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Wealth Update – Beneva Sweet Spots, DIY Maturity Guarantee and Contest Reminder

This week let’s start with Beneva’s sweet spots. Recall Beneva is the coming together of La Capitale and SSQ. Beneva has two product lines, Investment Accounts, available for Registered, Locked In and TFSA plans. Consider this product as a mutual fund with a 100% death benefit guarantee. It is an insurance-based investment, so it enjoys all of the beneficial features of segregated funds. The second product line is traditional segregated funds. Specifically, the Investment Accounts offer:

  • 100% Death Benefit: all contributions up to the age of 75 are 100% protected from market drawdowns. A 75% Death Benefit is available for contributions made after the age of 75.

  • Priced very competitively, very close or equal to the underlying mutual fund.

  • Online transaction application

On the segregated fund side, their 100/100 guaranteed contract can be opened to age 85 and receive assets after the age of 85 and retain a 100% death benefit. In other words, deposits after age 85 will continue to have a 100% death benefit guarantee as long as the contract is opened before age 85. Do-it-yourself maturity guarantee With the higher interest rates, this idea is a simple way to provide a two-year maturity guarantee for your clients. Consider a $50,000 investment that must be at least $50,000 in two years. Let’s invest the present value of $50,000 in a two-year GIA and the balance in an equity-based segregated fund.

  • If a two-year GIA is crediting 4.75%, we’ll need to invest $45,568 (present value = $50,000/(1.0475 x 1.0475)) in the GIA.

  • This leaves $4,432 to invest in the segregated fund.

  • If the segregated fund earns 5% each of the two years, your client will have $4,886 plus $50,000 in two years.

  • If, on the other hand, the segregated fund loses 6% per year, your client will have $3,944, plus $50,000 in two years.

  • Either way, your client’s investment is ahead (or at worst equal to $50,000) at the end of two years.

Don’t forget about our Summer contest.

In appreciation of your work with your clients, Assumption Life, Canada Life, Empire Life, and Industrial Alliance will be thanking advisors in the following ways.

  • Assumption Life is a prize to those that do their first piece of money business with Assumption Life. The minimum amount is $10,000.

  • Canada Life, top three advisors in each region for segregated fund sales

  • Empire Life, top three advisors in each region for segregated fund sales

  • Industrial Alliance, top three advisors in each region for segregated fund sales

Contest runs between July 10th and September 1st, only segregated fund sales through Fundserv are eligible. The regions are Ontario, Quebec and Atlantic Canada. We’ll start publishing results next week. As always, we look forward to your comments.

Scott Edgington, CEA Director, Advanced Planning, Wealth Qualified Financial Services

Jim Lyons Regional Vice President, Business Development - Wealth Qualified Financial Services

This communication reflects the views of Qualified Financial Services Inc. as of the date published. The information in this publication is for general information purposes only and is not to be construed as providing individual legal, tax, financial or other professional advice. Qualified Financial Services Inc. assumes no responsibility for any errors or omissions in the information contained herein nor for any reliance placed on such information. Please seek independent professional advice before making any decisions.


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