swes 2 advisor presentation november 1 v2 · • clients will likely require a retirement income...

managed by CI Investments Inc. issued by Sun Life Assurance Company of Canada

Introduction

Agenda

SunWise Essential Series 2 •  design overview •  benefits •  investment solutions Tools & marketing support

Design Overview


Introducing SunWise Essential Series 2

Simplicity – one contract covers all classes of units, which allows clients to consolidate accounts

Three different classes of units – to meet different needs:

•  Income Class – for guaranteed income for life

•  Investment Class – for wealth accumulation

•  Estate Class – for ensuring maximum estate value for beneficiaries

One contract – three classes

Income Class GLWB

100% Death Benefit

75% Contract maturity

Selected income funds, balanced funds, Bundles,

Portfolio managed solutions

Up to 70% equities

Investment Class

75% Death Benefit


All funds, including Bundles and Portfolio managed

solutions

Up to 100% equities

Estate Class

100% Death Benefit


Income funds, balanced funds, Bundles, Portfolio

managed solutions

Up to 70% equities

Contract level account

•  All classes in one contract

•  Maximize financial benefits

•  Build your own portfolio

•  One application

•  One statement

•  One tax slip

60 61 62 63 64 65 66 67 68 69 70 Age

Investment Class

Income Class

Market value of stated class 5% Annual Bonus

Benefits

•  Guarantees –  Maturity benefit –  Death benefit

•  Guaranteed Income for Life •  Avoidance of probate fees •  Potential creditor protection

SunWise Essential Series 2 Income Class


Changing retirement landscape

•  60% of Canadian workers have no employer pension •  45% have no employer pension or RSP savings •  private sector pensions are being cut back •  CPP/QPP and OAS combined provide a retirement income of about

40% of the average wage •  clients will likely require a retirement income that’s roughly 60% to 70%

of their current level of income

Source: StatsCan, average weekly earnings, 72-002-XIB; servicecanada.gc.ca for CPP and OAS payment rates for 2012; and The Globe & Mail seven-part series, Retirement Lost, October 2009.

The Retirement Risk Zone

Market risk

Source: Asset Allocation and the Transition to Income, Milevsky & Salisbury, September 2006.

Sequence of returns

The effects of market risk

Will poor performance in the retirement risk zone change your client’s plans?

Retirement risks – inflation

Purchasing power in 20 years

$0.82 (1% inflation)



Retirement risks – longevity


Can help protect against the three retirement risks •  Market risk (sequence of returns) •  Inflation risk •  Longevity risk

Filling the gap

* All amounts have been rounded. Based on 2012 maximum benefits at age 65, Canadian Pension Plan is $11,840 a year or $987 per month, and Old Age Security is $6,480 a year or $540 per month.

For guaranteed retirement income SunWise Essential Series 2 can help fill the gap


•  target age 50+ •  for guaranteed, predictable income for life regardless of

market performance •  annual 5% Income Bonus available for year of purchase and next 15 years •  ability to ensure income for life for one life or two lives, if spouses •  larger income with age-tiered withdrawals for those age 70 or older •  principal protection guarantees – 75% contract maturity benefit at age 100 and

100% at death (reduced proportionately by withdrawals) •  additional benefits of insurance contract including potential creditor protection and

ability to bypass probate

Guaranteed in all markets

5% Bonus for guaranteed growth

Investment gains locked in

Customized withdrawals

LWA Rate for One-Life LWA Rate for Two-Life

Age Tier* Income Stream option Income Stream option

55 to 64 3% 2.5%

65 to 69 4% 3.5%

70 to 74 4.25% 3.75%

75 to 79 4.5% 4%

80 or older 5% 4.5%

21

* Based on the expected age of Annuitant on December 31 of the year of the LWA Commencement Date. Resets occurring in a higher age tier will result in an increase in the LWA Rate. If the client makes the Age 55 LWA Election, deposits before January 1 of the calendar year in which the Annuitant (or, if the Two-Life Income Stream has been selected, the younger of the Annuitant and the Second Life) turns 65 years of age the client will be entitled to GLWB Resets but will not be entitled to an increase in the LWA Rate if a GLWB Reset occurs at a time when a higher age tier would apply.

