Upload
trannguyet
View
214
Download
0
Embed Size (px)
Citation preview
What’s inside productoverview
costofinsurance
deathbenefitoptions
jointandmultiplelifecoverages
investmentaccounts
taxation
administrativeinformation
additionalbenefits
SunUniversalLifeADVISOR GUIDE
LIFEINSURANCE|Permanent
Life’s brighter under the sun
ADVISOR USE ONLY
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 2
TABLE OF CONTENTS
PRODUCT OVERVIEW .............................................................................................................. 3
COST OF INSURANCE (COI) OPTIONS ............................................................................... 7
DEATH BENEFIT OPTIONS ..................................................................................................... 10
JOINT AND MULTIPLE LIFE COVERAGES ........................................................................... 12
INVESTMENT ACCOUNTS ..................................................................................................... 15
TAXATION ................................................................................................................................ 23
ADMINISTRATIVE INFORMATION ...................................................................................... 24
ADDITIONAL BENEFITS ......................................................................................................... 29
ADDITIONAL BENEFITS SUMMARY ....................................................................................33
GENERAL DEFINITIONS ......................................................................................................... 34
3 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
FEATURES
Basicinsurancebenefitoptions
• Singlelife• Jointfirst-to-die:upto5livesperbasicinsurancebenefit• Jointlast-to-die:upto2livesperbasicinsurancebenefit• Multiplelife:upto5singlelivesor4singlelivesand1jointlife
(maximum9livesperpolicy)
Costofinsurance(COI)options
• Guaranteedyearlyrenewableterm(YRT)• Guaranteedlevel
Issueages • YRTCOI:0to64• LevelCOI:18to80• Jointlife:18to80• Indexedfaceamount:0to70
Bands • $50,000to$99,999(availableforconversiononly)• $100,000to$249,999• $250,000to$499,999• $500,000to$999,999• $1,000,000+Note: Face amounts of $50,000-$99,999 are available for term conversions only, and only when converting the entire amount of the originating plan. Partial conversions of less than $100,000 are not permitted.
Underwritingclasses • Smoker• Non-smoker
Deathbenefitoptions • Levelinsuranceamount• Insuranceamountplusfund• Fundbuilder• Indexedinsuranceamount(ConsumerPriceIndexorfixedindex
tomaximumof8%)
Administration/policyfee
• None
PRODUCT OVERVIEW
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 4
BENEFITS
Accesstothepolicyfundwhendisabled
Includedonallpolicies;noadditionalcostofinsuranceapplies
Earlydeathbenefit Availableforjointlast-to-diecoverage;noadditionalcostofinsuranceapplies
Optionalbenefits Description Issueages
• 5-,10-,and20-yearrenewableandconvertibleterminsurancebenefit–availableontheinsuredandoneadditionalperson
• Renewabletoage80,convertibletoage70
• 5-yearterm:18to70• 10-yearterm:18to70• 20-yearterm:18to60
Totaldisabilitybenefit–protectionandsavingsoptions
0to55
Ownerdeathbenefit–protectionandsavingsoptions
18to60
Ownerdisabilitybenefit–protectionandsavingsoptions
18to55
Accidentaldeathbenefit(singlelifeonly) 0to65
Guaranteedinsurabilitybenefit(singlelifeonly) 0to50
Executiveguaranteedinsurabilitybenefit(singlelifeonly)
25to60
Coveragedeathbenefit–protectionandsavingsoptions(jointlast-to-dieonly)
18to75
Policyloans • Minimum:$500• Maximum:dependsonfactorssuchaspolicyfundvalue,
marketvalueadjustment,surrendercharges,etc.• Interestrate:dailyinterest+2%
Withdrawals • Minimum:$500• Maximum:uptothecashsurrendervalue,ifavailable• Transactionfeesmayapply
Surrendercharges • Applicablefor10yearsforeachcoverage(basedonamultipleoftheinsurancefactor1)
• HigheronSunUniversalLife Max forthefirst5policyyears
Transactionfees • Uptotwofreetransactionsperpolicyyear• Themaximumfeechargedatanytimeis$100pertransaction
1 Insurance factor for non-rated cases is equal to 100% of the level COI rate based on the issue age and the insurance amount.
PRODUCT OVERVIEW
5 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
WITHDRAWAL ORDER
Standardorder • Dailyinterestaccount(DIA)• FPXportfolioindexaccounts• Accountsbasedontheperformanceofindices• Accountsbasedontheperformanceofmanagedfunds(proportional)• Guaranteedinterestaccount(GIA)
Alternateorder • DIA• GIAs• FPXportfolioindexaccounts• Accountsbasedontheperformanceofindices• Accountsbasedontheperformanceofmanagedfunds(proportional)
Proportionalwithdrawalorder(default)
• Proportionalfromeachaccount(DIA,index,managed)basedonthebalanceineachaccountatthetimeofwithdrawal
NO INVESTMENT BONUS OPTION
Noinvestmentbonusoption
• Mustbechosenattimeofsale• COIdiscountnotavailable• Resultsinlowermanagementfeesforallaccountsbasedontheperformanceof
indices,accountsbasedonperformanceofmanagedfunds,andhighercreditedinterestratesfortheGIAsandDIA
INVESTMENT BONUS AND COI DISCOUNT
Investmentbonus • Mustbechosenattimeofsale• Bonusstartsattheendofyear2andcredits0.40%annually
onthepolicyanniversary• Bonusispaidannuallyattheendofthepolicyyearbasedontheaverageofthe
monthlyaveragepolicyfundvalueinthepreceding12months(netofloansandinterestaccruedonloans)
• Highermanagementfeesthanfornobonusoption• Addedtotheactivityaccount
COIdiscount • Availableonlyforpolicieswithaninvestmentbonus• ReducestheCOIbasedonthefundingratio2andtheinsuredperson’s
agewhentheypurchasethepolicy(seepage9)• Fordiscountcalculationpurposes,thefundingratioisvested
attheendofthe9thyearforthelifeofthepolicy
2 Funding ratio is the net insurance payments (total payments minus the insurance charges for the optional benefits, withdrawals and market value adjustments) divided by the insurance factor accumulated over completed years.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 6
SunUniversalLife
SunUniversalLife(SunUL)isapermanentlifeinsurancepolicythatincludesinsurancebenefitsononeormoreinsuredswithseveralinvestmentoptionsavailabletoclients.
Ratherthanpurchaseanewpolicy,theinsuranceamountofaSunULpolicycanbeincreasedbyaddinganotherbasicinsurancebenefitonanattainedagebasis.Anyincreaseintheinsuranceamountwillrequiretheinsuredpersontoprovidetheappropriateevidenceofinsurability,unlessaguaranteedinsurabilitybenefitorExecutiveGIBiselected.
Theinsuranceamountofthepolicycanalsobeeasilydecreased.Thereducedinsuranceamount,however,cannotdropbelowSunUL’sminimuminsuranceamountrequirement.
SunUniversalLife Max
SunUniversalLife Max(SunULMax)buildsonthestrengthsofSunUniversalLifeandissuitedforveryaffluentclientswhowanttomaximizetheirfundvalues.SunULMaxoffersmorefundingcapacitythanSunULintheearlyyears.
Minimum and maximum insurance amount
TheminimuminsuranceamountforSunULis$100,000.
Theillustrationsoftwareisrestrictedto$10millionforissueagesuptoage80.Conversionquotesabove$10millioncanberequestedthroughheadoffice.
Minimum insurance amount changes
Inordertominimizeadministrativeexpenses,theminimuminsuranceamountincreaseallowedis$25,000.Forsimilarreasons,theminimuminsuranceamountreductionpermittedis$10,000.
Issue ages and rate classes
SunULisavailablefromissueages0through80onsmokerandnon-smokerrateclasses.Forjointlifebasicinsurancebenefit,however,eachinsuredpersonmustbebetweenages18and80.
Forjuvenilesage0through17,theguaranteedyearlyrenewabletermCOIoptionisavailableandissuedonasmokerrateclassbasis.Fromage18onward,ajuvenileinsuredpersoncanconverttotheguaranteedlevelCOIoptiononanattainedagebasis.Therateapplicablewillbebasedontheratesineffectatthetimeofconversion.
Onallnon-juvenilepolicies,aninsuredpersoncanchangefromthesmokerrateclasstothenon-smokerrateclassbycompletingaRequest for Change in Premium Rate Basis form.
Payment options
SunULallowsformonthlyorannualpayments.Anyadditionalpaymentswillbeconsideredlumpsumpaymentsandcanbemadeatanytime.Theeffectivedateofpaymentwillbethedatethatfundsarereceivedatourheadoffice.PolicyownersnotsetuponPre-AuthorizedChequing(PAC)canelecttoreceiveapaymentnoticeonanannualbasis.
Paymentscanstopatanytime,providedthepolicyfundvalueissufficienttokeepthepolicyinforce.Additionalpaymentsofanyamount(subjecttominimumpaymentrequirements)canresumeatanypointinthefuture.Thepolicyowner’schoiceofpaymentamountwillbeinfluencedbyhis/hergoalswithrespectto:
i) policyfundaccumulation,ii) deathbenefitoption,andiii) preferreddurationofpaymentperiod.
7 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Minimum payments
Theminimumlumpsumrequirementis$250.
TheminimumPACpaymentisthemonthlycostofinsuranceplusapplicableprovincialpremiumtax:
Where:
monthlycost = monthlycostofinsurance*
+ costofterminsurancebenefit/12
+ costofadditionalbenefits/12
*Monthlycostofinsurance = (AxB)x(1-insurancediscount)/12
A = theannualcostper$1,000ofinsurance
B = theinsuranceamountdividedby1,000
Activity account
WhenwereceiveapaymenttotheSunUniversalLifepolicy,theapplicableprovincialpremiumtaxisdeducted.Themoneyisthenaddedtotheactivityaccount.Fromthisaccount,moneyistransferredtopaythecostofinsuranceforallbasicinsurancebenefitsandadditionalbenefitsonamonthlybasis.Whentheactivityaccountbalancereachesaminimumof$250foreachofthechoseninvestmentaccounts,themoneywillbetransferredoutofthisaccountinaccordancewiththechoseninvestmentmix.
Interest calculation and guarantee
• Interestiscalculateddailyandcrediteddaily.• Theminimumguaranteedinterestratewillneverbelessthan90%oftheyieldona30-dayGovernmentof
CanadaTreasuryBillissuedthatday,less1.75%.Undernocircumstanceswilltheratebelessthan0%.
COST OF INSURANCE (COI) OPTIONS
CostofinsuranceisdeductedfromaSunULpolicyonamonthlybasis.ThecostisdeterminedbymultiplyingtheCOIrateper$1,000bythenetinsuranceamount,anddividingtheresultby12.
TwoCOIoptionsareavailable–guaranteedyearlyrenewabletermandguaranteedlevel.Bothareguaranteedforthelifeofthecoverage.Additionalinsurancepurchasedviatheindexeddeathbenefitoptionortokeepthepolicytax-exemptwillbeissuedonanattainedagebasis,attheCOIratesineffectatthetimeofpurchase.
Guaranteed yearly renewable term COI (YRT)
ThemoretraditionaluniversallifeCOIbasisisguaranteedyearlyrenewableterm.Eachyear,theCOIisbasedontheinsuredperson’sattainedageand,assuch,willincreaseastheinsuredgetsolder.
YRTCOIwillprovidethebestgrowthinshorttomid-termpolicyfundvalue,butlonger-termvalueswillbeverysensitivetopolicyfundvalueinvestmentreturnrates.
YRTCOIisnotavailableonissueagesover64.YRTCOIratesvarybyattainedage,sex,andrateclass.
Conversion to level
TheinsuredpersoncanconverttheinsuranceamountfromyearlyrenewabletermtolevelCOIafterthefirstpolicyyear.Theconversionmustbeonthepolicyanniversarynearesttheir18thbirthdayuptothepolicyanniversarynearesttheir81stbirthday.ThelevelCOIratewillbebasedonratesineffectatthetimeofconversion.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 8
Guaranteed level COI
Thisoptionisbasedontheinsuredperson’sissueage(notavailablebeforeage18)and,assuch,willnotchangeoverthelifeofthecoverage.
