SunWise Elite Plus | Sales Process

4. Structure an Effective Contract

Structure your client’s contract to ensure desired effect

SunWise Elite Plus allows investors the flexibility to structure contracts in accordance with their needs.

Choosing the right protection option

Once the asset mix has been selected, investors can choose the type of protection that best fits their objectives and their investment stage:

  • > Accumulation stage: Class B or C units provide varying levels of principal protection to fit investor’s needs.

  • > Preparing for retirement or retired:

    Class B (GWB) units to provide

    guaranteed income
    100% principal protection at death to maximize the value received by beneficiaries

     
    Class C (GWB) units to provide

    guaranteed income
    minimum principal protection

Investors can also choose riders for additional death benefits such as the
4% Annual Automatic Death Benefit Reset and the Earnings Enhancement Benefit.

GMWB Survivor Benefits

Transferring income guarantees on death
As insurance contracts, segregated fund policies can be set up in a variety of ways to provide effective estate planning solutions, or to transfer the right to receive the income guarantee.

With your client, you need to ensure that the contract is set up properly so that primary successors are taken care of on the annuitant’s passing. This is particularly relevant for those choosing the GMWB rider.

For non-registered accounts, one of the most effective structures to continue receiving income is Joint Ownership with Joint Annuitants.

For registered accounts, the spouse will continue to receive payments on the death of the owner if they are named as beneficiary.

For Non-Registered policies

Ownership / Policy type Annuitant LWA Annuitant On death
of annuitant
Effect on
GWA option
Effect on LWA option
Joint tenants with rights of survivorship (JTWROS) Joint annuitants – same as joint owners Older Joint Annuitant Policy continues, survivor inherits the policy. No death benefit paid. Payments continue to survivor. On death of older annuitant, the surviving annuitant becomes the new LWA annuitant. Provided the new LWA annuitant is over 65, the LWA Threshold Amount is reset to the greater of market value and the Remaining GWB. The LWA is recalculated to 5% of the new LWA Threshold Amount. LWA payments are only calculated after December 31, of the year in which the new LWA annuitant turns 65.

On death of younger annuitant, LWA payments continue to LWA annuitant as survivor.

In both cases, survivor may elect the GWA rather than the LWA.

Quebec: Joint Policy Joint annuitants – same as joint owners Older Joint Annuitant Policy continues. If survivor named subrogated owner, survivor inherits the policy. No death benefit paid. Payments continue to survivor. On death of older annuitant, the surviving annuitant becomes the new LWA annuitant. Provided the new LWA annuitant is over 65, the LWA Threshold Amount is reset to the greater of market value and the Remaining GWB. The LWA is recalculated to 5% of the new LWA Threshold Amount. LWA payments are only calculated after December 31, of the year in which the new LWA annuitant turns 65.

On death of younger annuitant, LWA payments continue to LWA annuitant as survivor.

In both cases, survivor may elect the GWA rather than the LWA.

 

For Registered policies

Policy type Beneficiary On death Effect on GWA option Effect on LWA option
RRSP Spouse The policy terminates and the spouse has the option to:

a) transfer monies and existing benefits
intact to a personal RRSP contract.
b) transfer the death benefit to a personal
RRSP contract.
c) receive the death benefit in cash.
If transfer of all benefits is chosen, payments are made to the spouse.

In the other cases (b) and (c) no further payments are made.
If transfer of all benefits is chosen provided the spouse is over 65, the LWA Threshold Amount is reset to the greater of market value and the Remaining GWB. The LWA is recalculated to 5% of the new LWA Threshold Amount. The LWA payments are only calculated after December 31 of the year in which the spouse turns 65.

The spouse may elect the GWA rather than the LWA.

In the other cases (b) and (c) no further payments are made.

RRIF Spouse The spouse has the option to:

a) elect spousal continuance of the benefits and assume the policy as successor.
b) terminate the policy and transfer the death benefit to a personal RRIF contract.
c) terminate the policy and receive the death benefit in cash.
If policy is assumed, payments are made to spouse, otherwise policy is terminated, and no further payments are paid. If policy is assumed, provided the spouse is over 65, the LWA Threshold Amount is reset to the greater of market value and the Remaining GWB. LWA is recalculated to 5% of the new LWA Threshold. The LWA payments are only calculated after December 31 of the year in which the spouse turns 65.

The spouse may also elect GWA rather than the LWA.

In the other cases (b) and (c) no further payments are made.

 

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