Early & Excess Withdrawals

There may be occasions when your client will require income before withdrawals begin at age 65, or they may require a higher amount than their LWA. Unlike traditional annuities, Income Class is flexible enough to accommodate their needs.

They will always have access to their investments, but taking income before age 65, or age 55 with the Age 55 LWA Election, will cause an Early Withdrawal. When this occurs, the LWA Base and the 5% Bonus Base are reduced proportionately. This can affect the future guaranteed income for life.

If your client is receiving their LWA, but they take additional income above the LWA payment entitlement, this is considered an Excess Withdrawal. An Excess Withdrawal is the amount by which the income taken during the year exceeds the LWA. When this happens, the LWA is reduced to nil for current calendar year and the LWA Base and the 5% Bonus Base are reduced proportionately. This can also effect the future guaranteed income for life.

Eligibility date: Jan 1/65 as a % of the LWA Base Option Jan 1/55

LWA Rate varies based on age of the Annuitant at time of initial withdrawal, subject to quarterly proration

*Based on the expected age of Annuitant on December 31 of the year of the LWA Commencement Date. Resets occurring in a higher age tier will result in an increase in the LWA Rate. If the client makes the Age 55 LWA Election, deposits before January 1 of the calendar year in which the Annuitant (or, if the Two-Life Income Stream has been selected, the younger of the Annuitant and the Second Life) turns 65 years of age the client will be entitled to GLWB Resets but will not be entitled to an increase in the LWA Rate if a GLWB Reset occurs at a time when a higher age tier would apply.

Life of the Annuitant and second Life

Starts at 3.5% of the LWA Base annually (2.5% at age 55)

Life of Annuitant (recalculated after annuitant’s death)

Starts at 4% of the LWA Base annually

One-Life or Two-Life Income Stream

One-Life Income Stream

Two-Life Income Stream

Available on Jan. 1, year the Annuitant is age 65 or older (option

to start at age 55, at 3%)

Jan. 1, year the younger spouse is 65 or older (option

to start at age 55, at 2.5%)

Guaranteed income

Based on

Rate

Guaranteed for one life or two

Income for one life or two

RRIF for life

Age 55 LWA Election details

•  3% for One-Life and 2.5% for Two-Life starting at age 55 •  No increase of the LWA Rate on GLWB Reset for deposits before

age 65 if Age 55 LWA Election is made •  Any deposits made after age 65 will create a Blended LWA Rate and

have the potential for an increase of the LWA Rate on GLWB Reset

Income Class Highlights

•  designed to mitigate market risk and protect retirement income •  eliminates longevity risk with guaranteed retirement income for one life or two lives,

if spouse •  guaranteed growth of retirement income with annual 5% Income Bonus available for

year of purchase and next for 15 years •  automatic GLWB resets every three years to capture potential growth and act as a

hedge against inflation •  automatic death benefit resets every three years until age 80 •  age-tiered withdrawals for larger income later in life •  up to 70% exposure to equity funds (through Bundles) •  principal protection guarantees – 75% contract maturity benefit at age 100 and 100%

at death (reduced proportionately by withdrawals)

SunWise Essential Series 2 Investment Class


Investment Class Highlights

•  target age primarily under 50 •  for wealth accumulation •  maximum growth potential with 100% equities •  principal protection guarantees – 75% contract maturity benefit at age 100 and

75% at death (reduced proportionately by withdrawals) •  potential creditor protection for business owners and professionals •  ability to bypass probate •  available investments include more than 60 funds, including equity, income and

balanced funds, SunWise Essential Bundles and Portfolio managed solutions •  ability to combine the liquidity of Investment Class with the predictable income

from Income Class within one contract

SunWise Essential Series 2 Estate Class


Estate Class Highlights

•  target age 65+ •  for ensuring maximum estate value •  balanced investments for moderate growth •  principal protection guarantees – 75% contract maturity benefit at age 100 and 100%

at death •  ability to bypass probate and potential creditor protection •  available investments include more than 40 funds, including income funds, balanced

funds, SunWise Essential Bundles and Portfolio managed solutions •  up to 70% exposure to equity funds (through Bundles) •  ability to combine the liquidity of Estate Class with the predictable income from