LevelrateswillbehigherthanYRTratesforthefirstseveralyears.Thismeansthatshorttomid-termpolicyfundvalueswillgrowmoreslowlyunderlevelthanunderyearlyrenewabletermCOI.
Conversion to yearly renewable term
LevelCOIcannotbechangedtoyearlyrenewabletermCOI.
LevelCOIratesvarybyissueage,sexandrateclass,andarefullyguaranteedforeachbasicinsurancebenefit.
Comparison of COI options
ThisgraphcomparesyearlyrenewabletermandlevelCOIforamalepreferrednon-smoker,age35.Inthisexample,theYRTCOIbeginstoexceedthelevelCOI21yearsintothepolicy.
CertaincriteriashouldbeconsideredwhenchoosingtheappropriateCOIoption:• Aclientlookingforgreatershort-termpolicyfund
valuewouldbebestservedbyinitiallychoosingtheYRTCOIoption.
• Aclientlookingforlonger-termvaluesmaybebestadvisedtochoosethelevelCOIoptionatissue,tobenefitfromlockingintoafullyguaranteedrateatayoungerage.
Runseveraldifferentillustrationstodeterminewhichscenariobestsuitsclient’sgoals.
Banded COI
TheCOIrates(underbothCOIoptions)varybyfaceamountband.VolumediscountspermitreductionsintheCOIastheinsuranceamountincreases.SunULoffersfiveCOIratebands:
BAND INSURANCE AMOUNT1* $50,000to$99,999(availableforconversiononly)
2 $100,000to$249,999
3 $250,000to$499,999
4 $500,000to$999,999
5 $1,000,000+
* Face amounts of $50,000-$99,999 are available for term conversions only, and only when converting the entire amount of the originating plan. Partial conversions of less than $100,000 are not permitted.
Iftheinsuranceamountisincreasedafterissue,causingthetotalinsuranceamounttomovetoahigherband,thecostofinsuranceapplicabletotheincreasewillbebasedonthoseforthenewband.
9 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Discounted COI
ThisfeatureisuniquetoSunUL,andisincludedonallpoliciesissuedpriortoNovember18,2005.ForpoliciesissuedafterNovember18,2005,thediscountCOIfeatureisonlyavailableonpolicieswithaninvestmentbonus.ThediscountonCOIrewardsthosepolicyownerswhoachieveacertainfundinglevel.
Thediscountinanypolicyyearisbasedontheinsuredperson’sage(issueageforlevelandattainedageforyearlyterm)andfundingratio.ThediscountgivenwillalsoincreaseasthefundingratiooftheSunULpolicyincreases.
Thediscountfactorsareguaranteedandthecurrentfactors,atsomesampleages,areshowninthechartbelow.Discountsareinterpolatedona“straightline”basisbetweenpoints.
Funding ratio discount table (%)
FUNDING RATIOAge 1.00 1.50 2.00 2.50 3.00+
0-50 0 5 10 15 20
55 0 3.75 7.5 11.25 15
60 0 2.5 5 7.5 10
65 0 1.25 2.5 3.75 5
70+ 0 0 0 0 0
Insurancediscountforeachbasicinsurancebenefitiscalculatedbythefollowingformula:
• Uptoage50:(Fundingratio-1)times10%.• Age51andup:Reducepercentageby0.5peryear.• Maximumfundingratiosusedintheinsurancediscountcalculationis3.0.
Foreachbasicinsurancebenefit,thefundingratiousedtocalculatethediscountisfullyvestedafterthe9thanniversaryofthatbasicinsurancebenefit.Fromthe10thanniversaryonward,thefundingratiousedtocalculatethediscountwillneverbelessthanthefundingratioachievedonthe9thbasicinsuranceanniversary.
Provincial premium tax
ApplicableprovincialpremiumtaxisdeductedfromeverypaymentmadeintoaSunULpolicy*.Theprovincialpremiumtaxisdeterminedbygovernmentlegislationandsubjecttochangeatanytime.CurrentasofApril2016.
Thepercentagethatisdeductedisasfollows:
PROVINCE/TERRITORY TAX RATE (%)
* No premium tax will be deducted from money transferred directly into the service account. However, premium tax will be deducted from monies being transferred from the service account into the policy.
Alberta 3.00
Newfoundland 4.00
NorthwestTerritories 3.00
NovaScotia 3.00
Nunavut 3.00
PrinceEdwardIsland 3.50
Saskatchewan 3.00
Quebec 3.30
Allothers 2.00
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 1 0
Payments less premium tax
ProvincialpremiumtaxwillbedeductedfrompaymentsmadeintoSunULpolicy.Moneyisthenaddedtotheactivityaccount.Percentagesselectedforeachinvestmentaccountmustbeinmultiplesof5%.AfteranyapplicableinsuranceCOIisdeducted,thebalancecanthenbeallocatedtotheclient’sdesiredinvestmentaccounts,providedthereisatleast$250foreachinvestmentaccountintheinvestmentmix(seeminimuminvestmentamountsonpage21).Theentireinvestmentmixcanbechangedatanytime,butthechangecannotbemaderetroactive.Atransactionfeemayapply.
Special direction of a payment
Thepolicyownercanalsodirectthefundsoraspecificpaymentinadifferentwaythanspecifiedintheinvestmentmix,ifawrittenrequestissenttous.
DEATH BENEFIT OPTIONS
AnotherexampleofSunUL’sflexibilityistheabilityofthepolicyownertochoosefromthefourdifferentdeathbenefitoptions.
1. Levelinsuranceamount2. Insuranceamountplusfund3. Fundbuilder4. Indexedinsuranceamount
Thefollowingexamplesassumeincreasingpolicyfundvaluestodemonstratethedifferenceindeathbenefitoptions.
LEVEL INSURANCE AMOUNT
Underthelevelinsuranceamountoption,thedeathbenefitisthegreaterofthebasicinsurancebenefitamountandpolicyfundvalue.Thecalculationofthecostofinsuranceisbasedonnetinsuranceamountatriskdefinedastheinsuranceamountlessthepolicyfundvalue.Thoseclientsthatdonothaveanincreasinginsuranceneedwouldbebestservedbythisoption.
INSURANCE AMOUNT PLUS FUND
Forthoselookingforincreasinginsuranceprotection,theinsuranceamountplusfundoptionwillbemoreappropriatethanthelevelfaceamountoption.Underthisoption,thepolicyfundvalueispaidupondeath,inadditiontotheinsuranceamount.Thenetinsuranceamountatriskforthisoptionremainsconstant.
1 1 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
FUND BUILDER
Fundbuilderisaninsuranceamountplusfunddeathbenefittypethatisdesignedtomaximizeyourpolicyfundvalue.Thetaxexemptmaintenancemethodforthisdeathbenefitis:toincreasetheinsuranceamountandreducebelowtheinitialbasicinsurancebenefit.Thisallowsthenetinsuranceamountatrisktobereducedtoaslowas$10,000andminimizethecostofinsurance.Reduction(s)totheinsuranceamountcanstartasearlyasyear5.Ayearlyrenewabletermcostofinsuranceisrequiredwiththisdeathbenefittype.Underthisoptionthepolicyfundvalueispaidondeath,inadditiontothenetinsuranceamountatrisk.Theinsuranceamountwillbeadjustedupwardstokeeppolicyfundsexemptandthenreducedwhenpossible.
INDEXED INSURANCE AMOUNT
Theindexedinsuranceamountoptionpermitsthebasicinsuranceamounttobeindexedfrom1to8%annuallyorattheCPIrate,andisavailableatissueages0through70.Thenetinsuranceamountatrisk–thedifferencebetweentheindexedbasicinsuranceamountandthepolicyfundvalue–willthereforenotbelevel,asshownbelow.Dependingonthegrowthrateofthepolicyfundvalueandtheindexratechosen,thenetinsuranceamountatriskcouldbeincreasingordecreasing.
INDEXING METHODS
Thepolicyownercanchoosebetweentwodifferentindexingmethods:
Consumer price index (CPI)
Startingonthefirstpolicyanniversary,theinsuranceamountwillbeindexedinproportiontotheannualchangeintheCPI.Withthisoption,thepolicyownerisassuredthattheultimateamountpaidatdeathwillretainthesamepurchasingpowerastheinsuranceamountdidatissue.
Fixed rate
Startingonthefirstpolicyanniversary,theinsuranceamountwillbeindexedbyafixedratechosenbythepolicyowneratissue.
ThepolicyownercanalsochangebetweenthefixedrateandtheCPImethod;however,evidenceofinsurabilitymayberequired.
Minimum indexing rates
Theminimumannualindexrateis0.00%undertheCPImethodand1.00%underthefixedratemethod.Thefixedratemustbeamultipleof0.25%.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 1 2
Maximum indexing rates
Underbothindexingmethods,themaximumannualindexrateis8.00%.Themaximumindexedinsuranceamountpermittedistwoandahalftimestheinitialinsuranceamount.
Period of indexing
Thepolicyownercannotdeclineaparticularannualincreasebutcanrequesttodeclineallfutureincreases.Unlesstheindexoptioniscanceled,theindexingwillcontinueuntilthepolicyanniversarynearesteachinsuredperson’s85thbirthday.
Changes to death benefit options
Apolicyownercanchangedeathbenefitoptionsortheindexrateatanytime,buttheinsuredpersonwillbeaskedtoprovideevidenceofinsurabilityiftheinsuranceamountorindexrateisincreased.Voluntaryincreasestotheinsuranceamountaresubjecttoaminimumof$25,000.
Theminimumvoluntaryinsuranceamountreductionis$10,000,however,thebasicinsurancebenefitcannotbereducedbelowtheminimuminsuranceamountallowed.
JOINT AND MULTIPLE LIFE COVERAGES
Joint life basic insurance benefit
SunULoffersjointfirst-to-die,jointlast-to-die,andjointlast-to-diewithanearlydeathbenefitoption.
Joint first-to-die
Jointfirst-to-diebasicinsurancebenefitisavailableonuptofivelives.Uponthefirstdeathofaninsuredperson,adeathbenefitispaidtoabeneficiaryandthebasicinsurancebenefitexpires.Eachsurvivorofthejointbasicinsurancebenefitwillbeprovidedwith31daysoffree,convertibleterminsuranceforaninsuranceamountequaltotheinsuranceamountoftheoriginaljointbasicinsurancebenefit.
Joint last-to-die
Jointlast-to-diebasicinsurancebenefitisavailableontwolivesonly.
Joint last-to-die with an early death benefit
Earlydeathbenefitisavailablewhenajointlast-to-diebasicinsurancebenefitwithaninsuranceamountplusfundorfundbuilderdeathbenefitoptionischosen.
Early death benefit
Thepolicyfundvalueofajointlast-to-diebasicinsurancebenefitispayabletothebeneficiary(s)onthefirstdeathwhentheinsuranceamountplusfundorfundbuilderdeathbenefitoptionisselected.Alljointlast-to-diepoliciesissuedonorafterApril3,2002areeligiblefortheearlydeathbenefit(EDB),however,thepercentageisinitiallysettozeroatissue.Theownercanchangethepercentage(inmultiplesof5%,upto100%maximum)atanytimepriortothefirstdeathbysubmittingwrittennotificationortheearlydeathbenefitbeneficiaryelectionand/orthepolicychangeform.
1 3 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
ThetotalamountoftheEDBpayoutonfirstdeathwillbeequaltotheresultofthisformula,calculatedasofthedateofnotification:
(A)x(B-C)
where:
A–istheearlydeathbenefitpercentageasspecifiedbytheownerforthedeceasedinsuredperson
B–isthepolicyfundvalue
C–isthepolicyloanswithinterest
TheEDBforabasicinsurancebenefitwillremainineffectaslongas:
i) theinsuredpersonisnotcoveredasasinglelifeunderthesamemultiplelifepolicy,andii) thejointlast-to-diebasicinsurancebenefitwithwhichthisbenefitwasissuedremainsin-force,andiii) thedeathbenefitoptionisandremainsInsuranceamountplusfundorfundbuilder.
