A guaranteed income
for life’s ups and downs
(UK and International)
“How can I get a better return than
bank deposits now interest rates are
so low?”
Interest rates are currently at a record low, which has hit savings rates hard. The Income for Life Bond gives you the opportunity to get a better return on your money.
“How do I get a secure, reliable income
from my investment that won’t go
down in value?”
Turbulent markets have meant many people have lost money and are understandably concerned about how secure their money is. The Income for Life Bond guarantees you an ’income’ for as long as you live, regardless of whatever happens to the market.
“How do I take an income from my
investment but still leave something
for my family?”
You might be a higher rate taxpayer now and want a tax-efficient way of taking an income from your investment. Or you might be planning to work or retire abroad and not pay UK taxes. Or perhaps you may want to plan to minimise inheritance tax. The good news is the Income for Life Bond can be arranged tax-efficiently for your personal circumstances.
“How do I secure my income but not
lose out when the stock market starts
to recover?”
Over the past 20 years, equities have outperformed investing in cash* so although recent market volatility has been worrying, you won’t want to miss out when markets recover either. With the Income for Life Bond your income remains secure, plus you can lock-in potential growth annually.
* Source: Lipper; A Thompson Reuters Company, FTSE All Share Total Return discrete annual returns, September 2012.
A quick summary before you read on
This is a unique investment bond which aims to provide you with a secure ‘income’ for
life from your investment as well as the opportunity for growth.
Find out more on page
Guarantee an ‘income’ for life which can never go down in value 2
‘Lock-in’ investment gains, so your guaranteed ‘income’ can also go up 3
Certainty for your family with our guaranteed death benefits 3
Go for growth with our unique Managed Wealth Portfolios 5
Be tax-savvy and protect your investment from income and inheritance tax 6
A range of flexible choices for paying your Financial Adviser 7
Benefit from flexibility as your needs change 8
The MetLife Income for Life Bond
could be for you
You should also read the Bond Range Key Features Document that your Financial Adviser will give you, which clearly outlines the potential risks and provides further details on how the Income for Life Bond works.
When you allocate 100% of your investment to the Secure Income Option your bond will be referred to as an Income for Life Bond. If you allocate less than 100% of your investment to the Secure Income Option, your bond will be a MetLife Investment Bond. Where your bond is a MetLife Investment Bond you should read the MetLife Investment Bond Brochure, in addition to the MetLife Bond Range Key Features Document.
How it works
1. Secure Income Option - Immediate Income
If you choose to take an immediate ‘income’, the base that we will use to calculate this is your initial investment (less any Initial Adviser Charges you ask us to pay to your Financial Adviser). This is referred to as your initial Secure Income Base. Your guaranteed ‘income’ for life* is based on this amount and your age at the time you choose to take ‘income’. The Secure Income Option can be taken on a single or joint life basis.
The table below shows the Guaranteed Income Percentages that are used to calculate your income:
Age % Age % Age %
55 3.00 62 3.70 69 4.25 56 3.10 63 3.80 70 4.25 57 3.20 64 3.90 71 4.25 58 3.30 65 4.00 72 4.25 59 3.40 66 4.10 73 4.25 60 3.50 67 4.20 74 4.25 61 3.60 68 4.25 75 4.25
If you select an ‘income’ on a joint life basis, the age-related income percentages, referred to as Guaranteed Income Percentages, will be 0.25% lower and based on the age of the younger life.
A unique income guarantee for peace
of mind investing
To offer you real peace of mind, you can secure a guaranteed ‘income’
for life from age 55 with our Secure Income Option.
2. Secure Income Option - Deferred Income
If you don’t want to take your ‘income’ straight away, you can wait and benefit from guaranteed ‘income’ deferral step-ups of 3.50% for each full year ‘income’ is deferred.
Deferring your ‘income’ is especially useful if you want to know what your minimum ‘income’ will be, but you aren’t exactly sure when you want to take it.
Please refer to the MetLife Bond Range Key Features Document for more details about deferring your ‘income’ and how it could benefit you in your financial planning. By deferring, you’ll also be able to benefit from higher Guaranteed Income Percentages.
“ My Secure Income Base is £250,000 at age 65 and I choose to draw an immediate ‘income’, my guaranteed ‘income’ for life, regardless of market fluctuations, would be £10,000 p.a.”
“ £250,000 x 4.00% = £10,000 p.a.
