Hollard Guaranteed Income – helping you plan for your future

This investment is governed by the Section 10A exemption of the Income Tax Act, which provides for an exemption of the capital portion of a voluntary purchase annuity. The monthly income received by the annuitant is made up of capital plus interest. Therefore, it is only the interest portion of the income payment that is taxable in the hands of the annuitant.

Rates are revised weekly and are valid from the Monday to Saturday of each week. The rates are applicable on the date that you deposit your funds into the Hollard Wealth bank account and completed paperwork is received by Hollard.

Policies commence on the 1^st day of any given month. From the time your money is received by Hollard Life to the date of inception of the policy, you will be credited with interest. Please note the interest amount is already taken into account at quotation stage and included in the rate of return and therefore the Maturity Value. Hollard Wealth assumes the funds are received on the Monday of each week. Therefore, interest is calculated from the Monday until the day of commencement.

If the investment is quoted in advance, your first annuity is paid on the same day as the date of commencement. If it is quoted in arrears, your first annuity is paid one month after the date of commencement.

Due to the nature of this policy the 30-day cooling off period is not appropriate.

The minimum amount that you can invest is R 100,000.

It's a five-year term policy.

Any South African resident 18 years old last birthday and 80 next birthday may invest in the Guaranteed Income. This product is not available to pension funds, companies (including Section 21 companies), close corporations or trusts.

Upon death of the life assured, a death benefit will be paid out to the beneficiaries.

• Where no previous surrenders have been taken, the death benefit is guaranteed to be the Maturity Value as stated in the Policy Schedule.
• Where a part surrender has been taken from the endowment portion of the policy, the death benefit will be the fair value of the policy. The fair value of the policy will consist of the fair value of this endowment plus the commuted value of the monthly annuity payments on the temporary life annuity, as signed for in the policy application form and policy quote, from the date of maturity to the date of claim.

One surrender may be taken from the endowment portion of the investment. No surrenders may be taken from the temporary life annuity. This may only be in the form of a part surrender. At least One Rand (R1.00) needs to remain in the policy after a part surrender. At the time of surrender, the surrender value will be the fair value of the policy as determined by Hollard, less a surrender charge. The surrender charge of 1.00% will be calculated on the lesser of the endowment premium and the surrender value and will be subject to a minimum of R500.00. In terms of current legislation the surrender value in the first five years of the policy may not exceed the initial premium plus 5% per annum compounded since the policy commencement date. Upon a surrender request, Hollard Life will quote the surrender terms to the policyholder for acceptance before the transaction is processed. Please note that a surrender will affect the death benefit value.

• Collateral Cession

  You can use this policy as security to raise a loan from a lending agency or a registered South African bank. The value of such security is at the sole discretion of the lending agency and will in no way imply any liability, either directly or indiretly, on behalf of Hollard.

• Outright Cession

  Hollard will record a cession of the policy upon the receipt of a written request to do so, and will note the cession without expressing any opinion on the validity thereof. Due to the nature of the temporary life annuity, Hollard does not permit cessions on the annuity portion of this investment.

Hollard does not permit a loan to be taken on either portion of the policy.

In terms of the law, tax must be deducted at source i.e. by the life insurance company. The tax due on the taxable portion is deducted according to the tax tables - SITE and PAYE. The life insurance company will apply the tax tables as if all annuities paid by an insurer to an annuitant are the sole source of income.

Hollard will pay the tax across to the Receiver of Revenue and issue the policyholder with an IRP5 at the end of the tax year. If no tax has been deducted, Hollard will issue an IT3A to the policyholder. You can also provide Hollard with a tax directive.

No, the income is fixed for 60 months.

The investment maturity is not subject to CGT in the hands of the original policy owner, under current legislation,

Yes, your income is guaranteed as long as the policy has been in force for the 5-year term. In addition to this, any change in tax legislation made by the government may affect the guarantee of the income.