AseparatepercentageofEDBpayoutandbeneficiarycanbeselectedforeachinsuredperson.
Eachinsuredpersonmustbeage80orloweratissue,andwereservetherighttoexcludeEDBonjointlast-to-diepolicieswhereoneorbothinsuredpersonsarehighsubstandardrisks.
Nosurrenderchargesormarketvalueadjustment(MVA)willbeappliedtothepayout.
NoEDBispayableonsimultaneousdeathsoftheinsuredpersonscoveredunderthejointlast-to-diebasicinsurancebenefit.
TheserviceaccountwillnotformapartoftheEDBpayout.
EDBpayoutsaresubjecttotaxationlegislationatthetimeofpayment.Anyelectionchangeafterissueissubjecttoourthencurrentrulesandpractices.
WhenEDBisusedonajointbasicinsurancebenefitinamultiplelifepolicy,thisbenefitwilloverrideanyotherpolicyfundallocationspecifiedforthesameinsuredpersoninthepolicy.ThebenefitpayableatthedeathoftheinsuredpersonwillbereducedbytheamountofEDBpayout.IfaclaimismadefortheEDBandabasicinsurancebenefitanditisimpossibletodeterminewhichoftheinsuredpersonsunderthepolicydiedfirst,theoldestoftheinsuredpersonswillbedeemedtohavediedfirst.
Adding or removing a life – joint
Aninsuredpersoncanbeaddedtoanyfirst-to-diebasicinsurancebenefit,providedthattherequiredevidenceofinsurabilityismet.Aninsuredpersoncanberemovedorsubstitutedonanyjointbasicinsurancebenefit,providedthatthepolicyisnotunderawaiverandthatanynewinsuredpersonprovidestheappropriateevidenceofinsurability.Whenajointbasicinsurancebenefitinamultiplelivespolicyisdropped,theinsurancefactordoesnotchangeandallsurrenderchargesofthatjointbasicinsurancebenefitremainineffect.Theequivalentjointageofthenewjointbasicinsurancebenefitwillbebasedontheattainedagesoftheinsuredpersonsinvolvedonthedateofthesubstitution,additionorremoval.Insomecases,thiscouldbeconsideredadispositionofthepolicyandcouldresultintaximplications.
Multiple lives coverage
Thisfeatureallowsmorethanonepersontobeinsuredunderthesamepolicy.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 1 4
Coverage and options
Currently,uptofivebasicinsurancebenefitscanbecombinedintooneSunULpolicy,andoneofthemcanbeajointbasicinsurancebenefit.Thepolicyowner(s)canassignaseparatebeneficiarytoeachdeathbenefitinthepolicy.Aninsuredpersoncouldbecoveredbybothasingleandajointbasicinsurancebenefitwithinthemultiplelivescoverage.
UnderaSunULpolicy,eachinsuredpersonmustsatisfytheminimuminsuranceamountrequirement.AllinsuredpersonsmustchoosethesamedeathbenefitoptionbuteachcanchoosetheirownCOIoption.
Uponthedeathofanyinsuredperson,hisorherdeathbenefitwillbepaidtothebeneficiaryandthepolicywillcontinuewiththeremaininginsuredpersons.
Calculation of insurance factor
EachbasicinsurancebenefithasanassociatedinsurancefactoranditisthesumofallinsurancefactorsthatisusedtocalculatetheCOIdiscountforeachbasicinsurancebenefitandtheinvestmentbonusforthepolicy.
Adding or removing a life – multiple coverage
Aninsuredpersonmayberemoved,addedorsubstitutedonanymultiplelivespolicy,providedthenewinsuredpersonsubmitstheappropriateevidenceofinsurability.Whenaninsuredpersonisdropped,theinsurancefactordoesnotchangeandallsurrenderchargesofthatinsuredpersonremain.Whenalifeisadded,anewinsurancefactorisdeterminedforthatinsuredperson,alongwithanewscheduleofsurrenderchargesandcommissions.Insomecases,thiscouldbeconsideredadispositionofthepolicyandcouldresultintaximplications.
Split of policy fund value
Inthecaseofmultiplelivespolicieswiththedeathbenefitoptioninsuranceamountplusfund,thepolicyownermustchooseanallocationmethodforthepolicyfundvalueatissue;thismethodcanbechangedafterissueforafee.Inaddition,thepolicyfundvaluemustbeallocatedtotheinsuredpersonsforthecalculationofthenetinsuranceamount.
Threetypesofpolicyfundvalueallocationsarepossible:
1. proportionaltotheinsuranceamount,2.payableonthefirstdeathclaim,or3. payableonthelastdeathclaim.
ForpoliciesissuedonorafterApril3,2002:
Whenthefullorpartialfundvalueisincludedinadeathclaimsettlement,withdrawalsaremadeandvaluedasoftheendofthedateofnotification.Itwouldbeimperativetogivenoticeinatimelyfashionbecausethegrowthinthefundvalueportionofthedeathbenefit,betweenthedateofdeathanddateofnotification,canbesubjecttotaxation.
Ifthereisanearlydeathbenefitpayableatthetimeofdeathclaimsettlement,thepolicyfundvaluewillbereducedaccordingly.
Policy fund value proportional to insurance amount
Underthisoption,eachinsuredpersonwillhaveanallocatedpolicyfundvalueproportionatetotheinsuranceamount.Thisallocationmethodisavailableonanydeathbenefitoption.Thenetinsuranceamountforeachinsuredperson,underthelevelinsuranceamountandindexedinsuranceamountoptions,isthedifferencebetweenthebasicinsurancebenefitamountandtheallocatedpolicyfundvalue.
Ifaninsuredpersonissubstitutedoraddedtothepolicy,thepolicyfundvaluewouldbere-allocatedinproportiontothenewinsuranceamount.Ifaninsuredpersonisremoved,thepolicyfundvaluewillbere-allocatedtotheremaininginsuredpersons.
1 5 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
POLICY FUND VALUE PAYABLE ON DEATH CLAIM
Policy fund payable on the first death claim
Underthisoption(whichisonlyavailableontheinsuranceamountplusfunddeathbenefitoption),theentirepolicyfundvalueispaidoutonthefirstdeathclaimofaninsuredperson.Anadditionalpaymentmayberequiredtopayformonthlycostofinsuranceandtocoverremainingsurrendercharges.
Policy fund payable on the last death claim
Thisoptionisonlyavailableontheinsuranceamountplusfunddeathbenefitoption.Itpaysouttheentirepolicyfundvalueonthelastdeathclaimoftheinsuredpersons.
INVESTMENT ACCOUNTS
Perhapsthemostuniqueandattractivefeatureofauniversallifeproductistheabilityofthepolicyownertochoosethetypeofvehicleinwhichthepolicyfundvaluewillbeinvested.Thisisparticularlyattractiveforthosewhowanttocontroltheinvestmentmix,ratherthanhavetheinsurancecompanydecideontheinvestmentmix,asisofferedwiththemoretraditionalparticipatinglifeinsuranceproducts.
WithSunUL,thepolicyownercaninvestthepolicyfundvalueinanycombinationofadailyinterestaccount(DIA),avarietyofguaranteedinterestaccounts(GIAs),severalaccountsbasedontheperformanceofindicesandanumberofaccountsbasedontheperformanceofmanagedfunds.Thechoiceofinvestmentaccountswilldependuponthepolicyowner’slevelofrisktolerance.TheSunULInvestorProfileQuestionnairewillhelpclientsdeterminetheappropriateinvestmentmixtomeettheirgoals.
Daily interest account (DIA)
Thisdailyinterestaccountisaninvestmentoptionselectedbytheclient.Itoperatesthesameasanyoftheotherinvestmentaccountsandrequiresaminimumamountof$250toopen.
Interest calculation and guarantee
• Interestiscalculateddailyandcrediteddaily.• Theminimumguaranteedinterestratewillneverbelessthan90%oftheyieldona30-dayGovernment
ofCanadaTreasuryBillissuedthatday,less1.75%.TheabsoluteminimuminterestratefortheDIAis0%perannum.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 1 6
Guaranteed interest accounts (GIA)
Guaranteedinterestaccounts(GIAs)areavailablefor1-,3-,5-,10-and20-yeartermstomeetpolicyowner’sshort-,medium-andlong-termsavingsneeds.AtaGIA’smaturity,thebalanceisrolledintotheactivityaccount,unlessthepolicyownerrequeststohaveitrollovertoanewaccountofthesameterm.Interestiscrediteddailyandcompoundedannually.
Interest calculation and guarantee
• Theminimumguaranteedinterestratewillneverbelessthan90%oftheeffectiveannualyieldonGovernmentofCanadaBondswiththesametermandeffectivedateastheGIA,less1.75%perannum.
• ThepolicyownerisalsoguaranteedthattheycanneverlosetheirprincipalinaGIA.Theabsoluteminimumguaranteedinterestratesare0%forthe1-and3-yearterms,0.5%forthe5-yearterm,and1.5%forthe10-and20-yearterms.
Market value adjustment (MVA)
IffundsarewithdrawnfromtheGIAs,anMVAmayapply.Generally,ifaGIAisredeemedpriortoitsmaturityandcurrentinterestratesfortheparticulartermaccounthaveincreased,anMVAwillapply.AnMVAdoesnotapplytoamountstakenfromtheindexaccountsorontransfersintothepolicyfromtheserviceaccount.
TheMVAappliestowithdrawals,policyloans,ortransfersfromaGIA,exceptontransfersrequiredtopayformonthlycostofinsuranceortomaintainthepolicy’stax-exemptstatus.WithdrawalsfromtheGIAswillstartwiththeaccountclosesttomaturity.AnMVAwillnotapplytothepaymentofthepolicyfundvalueuponthedeathoftheinsuredperson.
TheMVAformulacanonlyresultinadecreaseinthevalueofthewithdrawal,i.e.nocreditswillbegiven.
MVA formula
The MVA formula for guaranteed interest account (GIA):TheMVA=Wx{1-thelesserof1and[(1+J)D÷(1+K)D]}where:
W = amountwithdrawnortransferredfromtheGIAlayerD = numberofdaystomaturityintheexistingGIAlayerdividedby365J = actualinterestratefortheexistingGIAlayer,excludinganyinvestmentbonusK = currentinterestrateforanewGIAlayerwiththesametermastheexistingGIA
Accounts based on the performance of indices
Interestforeachaccountiscalculateddailyandcrediteddaily.Theseaccountsreflecttheperformanceoftheindicesonwhichtheyarebased.Sincetheunderlyingindicescanincreaseordecrease,theapplicableinterestratecanbepositiveornegative.
Whenclientsselecttheseaccounts,theydonotacquireaninterestinthedesignatedmarketindexorpurchaseanyunitsorlegalinterestinanysecurity.
WewillmaintaintheindexaccountswhicharebasedontheCanadianandAmericanequitymarketsandtheCanadianbondmarketandwewillmaintainthemanagementfeesforthoseaccountsasoutlinedunlessafterthepolicydatethereisamaterialchangein:
• theinvestmentenvironmentformonitoringandreplicatinganindexaccount,or• thelegislationthatappliestolifeinsurancepoliciesthathaveaccountsbasedon
theperformanceofindices.
1 7 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Available Index Accounts
• AmericanEquity• AmericanTechnology• CanadianBond• CanadianEquity• EuropeanEquity• ForeignEquity• JapaneseEquity• PacificEquity• FPX*Balanced• FPX*Growth• FPX*Income
Seeaccountfactsheetsforfurtherinformationontheunderlyingindicesandhistoricalperformanceratesofreturn.
* FPX is a trademark of The National Post Company. SunUniversalLife is not endorsed, sold or promoted by the National Post Company.