Income Class within one contract (in case of emergency or unforeseen expenses, Estate Class units can be withdrawn instead of Income Class units so their income stream will not be impacted)

Death Benefit Resets

The Death Benefit resets every three years, with the final reset in the year the annuitant turns age 80

Investments


SunWise Essential Series Bundles

•  one or two equity or balanced funds combined with one income fund •  segregated bundles hold a traditional bond or diversified income fund

with an equity or balanced fund •  designed to ensure the maximum exposure to the underlying equity or

balanced funds at all times •  rebalanced monthly to ensure that the equity exposure is always

maximized

How the Bundle rebalancing works

The fund allocation of the Bundle mix is determined by the underlying security allocation of the equity fund

0% cash

30% cash

Client benefits

Source: CI Investment Consulting

SWE Bundle vs. underlying funds with 70/30 asset mix

Past performance is not indicative of future returns. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value.

Summary


Key benefits

•  one account – consolidated reporting for all classes •  guaranteed growth of retirement income •  guaranteed retirement income for one life or two lives, if spouses,

regardless of market performance •  locking in of portfolio gains for income and death benefits •  larger income for clients who commence an income later in life •  tax-efficient for non-registered accounts •  income for life for RRIFs •  largest selection of segregated funds in Canada

Investment Class

Income Class

Estate Class

1 – Choose protection

type

2 – Structure contract to fit financial

objectives

3 – Select investment

strategy

beneficiaries

One-Life or Two-Life Income Stream

balanced funds, Bundles

income and balanced funds,

Bundles

fixed income to 100% equity

The Sales Process – simpler, focused

Private Investment Management

•  World-class portfolio management and a broad choice of investments •  Enhanced accessibility

–  $100,000 per mandate per account to receive preferred pricing •  Competitive pricing

–  High-net worth pricing at $100,000, reduced for upper tiers •  Guaranteed income and estate planning

–  Available in all classes of CI SWESS 2 •  Consolidate and simplify across platforms

–  Link mutual, corporate class and SWESS 2 accounts for reduced pricing & consolidated reporting once one account has and maintains a value of $250,000. True product allocation

Tools & support


www.sunwiseessentialseries.com

Advisor support: •  www.sunwiseessentialseries.com •  a video •  illustration tool •  marketing collateral •  information folder and administration documents •  case studies •  a dedicated segregated funds specialist team

Sun Life Financial Client Guide

issued by Sun Life Assurance Company of Canadamanaged by CI Investments Inc.

Sun Life Financial Advisor Guide

issued by Sun Life Assurance Company of Canadamanaged by CI Investments Inc.

Thank You

All charts and illustrations in this guide are for illustrative purposes only. They are not intended to predict or project investment results. To the extent of any inconsistencies between this guide and the August 2012 SunWise Essential Series 2 Information Folder and Individual Variable Annuity Contract including any Supplements, the terms of the Information Folder and Contract and Supplements prevail. For full product details and disclosure, refer to the Information Folder and Contract including any Supplements.

Sun Life Assurance Company of Canada, a member of the Sun Life Financial group of companies, is the sole issuer of the individual variable annuity contract providing for investment in SunWise Essential Series 2 segregated funds. A description of the key features of the applicable individual variable annuity contract is contained in the Information Folder. Any amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value. ®CI Investments, the CI Investments design, Harbour Advisors, Harbour Funds, Cambridge Advisors and Signature Global Advisors are registered trademarks of CI Investments Inc. ™Portfolio Series and Signature Funds are trademarks of CI Investments Inc. ®SunWise is a registered trademark of Sun Life Assurance Company of Canada. Sun Life Global Investments (Canada) Inc. is part of the Sun Life Financial group of companies. ®Fidelity Investments and the Fidelity design are registered trademarks of Fidelity Management & Research Co. ™TD Asset Management is a trademark of The Toronto-Dominion Bank, used under licence.

swes 2 advisor presentation november 1 v2 · • clients will likely require a retirement income...

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