Y
Withdrawals Y But DO insurance has to be surrendered
Y
ADVISOR’S GUIDE | 09
1
2
3
Used to pay policy costs $8,711.76
Used to reduce your loan balance $10,000.00
Used to purchase deposit option insurance $12,777.71
Placed in your side account $518.86
010 | PERFORMAX GOLD
If your client cancels their Performax Gold policy, the
amount of money they will receive from us on that specifc
day is the Total cash value minus any outstanding amount
(including any outstanding policy loan).
Keeping in touch with your policy values
Performax Gold’s
annual statement
allows your clients
to see how their
policy values
change every year.
Here’s a peek at
the key sections
of your clients’
statement:
1 Total amount of insurance
■ the insurance coverage amount, plus
■ the paid-up insurance coverage amount and/or Term
Option insurance amount, plus
■ the Deposit Option insurance coverage amount, plus
■ any Term insurance rider(s)
The total amount of insurance may be different from the
amount payable at death if any adjustments are required, like
deducting the loan balance for instance. The total amount
payable at death is shown on page 2 of the statement.
2 Total cash value
■ the Guaranteed Cash Value, plus
■ the cash value of the Paid-up Insurance coverage in effect
on the policy, plus
■ the cash values for the Deposit Option Insurance coverage
in effect on the policy, plus
■ the balance of the Accumulation Account
3 Payments we received from you
This section outlines the payments we received from
your client during the previous 12 months and how they
were allocated.
4
5
7
6
4
Additional payments
Policy anniversary summary
On page 2 of the Performax Gold annual statement, your
clients can see how many performance credits were earned
on their policy anniversary, and how they were applied
to their policy.
5 Total amount payable at death
This is the amount that would be paid from the Performax
Gold coverage if there was a claim. It takes into account
any adjustment applied to the amount of insurance, like
deducting the policy loan amount or adding the cash value
of the deposit option for Term Option policies.
6 Rider coverage details
This section shows the amount of coverage provided by
the riders.
7
The annual payment limit for deposit option insurance shows
the maximum amount that your client can pay without
underwriting required.
ADVISOR’S GUIDE | 011
Performax Gold riders
Clients can customize their Performax Gold policies to meet their needs by adding
any of the following riders at the time of purchase, or any time after.
Term insurance rider (TIR) This rider provides additional temporary insurance coverage. The person insured under the
Term Insurance Rider does not need to have permanent coverage on the policy. While this
coverage is temporary, it can be converted up to age 75 (without evidence of insurability) to
any other permanent plan then offered by us. Term riders are available either on a 10-year
renewable or 20-year renewable basis and on a single or combined life basis.
Total disability Waiver (TDW) rider If a person insured under this rider becomes totally disabled for a period of at least six
months, we will waive the policy costs for this policy for the period of disability. If total
disability occurs before age 60 and continues for at least six months, all policy costs will be
waived for as long as the disability continues. If total disability occurs after age 60, policy
costs are waived until age 65. This rider is available to any life insured under the policy or to
the payor of the policy.
Guaranteed insurability option (GIO) rider This rider gives clients the option to purchase additional insurance coverage on the life
insured without evidence of insurability. Clients can exercise this option at specifed “option
dates” as outlined in the policy contract. They can also exercise this option on specifc life
events including marriage and birth or adoption of a child.
Child protection (CPR) rider Our Child Protection Rider provides $10,000 of insurance coverage for the child of any
insured person covered by the policy. And once the child turns 25, they have the ability to
purchase up to $250,000 of new insurance coverage, including up to $100,000 of critical
illness insurance. No evidence of insurability is required for the life insurance coverage. To
qualify for the critical illness insurance coverage, we require the insured person to answer
one question to confrm he or she does not already qualify for, or have started the waiting
period for, any beneft under the new critical illness insurance policy.
012 | PERFORMAX GOLD
ADVISOR’S GUIDE | 013
Other built-in policy features
Performax Gold policies contain valuable features to protect clients during
difficult times – including a built-in Disability Benefit and the ability to take
policy loans.
Defning disability
For total disability, one of the following
must be satisfed:
■ Inability, due to injury or sickness, to perform
the substantial duties of their regular
occupation.
■ If not employed, inability due to injury or
sickness, to perform the regular substantial
activities they were engaged in prior to the
onset of injury or sickness.
For catastrophic disability, one of the
following mustbe satisfed:
■ Assumed disability – loss of sight, hearing,
speech, two hands, two feet, or a hand
and a foot
■ Loss of independence – unable to do
one Activity of Daily Living
■ Cognitive loss – requires substantial
supervision because of
a severe loss of cognitive functioning
■ Terminal illness – life expectancy of less
than one year
Disability beneft We hope your clients never require it, but if they ever
fnd themselves disabled and in need of fnancial
assistance, they can withdraw their policy’s cash
value tax-free, under the Disability Beneft provision.