INTEREST GUARANTEES
Themanagementfeevariesdependingontheinvestmentoptionselectedandwillvarydependingonwhethertheinvestmentbonuswasselected.ThemanagementfeeforeachIndexaccountusedintheinterestguaranteecalculationsoutlinedbelowisshownintheinvestmentbonusandtheinvestmentaccountmanagementfeesandinterestratessections.Interestratescanbenegative.
Thedailyinterestratethatappliestoeachoftheindexaccountswillbe:
FPX Income Index Account
100%ofpercentagedailychangeintheFPXIncomeTotalReturnIndex(aFinancialPostindex)minusamanagementfee.
FPX Balanced Index Account
100%ofpercentagedailychangeintheFPXBalancedTotalReturnIndex(aFinancialPostindex)minusamanagementfee.
FPX Growth Index Account
100%ofpercentagedailychangeintheFPXGrowthTotalReturnIndex(aFinancialPostindex)minusamanagementfee.
Canadian Equity Index Account
100%ofthepercentagedailychangeintheStandard&Poor’sTorontoStockExchange(S&P/TSX60)TotalReturnIndex,minusamanagementfee.
American Equity Index Account
100%ofthepercentagedailychangeintheCanadiandollarvalueoftheStandard&Poor’s500(S&P500)TotalReturnIndex,minusamanagementfee.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 1 8
Foreign Equity Index Account
100%ofthepercentagedailychangeintheCanadiandollarvalueoftheMorganStanleyCapitalInternationalEuropeAustralasiaandFarEast(MSCIEAFE)FreePriceIndex(excludingdividends),minusamanagementfee.
European Equity Index Account
100%ofthepercentagedailychangeintheCanadiandollarvalueoftheMorganStanleyCapitalInternational(MSCI)EuropePriceIndex(excludingdividends),minusamanagementfee.
Pacific Equity Index Account
100%ofthepercentagedailychangeintheCanadiandollarvalueoftheMorganStanleyCapitalInternational(MSCI)PacificFreePriceIndex(excludingdividends),minusamanagementfee.
Japanese Equity Index Account
100%ofthepercentagedailychangeintheCanadiandollarvalueoftheNikkei225Index(includingthedividendspaidontheunderlyingstocks),minusamanagementfee.
American Technology Index Account
100%ofthepercentagedailychangeintheCanadiandollarvalueoftheNASDAQ100Index(includingthedividendspaidontheunderlyingstocks),minusamanagementfee.
Canadian Bond Index Account
100%ofthepercentagedailychangeintheFTSETMXCanadaUniverseBondIndex,minusamanagementfee.
Accounts based on the performance of managed funds
Interestforeachmanagedaccountiscalculateddailybasedontheperformanceofthemutualfundtheaccountislinkedto.Performancefluctuatesandinterestcanbepositiveornegative.AllmanagedaccountsareaffectedbyboththeperformanceofitsdesignatedfundandfluctuationsinthevalueoftheCanadiandollarcomparedtotheappropriateforeigncurrency,whereapplicable.
Whenclientsselecttheseaccounts,theydonotacquireaninterestinthedesignatedfundorpurchaseanyunitsorlegalinterestinanysecurity.
Thedailyinterestratethatappliestoeachmanagedaccountwillbe:
• thepercentagedailychangeintheCanadiandollarvalueofitsdesignatedfund,minustheSunUniversalLifemanagementfeeforthataccount.
• Themanagementfeewillbedifferentdependingonwhetherthecustomerchosetohaveaninvestmentbonusornot.
ManagedaccountsallowclientstodiversifytheirinvestmentsinsidetheirSunUniversalLifepolicy.Thesemutualfundsandtheirindustryleadingmanagershavebeenchosenbasedonabroadselectionofmanagementstylesandassetclasses:bonds/income,Canadianequity,Canadianbalanced,USequity,international/globalequity,aswellasassetallocationorportfoliofunds.
Withthemanagedaccountoptionsclientscanchoosetobuildtheirownportfolioor,ifpreferred,chooseaccountsbasedonmutualfundswithassetallocationandportfolioselectionsdesignedandmonitoredbyinvestmentprofessionals.
SunUniversalLifealsooffersmanagedaccountswithinterestbasedontheperformanceofmutualfundsmanagedbyinstitutionalfundmanagers.Theinvestmentrequiredtoaccesstheseinstitutionalfundsmeansmostinvestorswouldnothaveaccesstothesefundmanagersonanindividualbasis.
1 9 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Managed account options
• CICanadianInvestment• CIGlobal• CIHarbour• CIHarbourGrowth&Income• CIPortfolioSeriesBalanced• CIPortfolioSeriesBalancedGrowth• CIPortfolioSeriesConservative• CIPortfolioSeriesConservativeBalanced• CISignatureHighIncome• CISignatureIncome&Growth• CambridgeAmericanEquityCorporateClass• FidelityGlobalFidelity• U.S.FocusedStockFund
• FidelityNorthStar®• FidelityTrueNorth®• MackenzieCundillCanadianBalanced• MackenzieCundillValue• MackenzieIvyForeignEquity• SunLifeMFSUSEquity• SunLifeMFSBalancedGrowth• SunLifeMFSCanadianEquityValue• PHNBalanced• PHNBond• PHNCanadianEquity• PHNDividendIncome
Moreinformationonthemanagedaccountoptions,assetclassandmanagementstyleaswellastheguaranteedinterestaccountsandindexaccountsisavailableontheSunUniversalLifeInvestmentaccountfactsheets,andtheInvestmentaccountoptionsbooklet.
Wemayneedtorename,mergeorwithdrawamanagedaccount.Thismayoccurbecauseofchangesintheunderlyingmutualfundoritsmanagement.
Ifwewithdrawanaccountinwhichaclienthasabalance,wewillprovideinformationonotheraccountsavailableintowhichaccountbalancesmaybedirected.
Minimum investment amounts
AnimportantfeaturetorememberwithSunUListheminimumtransferthreshold.Currently,theminimumtransferthreshold,otherthantheactivityaccount,is$250.Iftheinvestmentmixcontainsmorethanoneinvestmentaccount,thepaymentmustbelargeenoughsothateachinvestmentmixpercentageequatestoatleast$250.Oncethatminimumamountisreached,thepolicyfundswillautomaticallybedispersedinaccordancewiththeinvestmentmix.
Forexample,ifapolicyownerwishestoplace5%inanyparticularaccount,anetpaymentof$5,000($250/5%)willberequiredbeforethenewaccountcanbeopened.Iftheminimumopeningbalanceisnotmetforeachandeveryinvestmentaccount,allofthepolicyfundswillbeleftintheactivityaccountuntileachminimumbalancehasbeenachieved.
Smallpercentagesshouldbeavoidedifthepaymentsarenotsubstantial,torefrainfromkeepingfundsintheactivityaccountforlongperiodsoftime.
Investment account asset class and management fee
Themanagementfeeandassociatedminimuminterestrateusedintheinterestguaranteecalculationforaparticularinvestmentaccountisdependentonwhetherthepolicyownerhasselectedtohaveaninvestmentbonusonthepolicyorchosennottohavethebonus.
Theassetclass,managementstyle,managementfeesandguaranteedminimuminterestrates(ifapplicable)foreachinvestmentaccountareshownonthepagesthatfollow.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 2 0
FIXED INCOME OPTIONS
Dailyinterestaccount(DIA) • Interestearnedbasedon90%of30-dayGovernmentofCanadaT-Bills.• Noinvestmentbonusoptioncurrentlyprovidesaninterestrateincreaseof
0.40%tothecreditedrate.Thisinterestrateincreasemaychange.
Guaranteedinterestaccounts(GIAs)
• Interestearnedbasedon90%ofGovernmentofCanadabondsofthesameduration.
• Noinvestmentbonusoptioncurrentlyprovidesaninterestrateincreaseof0.40%tothecreditedrate.Thisinterestrateincreasemaychange.
• Guaranteedminimuminterestratesof:
•1-yearGIA:0%•3-yearGIA:0%•5-yearGIA:0.5%•10-yearGIA:1.5%•20-yearGIA:1.5%
Index account options1 Asset class
Management style
Sun UL management fee with bonus
Sun UL management fee with no bonus
AmericanEquity USequity N/A 3.00 2.00
AmericanTechnology
USequity N/A 3.00 2.00
CanadianBond Bond/income N/A 3.00 2.00
CanadianEquity Canadianequity N/A 2.75 1.75
EuropeanEquity International/globalequity N/A 2.00 1.00
ForeignEquity International/globalequity N/A 2.00 1.00
JapaneseEquity International/globalequity N/A 3.25 2.25
PacificEquity International/globalequity N/A 3.00 2.00
FPXBalanced Canadianbalancedequity N/A 3.20 2.20
FPXGrowth Canadianbalancedequity N/A 3.40 2.40
FPXIncome Bond/income N/A 2.80 1.80
1 Minimum rate of return is based on Canadian dollar values of the indices, and the contractual guaranteed minimums stated apply to Canadian policies only.
2 1 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Managed account options2 Asset class
Management style
Sun UL management fee with bonus
Sun UL management fee with no bonus
CIPortfolioSeriesBalanced
Assetallocation Assetallocation 1.00 0.00
CIPortfolioSeriesConservative
Assetallocation Assetallocation 1.00 0.00
CICanadianInvestment
Canadianequity Value 1.00 0.00
CIGlobal International/globalequity
Growth 1.00 0.00
CIPortfolioSeriesBalancedGrowth
Assetallocation Assetallocation 1.00 0.00
CIPortfolioSeriesConservativeBalanced
Assetallocation Assetallocation 1.00 0.00
CIHarbour Canadianequity Blend 1.00 0.00
CIHarbourGrowth&Income
Canadianbalanced Blend 1.00 0.00
CISignatureHighIncome
Bond/income Blend 1.25 0.25
CISignatureIncome&Growth
Canadianbalanced Blend 1.00 0.00
CambridgeAmericanEquityCorporateClass
USequity Blend 1.00 0.00
FidelityU.S.FocusedStockFund
USequity Blend 1.00 0.00
FidelityGlobal International/globalequity
Blend 1.00 0.00
FidelityNorthStar® International/globalequity
Blend 1.00 0.00
FidelityTrueNorth® Canadianequity Blend 1.00 0.00
MackenzieCundillCanadianBalanced
Canadianbalanced Value 1.00 0.00
MackenzieCundillValue
International/globalequity
Value 1.00 0.00
MackenzieIvyForeignEquity
International/globalequity
Blend 1.00 0.00
SunLifeMFSUSEquity
USequity Blend 2.15 1.15
SunLifeMFSBalancedGrowth
Canadianbalanced Growth 2.15 1.15
SunLifeMFSCanadianEquityValue
Canadianequity Value 2.15 1.15
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 2 2
Managed account options2 Asset class
Management style
Sun UL management fee with bonus
Sun UL management fee with no bonus
PHNBalanced Canadianbalanced Growthatareasonableprice(GARP)
2.15 1.15
PHNBond Bonds/income Bond 2.15 1.15
PHNCanadianEquity Canadianequity Growthatareasonableprice(GARP)
2.15 1.15
PHNDividendIncome Canadianequity Growthatareasonableprice(GARP)
2.15 1.15
2 Initially available on policies issued November 18, 2005 or later.
Investment bonus for policies issued prior to November 18, 2005
ASunULpolicywillpayaninvestmentbonusequaltoagivenpercentagetimestheinterestearnedinthevariouspolicyfundaccounts,overthe60monthsimmediatelyprecedingthebonuspayout.Thisbonusispaidonthetenthpolicyanniversaryandreoccursoneveryfifthanniversarythereafter.Thebonusinterestwillbeaddedtotheactivityaccount.Theinvestmentbonuspercentageis10%ifthecorrespondingfundingratioislessthan2.0and20%forafundingratioequaltoorexceeding2.0.