Secure Income Base x Guaranteed Income Percentage
“ So, if my Secure Income Base was £250,000 at age 65 and I defer taking an ‘income’ for three years, my annual guaranteed ‘income’ for life, regardless of market fluctuations, would never be less than £11,740 p.a” £250,000 + (£250,000 x 10.50%) = £276,250
Income Deferral Base + 3.50% annual step-up for each full year income is deferred = Secure Income Base
£276,250 x 4.25% = £11,740 p.a
Secure Income Base x Guaranteed Income Percentage = Guaranteed income for life
* Please note, the Secure Income Option offers a guaranteed Income for Life, your capital investment is not guaranteed. If you choose to surrender your investment from the Secure Income Option, you will receive the fund value at that time, rather than the Secure Income Base.
The examples in this brochure assume you will be paying your Financial Adviser
directly. If you choose to pay for advice through investments with the Secure Income
Option, following each payment made, your fund value and guarantee base will be
recalculated to reflect the amount we have paid to your Financial Adviser.
To find out more about your options for paying for advice, please refer to the
‘Paying your Adviser’ section in this brochure and your MetLife Bond Range Key
Features Document.
4. Guaranteed death benefit
With the Income for Life Bond, your beneficiaries will also benefit from the safety net of our guarantees, so they won’t lose out if the value of your investment suddenly drops due to market movements.
Your beneficiaries are guaranteed to receive either your initial Secure Income Base (less any withdrawals) or 100.1% of the value of your bond, whichever is the greater on the death of the life covered under the guarantee*.
And, if you have taken out the Income for Life on a joint life basis, the guaranteed death benefit is guaranteed to be paid on the second Secure Income Life to die*.
“ If my fund value is £250,000 when I die, but my initial Secure Income Base (less any withdrawals I’ve made) is valued at £260,000, my beneficiaries will receive £260,000 (subject to any inheritance tax or income tax that may be payable).”
Please note, graph is for illustrative purposes only.
* This is on the basis that the policyholder, life assured and and Secure Income Life is the same person (or for joint life policies, the same people).
3. Secure Income Reviews
Each year, on the anniversary of your initial investment, we will review your investment – known as a Secure Income Review. This could be the perfect time to meet with your Financial Adviser and check that your financial planning is on track and that the MetLife Income for Life Bond continues to meet your needs.
At this time, if your fund value has grown above your Secure Income Base, we will lock-in this new higher figure. If the market has fallen and your fund value is less than your Secure Income Base, your Secure Income Base will remain unchanged.
If you’ve delayed taking your ‘income’, your Secure Income Base will grow through ‘income’ deferral step-ups of 3.50% for each full year ‘income’ is deferred.
The graph below illustrates how the Secure Income Reviews might work for someone who has deferred taking an ‘income’.
Year 7 Year 6 Year 5 £150,000 £200,000 £250,000 £300,000 £350,000 £400,000 £450,000
Fund value Secure Income Base Secure Income Review
Year 1 Year 2 Year 3 Year 4 Year 8
3.50% Income Deferral Increase
Year 9 Year 10 0
Investing for growth
We offer risk-rated portfolios which have been carefully selected and
are reviewed on a daily basis to ensure your investment is not only secure, but
has the potential to grow, and when used in conjunction with the Secure Income
Option, secure that growth on an annual basis.
Guaranteed Portfolios
The MetLife Managed Wealth Portfolios
The Secure Income Option is currently available with our MetLife Managed Wealth Portfolio Foundation and Min funds. These portfolios are specifically designed with a view to managing the effect of large market swings, and in doing so are intended to result in smoother, more consistent returns over time. The extent to which market gains are achieved will be determined by the asset classes and pre-defined asset allocations mentioned below.
The funds in which the MetLife Managed Wealth Portfolios currently invest are managed by BlackRock*, one of the world’s leading providers of investment, advisory and risk management solutions. Through the BlackRock funds, each of the MetLife Managed Wealth Portfolios have exposure (via funds and other instruments) to global equities and their equivalents, fixed interest (such as UK gilts and corporate bonds), currencies, cash and cash equivalents.
For a full description of the financial instruments in which the MetLife Managed Wealth Portfolios invest and how the portfolios work, please refer to the MetLife Fund List.
Other Portfolios
MetLife also offer a range of Protected Growth Funds, non-guaranteed portfolios and a cash fund. Depending upon your circumstances and investment objectives, these alternatives may be more appropriate.