To qualify, your client must provide evidence of total
or catastrophic disability within a year of onset of
the disability. Based on current tax legislation, a
payment under a policy as a Disability Beneft is not a
disposition of the policy (January 2017).
Policy loans After the frst policy year, Performax Gold clients can
use the values in their policy to request a cash loan
(as long as the policy is not in the grace period) up
to 90% of the Total Policy Value minus any other
outstanding policy loans. The policy is the only
security for the loan and we may ask the client to
complete a loan agreement. If the loan is outstanding
when the insured dies, we will reduce the death
beneft by the amount of the loan allocated to that
insured’s coverages.
We will also offer a policy continuation loan. If your
clients stop making payments (but are not on the
Payment Offset Program), we will make the policy
payments using a loan against the policy’s values. We
charge interest on this loan and the loan will reduce
any death beneft payable.
Applying for Performax Gold
We’ve made the application process easier and more efficient so your
client can get the coverage they want with less hassle, and with lower
costs for your healthiest clients.
Illustrating Performax Gold With Healthstyles A client’s Healthstyle can only be confrmed when the underwriting process is complete. Therefore,
we recommend that you use one of the following categories when you illustrate Performax Gold:
■ Healthstyle 3 for non-smokers
■ Healthstyle 4 for users of tobacco or nicotine products, other than cigarettes or e-cigarettes
■ Healthstyle 5 for cigarette smokers or e-cigarette smokers
If your client is given a preferred Healthstyle rating (Healthstyle 1 or 2 ), you can give them the good
news when you deliver the policy. You can fnd more information about Healthstyles underwriting
on Repsource.
*
THE HEALTHSTYLES® ADVANTAGE
Performax Gold offers Healthstyles underwriting that rewards clients for their good health
and lifestyle with lower insurance costs. Healthstyles is a more refned underwriting process
that recognizes that an individual’s health and lifestyle are unique.
ACCELERATED UNDERWRITING
With accelerated underwriting, applying for Performax Gold is easier than ever before. Now
many of your clients can apply for up to and including $1 million of coverage without having
to meet with a nurse to provide blood, urine and other biometric data . This means an
easier, less intrusive experience, faster decisions and a higher coverage amount that is four
times the previous limit of $250,000.
**
* Healthstyle 2 is not available for clients aged 18-45 under $1,000,001.** As of November 2018, all clients aged 18 up to and including age 50. Exceptions apply. Applicants with certain health concerns or personal medical histories will still require biometric testing.
014 | PERFORMAX GOLD
Why Manulife
Broad product shelf Manulife has a broad product shelf that can
help you bring some of the industry’s best
investment and insurance solutions to your
clients to prepare them for the future and help
them reach their fnancial goals.
Marketing support Our marketing materials are designed to
quickly educate your clients about our
product solutions and provide straightforward
answers to commonly asked questions.
These materials are available on Repsource at
manulife.ca/repsource.
Business development Our experienced regional wholesalers and
inside sales representatives can provide you
with a full range of product and industry
information, as well as support to help you
develop your business.
Tax, retirement and estate
planning services With extensive experience in retirement planning
and wealth accumulation strategies, our team
of accountants, lawyers, and other specialists
is skilled in proactively identifying opportunities
for clients, based on changing regulatory
environments and market conditions.
Financial strength and stability
Strong. At Manulife, we operate from a
position of strength. Our strength is refected
in our strong capital, our fnancial ratings
awarded us from independent rating agencies,
and our strong asset performance.
Reliable. Manulife is proud to lead businesses
that provide individual life and health insurance,
wealth management, banking, group benefts,
group savings plans, plus services to alumni and
professional associations across the country.
Trustworthy. For over 125 years, Manulife
has stood solidly behind our promises to help
secure the fnancial future for our clients.
Forward-thinking. Manulife is a market leader
in both fnancial protection and the wealth
management business operating in Asia,
Canada and the United States. We provide a
full suite of products and services to meet the
current and future needs of individual and
group customers.
ADVISOR’S GUIDE | 015
For the most recent corporate information,
please visit manulife.com
Performax Gold and Healthstyles are registered trademarks of Manulife (The Manufacturers Life Insurance Company). Manulife, Manulife Insurance, the Block Design, the Four Cube Design and Strong, Reliable Trustworthy Forward-thinking are trademarks of the Manufacturers Life Insurance Company and are used by it and its affliates under license.
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