Investment bonus for policies issued November 18, 2005 or later
Thepolicyownerhastochooseatthetimeofsalewhethertohaveaninvestmentbonusornot.Thiscannotbechangedwithinthesamepolicyafterissue.Thechoiceinfluencesthepolicyowner’slong-terminvestmentandwealthmanagement.
Choosingtohaveabonusrewardsthepolicyownerfor:
• keepingthepolicyineffect,and• makingadditionalpaymentsintothepolicy.
Ifabonusischosen,thepolicyownerwillalsoreceivetheCOIdiscount–seeDiscountedCOIonpage9.
Beginninginyear2,thebonuspays0.40%annuallyonthepolicyanniversary,basedontheaverageofthemonthlyaveragetotalpolicyfundvalueinthepreceding12months.Thetotalpolicyfundvalueisnetofloansandaccruedloaninterest.Thebonusdoesnotapplytoserviceaccountvalue.Thebonusisaddedtotheactivityaccount.
Ifthepolicyownerchoosesnottohaveaninvestmentbonus,therearelowermanagementfeesontheindexandmanagedaccountsandhighercreditedinterestratesfortheguaranteedinterestaccounts.Thisresultsinahighercreditedrateofinterestandmoreimmediategrowthinthevalueoftheaccounts.Thisisanoptionthatisappealingtopolicyownerswholiketokeepmanagementfeestoaminimum.
ChoosingnottohaveaninvestmentbonusmeansthepolicyisalsonoteligiblefortheCOIdiscount.
PleaseseetheInvestmentaccountassetclassandmanagementfeesectiononpage21forthemanagementfeesthatapplytoinvestmentaccountswhentheinvestmentbonusisselected.
2 3 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
TAXATION
TaxationoftheSunULinsurancepolicyandvariousfeaturesofferedwithinthepolicyarebasedonthetaxrulesintheIncomeTaxAct(Canada)astheyrelatetolifeinsurancepolicies.Theserulesmaychangeatanytime,andadministrationofthepolicyanditsfeatureswillchangewhererequiredbasedonthoserules.
SunULisatax-exempt,non-registeredlifeinsurancepolicy.ThemaximumpaymentpermittedtoaSunULpolicyhasbeensettoensurethatthepolicyretainsitsexemptstatus.Inadditiontotestingeachpaymenttothemaximumpermitted,testingwillbeperformedateachanniversarytoseeiftheSunULpolicyremainsexempt.IfaSunULpolicyisabouttobecomenon-exemptduetoanexcessivepolicyfundvalueinrelationtothedeathbenefit,thepolicyownerwillhavethefollowingoptionsavailabletokeepthepolicyexempt.Eachpolicyowner,atissue,mustchoosebothanexemptinsuranceamountadjustmentandanexemptpolicyfundadjustment.
Maintaining the exempt status by insurance amount adjustments
Ateachpolicyanniversary,acomparisonofthepolicyfundvalueismadetothetax-exemptlimit.Ifthepolicyfundvalueexceedsthetax-exemptlimit,wemakeanadjustmenttoyourclient’spolicy,accordingtothemethodselected.
Fourtypesofinsuranceamountadjustmentsareavailable:
i) retaintheinsuranceamount(deathbenefitisnotautomaticallyincreased);ii) increasethedeathbenefitbyupto8.0%*(thedefaultoption);iii) increasethedeathbenefitbyupto8.0%*andthenreverse,whenpossible,totheinitialinsurance
amountatissue;oriv) increasethedeathbenefitbyupto8.0%*andthenreverse,whenpossible,tobelowtheinitial
insuranceamountatissue.Thiswilloptimizethegrowthofthepolicyfundvalue.Thisoptionisonlyavailablewithafundbuilderdeathbenefit.
*Themaximumdeathbenefitisthelesserof:
a) Twoandahalftimestheinitialinsuranceamountandb) ourretentionlimit.
COIfortheincreaseddeathbenefitaredeterminedonanattainedagebasis(orattainedequivalentjointageforjointlifebasicinsurancebenefit)andthecurrentrateseriesineffect.
Non-exempt policy fund adjustments
Anynon-exemptpolicyfundsaccruingunderaSunULpolicycanbedirectedasfollows:
i) automaticallydirectedtotheserviceaccount(thedefaultoption),orii) paidincashtothepolicyowner.
Thesetransactionsareconsidereddispositionsandmayresultintaxableincometothepolicyowner.
Service account
Theserviceaccountisanon-exemptsidefundattachedtoaSunULpolicy.Atissue,thepolicyownercanchoosewhethertoinvestanyfutureserviceaccountbalanceintheDIA,arangeofGIAs,oneof11accountsbasedonperformanceofindicesoroneof25accountsbasedontheperformanceofmanagedfunds.
AsroombecomesavailablewithinthetaxexemptportionofaSunULpolicy,fundsintheserviceaccountwillautomaticallybetransferredintothepolicy,tothemaximumextentpossible.ThesetransfersaredonewithoutanyMVAs.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 2 4
OntheterminationofaSunULpolicy,thebalanceintheserviceaccount,ifany,willbepaidtothepolicyowner(orestate,ifterminationisduetodeath).Serviceaccountfundsarenotpaidtax-freetothebeneficiary.
Nopremiumtaxwillbedeductedfrommoneytransferreddirectlyintotheserviceaccount.However,premiumtaxwillbedeductedfrommoniesbeingtransferredfromtheserviceaccountintothepolicy.Theminimumpaymentapolicyownercanmakeintotheserviceaccountofthepolicyis$250.However,transfersbetweentheserviceaccountandthepolicyfundvalue(fortax-exemptpurpose)arenotsubjecttoanyminimum.
Forincometaxpurposes,theinterestearnedontheserviceaccounteachpolicyyear,willbereportedtothepolicyownerattheendofeachcalendaryear.
ADMINISTRATIVE INFORMATION
Withdrawals
EasyaccesstothepolicyfundvalueisanotherattractivefeatureofaSunULpolicy.
Awithdrawalreferstoapolicyowner’srequestforfunds.Thisdoesnotincludepaymentofmonthlycostofinsurancefromthepolicyfund.Awithdrawalwillbeconsideredapartialdispositionofthepolicyandmayresultintaxableincometothepolicyowner.
Theminimumwithdrawalamountis$500andthemaximumisthecashsurrendervalue(CSV).Awithdrawalwillcauseareductioninthedeathbenefitbytheamountofthewithdrawal.Forthelevelinsuranceamountandindexedinsuranceamount,awithdrawalwilldecreasethemostrecentinsuranceamountpurchased.SurrenderchargeswillapplytotheamountwithdrawnonlyiftheresultingCSVdropstozero.Marketvalueadjustmentscouldalsoapply.
Order of investment account withdrawals and transfers
Thepolicyownermustchooseoneofthreewithdrawalorderoptionsatissue(ontheapplication).Onceanorderhasbeenchosen,itcannotbechanged.Theabilitytochoosewherewithdrawalsaremadewillallowthepolicyownertoconcentrateinvestmentsinhis/herpreferredinvestmentoption.Ifthemainfocuslieswithequitybasedinvestmentaccountsduetopotentialforhigherratesofreturninagivenperiod,thepolicyownermaywanttoplaceenoughmoneyintoGIAstocoverinsurancecostsandselectthealternatewithdrawalorderoption.Thiscouldleavepolicyfundsinequity-basedindexandmanagedaccountstogrowundisturbedbymonthlycostofinsuranceuntilallGIAshavebeenexhausted.Iftheclient’spreferenceistokeepinvestmentsinGIAsuntoucheduntilrequiredtopayforthecostofinsurance,thestandardordermaybetheanswer.
Theproportionalorderallowstheclienttomorecloselykeeptheinvestmentmixbetweenaccountsconstantbytakingaportionfromeachaccountonwithdrawal.
Note:unlessselectedotherwise,theproportionalorderisthedefault.Thewithdrawalordercannotbechangedafterpolicyissue.
2 5 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Standard Alternate Proportional (default)
DIA DIA DIA
FPXIncomeIndex GIA1-,3-,5-,10-&20-year(closesttomaturity)
ProportionalfromGIA1-,3-,5-,10-&20-year,fromindexaccountsandfrommanagedaccounts–basedonaccountvalueineachattimeofwithdrawal
FPXBalancedIndex FPXIncomeIndex
FPXGrowthIndex FPXBalancedIndex
CanadianEquityIndex FPXGrowthIndex
AmericanEquityIndex CanadianEquityIndex
ForeignEquityIndex AmericanEquityIndex
EuropeanEquityIndex ForeignEquityIndex
PacificEquityIndex EuropeanEquityIndex
JapaneseEquityIndex PacificEquityIndex
AmericanTechnologyIndex JapaneseEquityIndex
CanadianBondIndex AmericanTechnologyIndex
Managedaccounts–proportionalbasedonaccountvalue
CanadianBondIndex
GIA1-,3-,5-,10-&20-year(Closesttomaturity)
Managedaccounts–proportionalbasedonaccountvalue
Surrender charges
AsurrenderchargeforaparticularbasicinsurancebenefitunderaSunUniversalLifepolicywillcontinuetoapplyuntiltheearlierofthe10thanniversaryofthatbasicinsurancebenefit,whetherornotthatbasicinsurancebenefitremainsineffect,andtheterminationofthepolicy.
Thesurrenderchargeisamultipleofthebasicinsurancebenefit’sinsurancefactorandcanneverexceedthepolicyfundvalueavailable.Thesurrenderchargemultiplesforeachpolicyyearareillustratedinthechartbelow.
Number of years in-force
Surrender charge multiple
SunUniversalLife SunUniversalLife Max
1 1 2
2 2 4
3 3 4
4 3 4
5 3 4
6-8 3 3
9 2 2
10 1 1
11+ 0 0
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 2 6
ThefollowingexampleshowstheCSVofSunUniversalLife,iftheinsurancefactoris$200.
TheexampleassumestherearenoMVAsorpolicyloans.
Policy year Policy fund value - Surrender charge = CSV
1 100 200 0
2 400 400 0
3 900 600 300
4 1,500 600 900
5 2,200 600 1,600
6 3,400 600 2,800
7 4,100 600 3,500
8 5,500 600 4,900
9 7,100 400 6,700
10 9,100 200 8,900
11 12,200 0 12,200
DuringthefirstpolicyyearthesurrenderchargemultiplewillalwaysbeoneforSunUniversalLifeandtwofor SunUniversalLife Max.Onadateotherthanapolicyanniversary,thesurrenderchargemultiplewillbeapro-ratavaluebasedonthenumberofwholemonthsin-forcebetweenpolicyanniversaries.Thisinterpolationwillapplybetweenthefirstand10thpolicyyears.Forexample,iftheclientsurrendersthepolicyatpolicyyearnineplussixmonths,thesurrenderchargeintheaboveexamplewouldbe$300.
Exceptforincreasesresultingfromanindexedinsuranceamountoptionorfortax-exemptmaintenancepurposes,eachincreaseininsuranceamounthasitsownassociatedsurrendercharge.
Policy loans
PolicyloansfromthepolicyfundvaluearepermittedonaSunULpolicyafterthefirstpolicyyear.Theminimumamountthatcanbeborrowedis$500andthemaximumisthe(policyfundvalue,lessanyMVAsandsurrendercharges)multipliedby(1-policyloaninterestrate)minusexistingpolicyloanswithinterest.
Theamounttobeborrowedwillbetransferredtotheactivityaccount,followinganyapplicableMVAandwillbecreditedwiththeactivityaccountinterestrate.Wesettheinterestrateandmaychangeitatanytime.Thecurrentloaninterestratewillbetheprevailingactivityaccountinterestrateplus2%.
Uponthedeathoftheinsuredperson,thedeathbenefitwillbereducedbyanyoutstandingpolicyloansplusinterest.
Apolicyloanisconsideredadisposition.Anyamountreceivedinexcessofthepolicy’sadjustedcostbasiswillbetaxableincometothepolicyowner.