To learn more about the funds offered by MetLife, and to better understand which option will best suit your requirements you should refer to the MetLife Fund List and speak to your Financial Adviser.
* BlackRock consents to the references made to it in this document. Neither BlackRock Fund Managers Limited nor any other company within the BlackRock Group of companies makes any representation or warranties as to the completeness, accuracy or appropriateness of any information contained in this document, other than that relating to the BlackRock funds.
MetLife Managed Wealth Portfolio - Foundation
Offers a maximum exposure to equities of 40% and aims to hold a fixed exposure of 60% to fixed interest. Having the greatest exposure to fixed interest of all Managed Wealth Portfolios, the Foundation portfolio is likely to have the smallest swings in its value over time.
MetLife Managed Wealth Portfolio - Min
Offers a maximum exposure to equities of 50% and aims to hold a fixed exposure of 50% to fixed interest. The Min portfolio also offers a high level of exposure to fixed interest, but with higher exposure to equities than the Foundation portfolio, meaning it is likely to have slightly wider swings in its value over time.
Tax-savvy investing
For income tax planning
Your Income for Life Bond allows you to take regular withdrawals tax-efficiently, for
a period of 20 years. If in any one year these withdrawals total 5%
^or less of your
premium, the withdrawals are treated as a return of capital and any gain is not taxed
as income at that time. 5% withdrawals can be taken tax efficiently for 20 years. If
however your fund has grown in value and your ‘income’ is more than 5% of your
premium, you may be liable to pay income tax. In this instance, you may wish to utilise
the Tax Maximiser Option.
In addition, to maximise tax-efficiency, you can invest in either our international or UK
version of the Bond.
For estate planning
You can use the Income for Life Bond with a range of trusts, making it an effective
estate planning tool. We suggest that you discuss with your Financial Adviser how the
Income for Life Bond should be arranged to suit your personal circumstances and tax
situation. The tax treatment of this product could also change in the future.
The International Income for Life Bond
If you are a basic, higher or additional rate taxpayer, plan to work or retire abroad and are currently a UK resident, then the international version of our Income for Life Bond could be very tax-efficient for you.
That is because our international bond does not pay UK tax on any growth, so your investment is not taxed as it grows. You are still eligible for the 5% per year tax-deferred withdrawals and any taxation will only arise when this limit is exceeded and will depend on your tax situation at the time.
The UK Income for Life Bond
UK investment bonds pay the equivalent of basic rate tax at source within the bond. If you are a non-taxpayer or basic rate taxpayer when you encash your Income for Life Bond, you may have no further tax to pay.
If you are a higher or additional rate taxpayer or you become one when the average gain in the value of your Income for Life Bond is added to your other income, you will have to pay income tax based on the difference between the basic and higher or additional rate tax.
The Tax Maximiser Option
The Tax Maximiser Option effectively restarts your tax position on your Income for Life Bond. This means your annual 5% allowance will be based on your new higher rebased figure, allowing you to take a higher ‘income’ without any immediate tax liability. You can choose to exercise the Tax Maximiser Option at any policy anniversary after the first five years from your initial investment. You can only exercise this option once.*
“If I invest £250,000 and by year eight my Income for Life Bond is worth £290,000, I can exercise the Tax Maximiser Option. By doing this, the 5% I can withdraw tax- efficiently each year will now be based on this higher amount. Meaning the amount I can withdraw has increased from £12,500 to £14,500”
^ This also applies to any amounts you instruct us to pay to your Financial Adviser.
Paying your Adviser - a range of flexible choices
At MetLife, we always recommend taking expert advice. That’s why all our retirement
and investment products are available exclusively through Financial Advisers.
You can choose to pay your Financial Adviser directly, or you can pay your Financial Adviser through the money you invest in your MetLife Income for Life Bond. If you choose to pay your Financial Adviser through your MetLife Income for Life Bond, we will deduct the charges from your bond in order to make this payment. You should review your instruction to us regularly with your Financial Adviser. If you choose to pay for your advice through investments under the Secure Income Option, this will reduce the value of your guaranteed benefits. You should agree with your Adviser on the option that works best for both of you.
Adviser charges - at a glance
Initial Adviser Charge
An upfront, one-off payment to your Financial Adviser. It can be a specific amount or a percentage of your investment.