Lapse
ASunULpolicywilllapseif,onamonthlyanniversarydate,thepolicyfundvaluelessoutstandingpolicyloansiszeroornegative.
Whenapolicyisinalapsesituation,wewillsendthepolicyownerashortagenoticetopaytheoutstandingcostofinsurancewithinagraceperiodof31days.
2 7 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Transaction fees
Thepolicyownerisallowedtwofreetransactionsperyear(thefirsttwo),otherwisethefollowingchargesapplyandmustbepaidupfront.Themaximumfeechargedatanytimeis$100pertransaction.
$50perpolicyforthefollowingtransactions:• removingandaddinganinsuredperson(multiplelivespolicy)• changeindeathbenefitoption• changeinCOI(YRTtolevel)• increaseininsuranceamount• addterminsurancebenefit(5-,10-or20-yearrenewableterm)• investmentaccountmixchange• policyloanorcashwithdrawal• decreaseinamountofinsurance• removinganinsuredperson• changesinpolicyfundallocationsondeath• changeinspecifiedpercentageonearlydeathbenefit• deleteabenefit• changetonon-smokerrates
However,thefollowingchangesareexcludedfromthetwofreetransactions,andfeesarerequiredtobepaidup-front:
• $25chargeforanyreturnedPACpayments• $50toreissueacontract• $50foraccountinghistoryfor2yearsandover
Wemaychargeafeeforpolicytransactionsorpolicychangesthatarenotlisted.
Accessing the policy fund when disabled, ill or injured
Thepolicyownermaymakeonewithdrawalfromthepolicyfundeachtimeaninsuredpersonbecomesdisabledasdescribedbelow.Eachdisabilitymustcontinuefor60consecutivedays.Disabilityforthisbenefitmeansoccupationallydisabledorcriticallydisabled(duetoillness,duetodeterioratedmentalabilityandterminalillness).Pleaseseethepolicycontractfordefinitionsofoccupationallydisabledandcriticallydisabled.
Accordingtotaxrulesineffectasofthepolicydate,thepolicyownermaymakethiswithdrawalwithoutincurringataxabledisposition.Thetaxrulesmaychangeatanytime,withoutnotice.Thetaxrulesineffectonthedateofthewithdrawalwillapply.
Withdrawing funds under this benefit
Whenaninsuredpersonqualifiesunderthisbenefitthepolicyownermaymakeasinglewithdrawalfromthepolicyfund.
Themaximumwithdrawalamountfromthepolicyfundis:
• thebalanceintheactivityaccount• plusthetotaloftheinvestmentaccountsincludingaccumulatedinterest
uptothedateofthewithdrawal• minusanysurrenderchargethatmayapplyonthedateofthewithdrawal• minusanyloanagainstthepolicyfund,includinginterest• minusanymarketvalueadjustmentthatmayapplytoGIAs• minusanamountequaltothecostofinsuranceforthenext12months• minusaclaimassessmentfee.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 2 8
Ifthisamountislessthan$500,thepolicyownermaynotmakeawithdrawal.Wewillcreditinterestuptothedateofwithdrawal.
Unlessthepolicyownertellsusotherwise,wewillwithdrawmoneyfromtheactivityaccountandthenifnecessaryaccordingtothewithdrawalorder.WhenmoneyiswithdrawnfromaGIAitwillbetakenfromthelayerclosesttomaturity.
Thepolicyownermaynotmakeanywithdrawalunderthisprovisionif:
• weratedtheinsuredpersonasasubstandardriskformedicalreasonsandtheycontinuetoberatedonthedatetheybecomedisabled,or
• thispolicycameintoeffectastheresultofaconversionfromanotherlifeinsurancepolicywhiletheinsuredpersonwasdisabled.
Thepolicyownermustpayaclaimassessmentfeeeachtimeaclaimissubmittedtoaccessthepolicyfundwhendisabledandanyotherfeeassociatedwithsupplyingproofofthedisability.
Withdrawalswillreducethetotaldeathbenefitbytheamountofthewithdrawal.
Thepolicyownerdoes not qualifyforthisbenefitifthedisabilityisdirectlyorindirectlycausedbyorassociatedwiththeinsuredpersoncommittingorattemptingtocommitacriminaloffence.
Making a claim for this benefit
Beforeweapprovetheclaim,theageoftheinsuredpersonmustbeverified.Iftheinsuredpersonisdisabledwhenthepolicyownermakesaclaimforthisbenefit,wemustreceiveproofoftheirdisabilityafteritcontinuedformorethan60consecutivedays.
Iftheinsuredpersonisnolongerdisabledwhenthepolicyownermakesaclaimforthisbenefit,wemustreceiveproof:
• thatthedisabilitycontinuedformorethan60consecutivedays,and• ofthedisabilitywithin1yearofthedatetheinsuredpersonisnolongerdisabled.
Living benefits
ASunUniversalLifepolicyownermaybeeligibleforthelivingbenefitsprogram.Atourdiscretion,weallowpolicyownersto“draw”ontheirinsuranceamount,providedtheinsuredpersonisterminallyillandstillliving.
Thelivingbenefitsprogramwasdevelopedasahumaneresponsetoconsumerneedsandisofferedonacompassionateanddiscretionarybasis.Theprogramprovidesforamaximumof50%oftheinsuranceamounttobepaidtoamaximumof$100,000.
Anyclaimissubjecttoourrulesonthelivingbenefitsprogramatthetimetherequestismade.
How the living benefits program works
Livingbenefitsprovidesaone-timebenefitofupto50%(maximum$100,000)ofthebasicinsurancebenefitwheretheinsuredpersonisnotexpectedtolivebeyond2years.Thebenefitisanon-commercialloan.
Beforecalculatingtheamountofthebenefitavailableunderapolicy,anyoutstandingpolicyloanswillbedeductedfromthebasicinsuranceamount.
Thebenefitwillbechargedinterestatacomparableratetointerestpaidonadeathclaimsettlement.
Toprotectallthoseconcerned,agreementtothelivingbenefitspaymenthastobeobtainedfromallprimarybeneficiaries.Aswell,thosepartiesandtheinsuredpersonwillberequiredtoeffectaloanagreementwhichwillcontainanassignmentoftheinsuredperson’sinterestinthepolicyinfavourofthecompanytotheextentoftheloanplusaccumulatinginterest.
2 9 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
The living benefits program may apply when:
• theinsuredpersonisterminallyillandnotexpectedtolivebeyond2years;and• alifeplanpolicycontainsadisabilitywaiverofpremiumbenefitprovision.
Ultimately,thefinalassessmentliesinthehandsofourmedicalofficeastowhetherornotaninsuredperson’sprognosismeetstherequirementsoftheprogram.
Conversions
• Anyconvertibletermplanorbenefitcanbeconverted,withoutevidenceofinsurability,toaSunULpolicy(excepttoanindexedinsuranceamountdeathbenefitoption).
• IfanytermplanbeingconvertedtoSunULhasaconversioncredit,thecreditamountwillbetransferredintoactivityaccount.
• NopermanentplanisconvertibletoaSunULpolicy.• TheinsuranceamountunderayearlyrenewabletermCOIcanbeconvertedpriortothepolicy
anniversarynearestage81tothelevelCOIoption.However,thelevelCOIoptioncannotbeconvertedtotheyearlyrenewabletermCOIoption.
ADDITIONAL BENEFITS
SeveralattractiveadditionalbenefitsareavailableonaSunULpolicy:
• Totaldisabilitybenefit(TDB)–protectionorsavings• Terminsurancebenefitfortheinsuredandanyadditionalperson• Accidentaldeathbenefit(ADB)• Guaranteedinsurabilitybenefit(GIB)• ExecutiveGIB• Coveragedeathbenefit(CDB)onjointlasttodie–protectionorsavings• Ownerdeathbenefit–protectionorsavings• Ownerdisabilitybenefit–protectionorsavings
Total disability benefit – protection or savings
AchoicebetweentwoformsofTDBisavailableonaSunULpolicy.Inbothcases,theissueagesare0through55,andthepremiumpaymentisbasedoneach$100ofbenefit.Theinsuredpersonisalsoabletochoosethebenefitperiod.
WithTDB(protection),themonthlycostofinsuranceforthebasicinsurancebenefitandadditionalbenefitsoftheinsuredpersonwillbewaivediftheybecomedisabled.
WithTDB(savings),theinsuredpersonchoosesasavingsamountwhichcanvarybetween0and2timestheinsurancefactorofthepolicy.Uponthedisabilityoftheinsuredperson,thesavingsamountwillbepaidintotheactivityaccountonamonthlybasis.Thecostofinsuranceisthendeductedfromthepolicyfund.Note:Sincethesavingsamountislevel,itmayeventuallybeinsufficienttocoverthemonthlycostofinsuranceiftheyearlyrenewabletermCOIoptionisused,soexercisecautionwhenchoosingit.
Definition of total disability
Theinsuredpersonmustbecompletelyunable,duringthefirsttwoyears,tocarryontheirownoccupationand,thereafter,tocarryonanyoccupation.Totaldisabilitymustbecontinuous.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 3 0
Exclusions
Totaldisability:
i) continuesforlessthansixmonths,ii) fromself-inflictedinjuries,oriii) fromcommittingacriminaloffence.
Pleaseseepolicycontractforotherexclusions.
Making a claim
Noticemustbegiventous:
i) duringtotaldisability,andii) beforetheinsuredperson’s61stbirthday.
Proof
Proofmustbegiventous:
i) withinsixmonthsofnotice,andii) then,fromtimetotimeasrequiredbyus.
Limitations
Paymentsunderthisbenefitwillnotbemadeforanyperiodearlierthanoneyearbeforeanoticeoftotaldisabilityisreceivedbyus.Thetotalamountpaidbyusundertotaldisability(savings),ownerdeath(savings),ownerdisability(savings),andcoveragedeath(savings)benefitsforthispolicymustnotexceedanamountequaltofivetimesthesumoftheinsurancefactorsforthepolicy.
Term insurance benefits for the insured and any additional persons
Five-,10-and20-yearrenewableandconvertibleterminsurancebenefitsprovideadditionalprotectionthattheinsuredpersonmayrequireonatemporarybasis.Eachinsuredpersonwithabasicinsurancebenefitcanincludeaterminsurancebenefitonanotherpersonsuchasaspouse,familymemberorbusinesspartner.Thisbenefitcanalsobepurchasedafterpolicyissueonanattainedagebasis,withtherequiredevidenceofinsurability.Thisbenefitisguaranteedrenewableattheendofeachtermperiod,withoutevidenceofinsurability,tothepolicyanniversarynearestage80.Renewalcostsarebasedontheinsuredperson’sattainedageatthestartofthenextrenewalperiod.Insuredpersonsunderasingle,multi-life,jointfirst-orlast-to-diebasicinsurancebenefitcouldelectthisbenefitonasingle-lifebasisonly.Thisbenefitcanbeconvertedpriortothepolicyanniversarynearesttheinsuredperson’s70thbirthdaytoanadditionalULcoverageoranyeligiblelifeplanofferedbyus.
Accidental death benefit (ADB)
TheADBoptionpaysoutanadditionaldeathbenefittothebeneficiaryiftheinsuredperson’sdeathwasduetoanaccident.
Thisbenefitisavailableatissueages0through65andthebenefitceasesonthepolicyanniversarynearesttheinsuredperson’s70thbirthday.
TheminimumADBinsuranceamountis$10,000.ThemaximumADBinsuranceamountisthepolicyfaceamountandissubjecttothefollowingissueandparticipationlimits:
3 1 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Issueage Maximum Participationlimit**
0to14* $100,000 $150,000
15to24 $250,000 $400,000
25to65 $500,000 $750,000
* ADB is not payable if death occurs before age 5. ** Maximum of all ADB insurance amounts with us.
Guaranteed insurability benefit (GIB)
GIBallowsthepolicyownertopurchaseadditionalinsuranceprotection,onanattainedagebasis,withoutprovidinganyevidenceofinsurability.SunULofferstwoformsofthisbenefit—GIBandexecutiveGIB.AdditionalSunULcoveragepurchasedviaaGIBelectionmustbepurchasedwithoneoftwodeathbenefitoptions—thelevelinsuranceamountortheinsuranceamountplusfundoption.Thepolicyownercanalsopurchaseanyothereligiblelifeinsuranceproductofferedbyus,atthetimeofelection.
GIB
WithGIB,thepolicyownerhastheoptiontopurchaseadditionalcoverageeverythreeyears,oronfamilydates(marriage,birthoradoptionofachild).Thisbenefitisavailableatissueage0through50,andtheamountpurchasedmustbeatleast$25,000.ThemaximumamountofGIBcoverageisthelesserof:
i) theoriginalinsuranceamountandii) $250,000.
AmaximumofeightelectionsarepermittedandthemaximumwillbereducedbyanyGIBamountonotherpoliciesissuedbyuscoveringthedesignatedinsuredperson.
ThefirstGIBelectionisavailablewhenthedesignatedinsuredpersonreachesage24.Thebenefitceasesonthepolicyanniversarynearestage55.
Executive GIB
ExecutiveGIBisavailableonSunULcoveragewheretheminimuminsuranceamountis$250,000.AlthoughtheexecutiveGIBbenefitissimilartoGIB,thedetailsarequitedifferent.Atissue,theinsuredpersoncanchoosehowmanyelectionsarerequired,exactlywhentheywillberequired,andtheinsuranceamountofeachelection.
ExecutiveGIBisavailableatissueages25through60;thelatestelectiondateavailableisthepolicyanniversarynearestage65.
TheminimuminsuranceamountforeachexecutiveGIBelectionis$250,000.ThelifetimemaximumofallGIBelectionsmustbethelesserof:
i) Fourtimestheoriginalinsuranceamount,andii) $4million.
Thereisamaximumoffiveelectionsavailableandthefirstelectionmustbeatleastthreeyearsfromthedateofissue.
Coverage death benefit (CDB) – protection or savings for joint last-to-die
TwoformsofCDBareavailableonaSunULpolicy.Thisbenefitensuresthatcoveragecontinuesforthesurvivinginsuredperson.Inbothcases,theissueagesare18through75andthepremiumpaymentisbasedoneach$100ofbenefit.Theinsuredpersonisabletochoosethebenefitperiod.Thisfeatureisonlyavailableonjointlast-to-diebasicinsurancebenefits.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 3 2
WithCDB(protection),themonthlycostofinsurancewillbewaivedforthechosenbenefitperiod,uponthedeathoftheinsuredperson.
WithCDB(savings),theinsuredpersonchoosesasavingsamountwhichcanvarybetween0and2timestheinsurancefactorofthepolicy.Uponthedeathoftheinsuredperson,wepaythesavingsamounteachmonthintotheactivityaccountforthechosenbenefitperiod.Costofinsurancewillstillbedeductedmonthly.Note:Sincethesavingsamountislevel,itmayeventuallybeinsufficienttocoverthemonthlycostofinsuranceiftheyearlyrenewabletermCOIoptionisused,soexercisecautionwhenchoosingit.
Owner death benefit – protection or savings
TwoformsofownerdeathbenefitareavailableonaSunULpolicy.Thisbenefitisthesameastotaldisabilitybenefit,exceptthatthebenefitispaiduponthedeath(ratherthanthedisability)ofthepolicyowner.Bothownerdeathbenefit(protection)and(savings)areavailable.
Themaximumownerdeathbenefit(savings)thatisavailableisthegreaterof:
i) Twotimestheinsurancefactorandii) $1,500.
Owner disability benefit – protection or savings
TwoformsofownerdisabilitybenefitareavailableonaSunULpolicy.ThisbenefitisexactlythesameasTDB(protection)andTDB(savings),exceptthatitappliestothenamedpolicyowner(ratherthantheinsuredperson)andispaiduponthedisabilityofthepolicyowner.
Themaximumownerdisabilitybenefit(savings)thatisavailableisthegreaterof:
i) Twotimestheinsurancefactorandii) $1,500.
Definition of total disability
Theinsuredpersonmustbecompletelyunable,duringthefirsttwoyears,tocarryonwithownoccupationand,thereafter,tocarryonanyoccupation.Totaldisabilitymustbecontinuous.
Exclusions
Totaldisability:
i) continuesforlessthansixmonths,ii) fromself-inflictedinjuries,oriii) fromcommittingacriminaloffence.
Pleaseseepolicycontractforotherexclusions.
Making a claim
Noticemustbegiventous:
i) duringtotaldisability,andii) beforetheinsuredperson’s61stbirthday.
Proof
Proofmustbegiventous:
i) withinsixmonthsofnotice,andii) fromtimetotimeasrequiredbyus.
3 3 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Limitations
Paymentsunderthisbenefitwillnotbemadeforanyperiodearlierthanoneyearbeforewereceiveanoticeoftotaldisability.Thetotalamountpaidbyusundertotaldisability(savings),ownerdeath(savings),ownerdisability(savings),andcoveragedeath(savings)benefitsforthispolicymustnotexceedanamountequaltofivetimesthesumoftheinsurancefactorsforthepolicy.
ADDITIONAL BENEFITS SUMMARY
Benefit Issue age Age benefit terminates
Minimum insurance amount
Maximum insurance amount
Totaldisabilitybenefit(protection)or(savings)
0to55 Ontheinsured’sperson’s60thbirthdayorendofthebenefitperiod,ifearlier
Chosenbytheclient–minimum6years,maximumtotheinsuredperson’s100thbirthday
5-,10-&20-yearterminsurancebenefit
18to70–5-and10-yearterm18to60–20-yearterm
80 $100,000 Additionofarenewableandconvertibleterminsurancebenefitreducestheremainingamountoftotalinsuranceavailablefortheinsuredperson,subjecttoourretentionlimits
ADB 0to65 70 $10,000 Policyinsuranceamount,subjecttoourcurrentissueandparticipationlimits
GIB 0to50 55 $25,000 Maximumperelection: lesserof
i)theoriginalinsuranceamountand
ii)$250,000lifetimemaximumof8elections
ExecutiveGIB 25to60 65 $250,000 Nomaximumperelection.Lifetimemaximum:lesserofLifetime
i)4timestheoriginalinsuranceamountand
ii)$4millionlifetimemaximumof5elections
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 3 4
ADDITIONAL BENEFITS SUMMARY (continued)
Benefit Issue agePayment and coverage period
Benefit
Coveragedeathbenefit(protection)or(savings)
18to75 Thebenefitperiod Chosenbytheclient***–minimum6years,maximumtotheinsuredperson’s100thbirthday
Ownerdisabilitybenefit(protection)or(savings)*
18to55 Tothepolicyanniversarynearesttheowner’s60thbirthdayorendofthebenefitperiod,ifearlier
Chosenbytheclient–minimum6years,maximumtothepolicyanniversarynearestthepolicyowners70thbirthday
Ownerdeathbenefit(protection)or(savings)*
18to60** Tothepolicyanniversarynearesttheowner’s70thbirthdayorendofthebenefitperiod,ifearlier
Chosenbytheclient–minimum6years,maximumtothepolicyanniversarynearestthepolicyowners70thbirthday
* Maximum savings amount is 2 times the insurance factor or $1,500, whichever is greater.** 55 if the disability and death benefit options are both chosen.*** If both lives choose death benefit coverage, they must elect the same benefit period.
GENERAL DEFINITIONS
Inthisproductguide,referencesto“usandwe”meanSunLifeAssuranceCompanyofCanada,amemberoftheSunLifeFinancialgroupofcompanies.
Accounts based on performance of indices (index accounts)
Aninvestmentoptionwherethevalueintheaccountincreasesanddecreasesinproportiontothedailychangeinanexternalindex.Theseaccountsearndailyinterest.
Acknowledgement of variability
Thisisthesectionoftheillustrationthatadvisesthepolicyownerofthevariabilityofthevalues.
Additional amount with application
Thisisanamountthattheclienthaselectedto“dumpin”totheULpolicy,inadditiontotheplannedperiodicpayments.
American Equity Index Account
EarnsadailyrateofreturnbasedontheperformanceoftheS&P500TotalReturnIndex.
Asset allocation
Theprocessofdividinganinvestmentamongmajorassetcategoriessuchasbonds,stocksorcash.Thepurposeofassetallocationistoreduceriskbydiversifyingtheinvestment.
3 5 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Assumed interest rate/marginal tax-rate assumption
Thisisarateselectedbytheadvisorandtheclient,andwillbethebasisformostoftheillustrationsinthepresentation.Themaximumratepermittedis10%fortheAssumedInterestRateand60%fortheMarginalTaxRate.
Canadian Bond Index Account
EarnsadailyreturnbasedontheperformanceoftheFTSETMXCanadaUniverseBondIndex.
Canadian Equity Index Account
EarnsadailyrateofreturnbasedontheperformanceoftheS&P/TSX60TotalReturnIndex.
Coverage death benefit/protection
Thisadditionalbenefitisavailableonjointlast-to-diepoliciesandensuresthatcoveragecontinuesforthesurvivinginsuredpersonbywaivingthecostofinsuranceforaspecifiedperiodoftime.
Coverage death benefit/savings
Thisadditionalbenefitisavailableonjointlast-to-diepoliciesandensuresthataspecifiedamountwillbe.
Death benefit option
Definesthedeathbenefitoptionforthepolicy,aswellastheoptionstomaintainthepolicy’stax-exemptstatus.
Equivalent single age
Theequivalentsingleageisasingleageassociatedwithajointfirst-to-dieorjointlast-to-diebasicinsurancebenefit.Itisdeterminedonthedatethebenefittakeseffect,usingtheage,smokingstatusandsexofeachoftheinsuredpersonsforthejointbenefit.
Executive guaranteed insurability benefit
Thisoptionguaranteesthepolicyownertherighttopurchaseadditionalinsuranceattimesandamountsspecifiedbythepolicyowner,regardlessofhealth.
Family dates
Afamilydateoccursuponthebirthofalivingchild,adoptionofachildormarriageoftheinsuredperson.
Foreign Equity Index Account
EarnsadailyreturnbasedontheperformanceoftheMorganStanleyCapitalInternationalEuropeAustralasiaandFarEast(MSCIEAFE)FreePriceIndex(excludingdividends).
Fund builder
Fundbuilderisaninsuranceamountplusfunddeathbenefittypethatisdesignedtomaximizeaclient’spolicyfundvalue.Thisdeathbenefitincorporatestheexemptmaintenancemethodofincreaseinsuranceamountandreducebelowinitial.Thisallowstheinsuranceamounttobereducedto$10,000andminimizesthecostofinsurance.Ayearlyrenewabletermcostofinsuranceisrequiredwiththisdeathbenefittype.Underthisoptionthepolicyfundvalueispaidondeath,inadditiontotheinsuranceamount.Theinsuranceamountwillbeadjustedupwardstokeeppolicyfundsexemptandwillthenbereducedwhenpossible.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 3 6
Funding ratio
ThefundingratioisdeterminedbydividingAbyBwhere:
A=sumofthenetpaymentsandB=sumoftheinsurancefactors,
reducedbytheinsurancefactorsfortheadditionalbenefitsandterminsurancebenefits,multipliedbythenumberofcompletedyearsthattheirrespectivecoverageshavebeenineffect.
Thenetpaymentsconsistsofallpaymentsmadetodate,decreasedbycostsfortheadditionalbenefits,terminsurancebenefitsandanytransactionfees,MVAorwithdrawals.
Grace period
Agraceperiodof31daysisallowedforthepaymentofeachmonthlycostofinsurance,exceptthefirst.
Growth
Themanagerchoosesstocksfortheportfoliobasedonanassessmentofacompany’sabilitytogrowitsbusinessprofitably.Ifthemanagerisright,thecompany’sstockwillincreaseinpriceasthecompanyachievesbusinessandearningsgrowth.