Ad hoc Adviser Charge
A one-off payment of a fixed amount to your Financial Adviser, as and when you receive advice or services.
Ongoing Adviser Charge
A regular payment for ongoing advice and services that you receive from your Financial Adviser. This can be a fixed amount or a percentage of your fund value.
Please refer to the MetLife Bond Range Key Features Document and speak to your Financial Adviser for more information.
Whatever stage you’re at in your financial planning journey, the MetLife Income for
Life Bond offers a unique investment solution which aims to provide you with a secure
‘income’ for life as well as the opportunity for growth.
The MetLife Income for Life Bond gives you access to our innovative MetLife Managed
Weath Portfolios, your Financial Adviser can help you select the approach that suits
you best.
For added flexibility, you can agree with your Financial Adviser on the way you pay for
their professional services. Here’s an example of how one of our investors is making
the MetLife Income for Life Bond work for them.
How will the MetLife Income for Life Bond
work for you?
Pre-retirement, building ‘income’
55 year old Jenny is planning to retire in the next 10 years and is looking to protect and grow the money she has put aside to boost her income in retirement and help pay for the travelling she has planned. Jenny has savings worth £50,000 and asks her Financial Adviser how she can protect the value of her savings and still have the potential to benefit from market growth until she is ready to retire. The MetLife Income for Life Bond provides Jenny with the mix of certainty and opportunity she is looking for.
Jenny decides to invest all of her savings in the MetLife Managed Wealth Portfolio – Foundation. In order to minimise exposure to the stock market, she chooses to guarantee 100% of her investment with the Secure Income Option. Jenny and her Financial Adviser discuss the different options available for paying for the service they provide. She opts to pay her Financial Adviser for any ongoing advice from her guaranteed investment.
As she is not ready to retire yet, Jenny knows that by not taking an income she can take advantage of the annual 3.50% income deferral step-ups provided by the Secure Income Option until she is ready to retire.
Jenny also recognises that following each time she makes a payment her fund value and guarantee benefits will be recalculated to reflect the amount she has paid to her Financial Adviser.
Built-in flexibility to suit your changing needs
We know that your circumstances and needs might change in the future,
so the Income for Life Bond has been designed to be as flexible as possible.
Here’s how:
• You can invest from as little as £10,000 and can top up into your guaranteed portfolio with a minimum of £5,000.
• You can access your investment at any time and can take all or some of your money if needed.* • Guaranteed ‘income’ can start from age 55.
• You can decide to take your ‘income’ immediately or wait until a later date.
• You can decide to take your ‘income’ monthly, quarterly, every four months, half-yearly or annually.
• If you decide you don’t want your ‘income’ guaranteed any more, you can choose to invest in a wider range of portfolios (talk to your Financial Adviser about our Investment Bond).
• You can invest individually or jointly.
• Death benefits can be paid on a single life or joint lives assured.
MetLife Income for Life Bond
A quick recap of all the benefits
Guaranteed ‘income’ for life
Unlimited growth locked-in annually
Guaranteed Income Deferral Increase of 3.50% for each full year ‘income’ is deferred
Invest in our innovative MetLife Managed Wealth Portfolios
Tax Maximiser Option
Guaranteed death benefit
International version available
Income tax benefits
Estate planning benefits, when used with trusts
Access to your money when you need it
Investing for your future with MetLife
Talk to your Financial Adviser today to find out more about how
the MetLife Income for Life Bond could work for you.
At MetLife, our aim is a simple one: to help you build
financial freedom for your future by offering financial
security, whatever the economic conditions. In today’s
uncertain world, this is even more important than ever.
That’s why we offer a range of unique, unit-linked
guarantees across our investment and retirement
products that offer capital or income security, as
well as the opportunity to lock-in investment gains.
Products and services are offered by MetLife Europe Limited which is an affiliate of MetLife, Inc. and operates under the “MetLife” brand.
MetLife Europe Limited is authorised by the Central Bank of Ireland and subject to limited regulation by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request. Registered address: 20 on Hatch, Lower Hatch Street, Dublin 2, Ireland. Registration number 415123. UK branch address: One Canada Square, Canary Wharf, London E14 5AA. Branch registration number BR008866. www.metlife.co.uk
WM15 00 024 l 0586.9.MAR 2015
or call us on 0845 370 6040.
If you are looking for a Financial Adviser, you can find one close to you at www.unbiased.co.uk You can also visit us at www.metlife.co.uk for more information