Growth at a reasonable price (GARP)
Themanagerlooksforthestocksofgrowthcompaniesthattheycanbuyforareasonableprice.Thisisacombinationofvalueandgrowthinvesting.
Guaranteed insurability benefit (GIB)
Guaranteesthepolicyownertherighttopurchaseadditionalinsuranceoneachinsuredpersoneverythreeyearsoronfamilydates,regardlessofhealth.
Guaranteed interest account (GIA)
Aninvestmentoptionwheretheinterestandtherepaymentofprincipalareguaranteedafteracertainterminyearse.g.3-yearGIA.
Guaranteed level
LevelisoneofthetwoavailableCOIoptions.Withlevel,theCOIremainslevelandisguaranteedforthelifeofthecoverage.
Guaranteed yearly renewable term (YRT)
YRTisoneofthetwoCOIoptionsavailable.WithYRT,theCOIincreaseseachyearastheinsuredpersonages.Theratesareguaranteedforthelifeofthecoverage.
Historical average
Asectionoftheillustrationprovideshistoricalaverageratesfortheaccountsselectedintheillustration.
Indexed insurance amount
Thisisoneofthefouravailabledeathbenefitoptions.Thedeathbenefitisthegreateroftheindexedinsuranceamountandthepolicyfundvalue,lessallocatedoutstandingpolicyloanswithinterest.Thetotalinsuranceamountofthecoveragewillincreaseannuallyfromtheinitialinsuranceamount,byapredeterminedrate.
37 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Insurance amount
Theamountstatedinthepolicythatispayableuponthedeathoftheinsuredperson.
Insurance amount plus fund
Thisisoneofthefouravailabledeathbenefitoptions.Upondeath,thepolicyfundvalueispaidinadditiontotheinsuranceamount.
Insurance discount
ThisistheCOIdiscountearnedfromthefundingratiocalculation.Thefundingratioisdescribedundertheinvestmentbonusprovision.
Insurance factor
Theinsurancefactorisequalto100%ofthelevelCOI,plusanymultiple-ratingschargedattheactualCOI(LevelorYRTasthecasemaybe).ThisdefinitionapplieseveniftheyearlyrenewabletermCOIoptionisselected.Theinsurancefactorisdeterminedatthepolicy’sissuedate.
Investment bonus
ForpoliciesissuedonorafterNovember18,2005,whenabonushasbeenchosen,thebonuspaysaguaranteedpercentagetothepolicyfundvaluebasedontheaveragemonthlyaccountvalueintheprevious12months.Theamountofthebonusandtheyearinwhichitstartsvariesbythetypeofpolicycoveragepurchasedandthenumberofyearsthecoverageisheld.ForpoliciesissuedpriortoNovember18,2005,thebonusispaid10yearsafterthepolicyeffectivedateandeveryfifthpolicyanniversarythereafter.
Investment options
Asectionoftheillustrationthatdemonstrateshistoricalandguaranteedratesforeachoftheinvestmentaccountsselectedintheillustrationaswellasanexplanationoftheserates.
Investment mix
ThecombinationofallinvestmentaccountsselectedbyaSunUniversalLifepolicyowner,includingtheactivityaccount,GIAs,accountsbasedontheperformanceofindicesandaccountsbasedontheperformanceofmanagedfunds.Themixisexpressedintermsofpercentagesthataremultiplesof5%.
Level insurance amount
Thisisoneofthefouravailabledeathbenefitoptions.Thetotaldeathbenefitwillbethegreaterof:
i) theinsuranceamount,andii) thepolicyfundvalue.
Lessallocatedoutstandingpolicyloanswithinterest.
Living benefits
Thisallowspolicyowners,atourdiscretion,to“draw”ontheirlifeinsuranceprovidedthattheinsuredpersonisterminallyillandstillliving.
Management fee
Themanagementfeeisdeductedfrominterestearnedontheindexaccountsoronthemanagedaccounts.Themanagementfeehelpscovertheexpensesrequiredbyustomanagetheuniversallifepolicyandrelatedinvestments.Accountmanagementfeesmaychange.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 3 8
Market value adjustment (MVA)
AreductioninthevalueofpolicyfundswithdrawnfromaGIA,priortomaturity.Thisoccursonlyiftheprevailinginterestrate(atthetimeofwithdrawal)ishigherthanthatbeingpaidonanewGIAofthesameinitialterm.TheMVAappliestowithdrawals,policyloans,ortransfersfromaGIA,exceptontransfersrequiredtopayformonthlycostofinsuranceortomaintainthepolicy’stax-exemptstatus.
Minimum amount required with the application
Thisistheminimumpaymentthatwillberequiredfortheplan.Thisamountmaychangeovertime.Theminimumlumpsumrequirementis$250.TheminimumPACpaymentisthemonthlycostofinsuranceplusapplicableprovincialpremiumtax.
Monthly anniversary date
Thedayofthemonththepolicywentintoeffect.Forexample,apolicydateofAugust2willhaveamonthlyanniversaryontheseconddayofeachmonth.
Monthly activity account minimum
Themonthlyactivityaccountminimumiscalculatedbyaddingthemonthlycostofinsurance(mortalitychargesplusthecostofanyadditionalbenefits).Theactivityaccountminimumisonlyusedforreinstatements.
Multiple lives coverage
Currently,uptoninelivesinafamilyorbusinesscanbecoveredunderonepolicy.
Net cost of insurance
TheCOIlesstheinsurancediscount.
Net cost of pure insurance (NCPI)
Anannualcostofinsurance,prescribedbyCanadaRevenueAgency,thatisusedinthecalculationofapolicy’sadjustedcostbasis.
Net payment
Paymentsnetofapplicableprovincialpremiumtax.
Net insurance amount at risk
Thedifferencebetweenacoverage’sbasicinsuranceamountandthepolicyfundvalue.
Owner death benefit/protection
Thisoptionensuresthatthepolicy’scostofinsuranceiswaivedforaspecifiedperiodoftimeshouldthepolicyownerdie.
Owner death benefit/savings
Thisoptionensuresthataspecifiedamountbepaidintotheactivityaccountonamonthlybasisshouldthepolicyownerdie.
Owner disability benefit/protection
Thisoptionensuresthatthepolicy’scostofinsuranceiswaivedforaspecifiedperiodoftime,shouldthepolicyownerbecometotallydisabled.
3 9 A D V I S O R G U I D E - S u n U n i v e r s a l L i f e
Owner disability benefit/savings
Thisoptionensuresthataspecifiedamountbepaidintotheactivityaccountonamonthlybasisshouldthepolicyownerbecometotallydisabled.
Payments/withdrawals column
Acolumnontheillustrationthatcontainstheselectedplannedpaymentsonanannualbasis.Thewithdrawalsectionillustratesselectedplannedwithdrawalsonanannualbasis.
Planned periodic payment
Theamountchosenbythepolicyownertopayintothepolicyatspecifiedtimeperiods.
Policy fund value
Thetotalvalueofallinvestmentaccounts.
Policy loans
Ameansofaccessingthepolicyfund.Aloanuptothepolicy’sadjustedcostbasiscanbereceivedwithouttaxation.Anyamountinexcessoftheadjustedcostbasisistaxableincometothepolicyowner.Theamountofanyoutstandingpolicyloansplusinterestwillreducethedeathbenefit.Theamountofthepolicyloanismovedintotheactivityaccount.Theactivityaccountwillcontinuetoearninterestontheamount,andtheinterestyoupayonthepolicyloanwillbe2%higherthanwhatyouearnedintheactivityaccount.Nopolicyloansareallowedinthefirstpolicyyear.
Policy taxation summary
ThissectionoftheillustrationoutlinesthetaxableinterestgeneratedonaSunUniversalLifepolicywheninterestisearnedbytheserviceaccountandwhenthereisapartialwithdrawalorafullsurrenderofthepolicy’sfundvalue.
Reinstatement
Wewillputthepolicybackinforcewithintwoyearsoftermination,subjecttoinsurability,ifthepolicyownerrepaysalltheoutstandingmonthlycostofinsurancewithinterest.
Sensitivity analysis
Apageintheillustrationthatshowscashsurrendervalue(CSV)anddeathbenefitsatthreedifferentinterestratessothatthepolicyownerfullyunderstandstheeffectofillustratedratesandlapsesensitivity.
Service account
Allnon-exemptfundsaretransferredintotheserviceaccount,andtheinterestearnedisreportedastaxableinvestmentincometothepolicyowner.ServiceaccountfundscanbeinvestedinanyoneoftheavailableGIAs,indexaccounts,managedaccountsortheDIA.
Service account balance column
Iftheserviceaccountoptionisselected,thebalanceattheendofeachpolicyyearwillappearinthiscolumn.
Surrender charges
Achargethatappliestothepolicyfundvalueifthepolicyiscancelledinthefirst10yearsofcoverage.
A D V I S O R G U I D E - S u n U n i v e r s a l L i f e 4 0
Tax on service account
Ifaserviceaccountexists,anannualtaxwillbepayableontheinterestearnedinthisaccount.
Tax on surrender
Thisisthetaxpayableonfullsurrenderofthepolicyfundvalue.
Tax on withdrawals
Thiscolumnillustratesanytaxpayableasaresultofthewithdrawals.Thetaxisbasedonthepolicyowner’sassumedmarginaltaxrate.
Term insurance benefit
Thisbenefitallowstheinsuredpersontopurchase,priortoage70forthe5-and10-yearandage60forthe20-yearterm,additionalprotectionuntilage80.Thebenefitisguaranteedtoberenewableattheendofeachtermperiod,withoutevidenceofinsurability.Thisbenefitcanbeconvertedpriortothepolicyanniversarynearesttheinsuredperson’s70thbirthdaytoanadditionalULcoverageoranyeligiblelifeplanofferedbyus.
Total disability benefit/protection (TDB protection)
Thisensuresthatthemonthlycostofinsurancefortheinsurancebewaivedforaspecifiedperiodoftime,shouldtheinsuredpersonbecometotallydisabled.
Total disability benefit/savings (TDB savings)
Thisensuresthataspecifiedamountwillbepaidtotheactivityaccountonamonthlybasisshouldtheinsuredpersonbecometotallydisabled.
Value
Themanagerchoosesstocksthatareinexpensivebasedonananalysisofthecompany’scurrentstrengthsandfutureprospects.Ifthemanagerisright,thecompany’sstockwillincreaseinpriceasothersinthemarketrecognizethetruevalueofthestock.
Withdrawals
Afterthefirstpolicyyear,themaximumamountavailableforwithdrawalisequaltotheCSVofthepolicy.
Why choose Sun Life Financial?SunLifeFinancialisaleadinginternationalfinancial
servicesorganization.InCanada,westartedselling
lifeinsurancein1871.Sincethen,ourcommitmentto
helpingpeopleachievelifetimefinancialsecurity
throughmarket-leadingproducts,expertadvice
andinnovativesolutionshasmadeusahousehold
name–anamethatpeopletrust.
Fortheseventhstraightyear,wewerevotedbyCanadiansasthe“MostTrustedLifeInsuranceCompany”in
theReader’sDigest2016TrustedBrandsSurvey.Inthissurvey,peoplewereaskedtoconsiderwhetherthe
brandspossessedseveralattributesincludingsuperiorquality,excellentvalue,anunderstandingofits
customers’needsandwhethertheywouldrecommendthebrandtoothers.We’rehonouredbythisawardand
yourcontinuedtrustinus.
6
Questions? We’re here to help.
Talk to your advisor about Sun Life Financial today!
For more information and resources visit www.sunlife.ca | Call 1 877 SUN-LIFE / 1 877 786 5433
We’re dedicated to helping you achieve lifetime financial security.
TMTrustedBrandisaregisteredtrademarkofReader’sDigestAssociationCanadaULC.
Life’s brighter under the sunSunLifeAssuranceCompanyofCanadaisamemberoftheSunLifeFinancialgroupofcompanies.©SunLifeAssuranceCompanyofCanada,2016.810-3648-Digital-05-16