Hollard Guaranteed Income Plan

Hollard's Guaranteed Income Plan offers tax advantages and a five-year fixed monthly income.

Overview

Our Guaranteed Income Plan offers tax advantages and a five-year fixed monthly income investment.

Please note this product is currently closed to new business. 

Guaranteed Income is made up of two policies. An endowment policy provides a return of the premium after a five-year period and a temporary life annuity policy provides a five-year fixed monthly income.

Key  Features

Click here to learn more about our Guaranteed Income Plan.

Combined Policy

You invest a premium of

R100 000

Policy One

5 year temporary Life Annuity 

R22 790.90

Policy Two

5 year Endowment

R77 209.90

Payment of

R409.86 p/m

for 60 months (gross)*

Guaranteed Maturity value

paid out tax free

R100 000

These figures are for illustration purposes only
Minimum investment R100,000

* Please note that this annuity payment will cease after 60 months or on death of the life assured, whichever occurs first.

Features & Benefits

Understand the guaranteed returns offered by our Guaranteed Growth Plan

 

Features and Benefits Product Details
Tax Implications

Under current legislation, the guaranteed investment in the Endowment Policy is not subject to CGT or Income Tax in the hands of the Policyholder. Investments in Unit Trust Funds after the pay-out of the maturity proceeds will incur Income Tax and a CGT charge on withdrawal or switch out, specific to the Unit Trust Fund(s) selected.

The temporary life annuity policy is governed by the Section 10A exemption of the Income Tax Act, which allows an exemption of the capital portion of a voluntary purchase annuity. Only the interest portion of the income payment is taxable. 

Death Benefits

Endowment Policy:

  • Death benefits are paid by the policy on the death of the last life assured as specified for the policy. The policyholder will be the life assured unless they indicate otherwise or in the case of a policyholder which is a Trust.
  • Death benefit proceeds will be paid directly to the Beneficiaries as specified by the Policyholder and will not be paid to the estate of the deceased.
  • Avoids executors' fees.

The Temporary Life Annuity policy will terminate 60 months from inception or on the death of the life assured, whichever occurs first. No death benefits are payable from the policy. 

Access to Capital

Endowment Policy:

  • During the first five years of the policy you may take one full or partial withdrawal, the value of which is limited by legislation. A withdrawal from the policy during the five year period will affect your Guaranteed Maturity Value. A new policy value and related new maturity value will be calculated using market rates at the time of withdrawal, and surrender charges will apply.
  • After five years all restrictions on the policy fall away, and you may withdraw all or a portion of the value of the policy at any time, with no limit on the number of withdrawals which may be taken. Withdrawals from the policy after the restricted period will be processed free of charge, but will incur Capital Gains Tax at the rate specified.

Temporary Life Annuity Policy: No withdrawals other than the regular monthly payments may be taken from the policy. 

Other Product Features
  • The policy may be used as security (on the endowment portion only).
  • The policy guarantees a specific return after five years provided that the policy remains in force for the full period and there have been no surrenders. At this point you may choose to take the proceeds in cash, or continue to enjoy the tax benefits of the product by investing the proceeds into the range of Unit Trust Funds offered.
  • Investment rates are revised weekly and are valid from Monday to Saturday. Rates apply on the date you deposit your funds into Hollard Investment bank account and we receive all documentation.
  • Policies begin on the first day of any month – you will be credited with interest from the time your money is received by Hollard Investments to the date of inception of the policy.
  • Any South African resident from 18 to 80 years old may invest in Guaranteed Income. 

Product Charges

Product charges

The Guaranteed Investment Rate applied to the investment is net of all fees and tax. 

Product Details Product Charges 
Annual Product Charge Built into the Guaranteed Maturity Value rate for the first five years of the policy, and 0,5% per annum excl. VAT thereafter.
Income Tax Charge Built into the Guaranteed Maturity Value rate for the first five years of the policy, thereafter as specified for the Unit Trust Funds into which the policyholder chooses to invest.
Capital Gains Tax Charge Built into the Guaranteed Maturity Value rate for the first five years of the policy, thereafter as specified for the Unit Trust Funds into which the policyholder chooses to invest.
Dividend Withhold Tax 15% applicable for local dividends distributed by the Unit Trust Funds in which the policy invests after the 5 year restricted period.
Advisor Initial Commission

Maximum of 3% (excluding VAT).

Built into the Guaranteed Maturity Value rate for the first five years of the policy. 

Advisor Annual Advice Fee

Maximum of 1%  per annum (excluding VAT).

Applicable for investments of Guaranteed Maturity proceeds into Unit Trust Funds. Only applicable after the first five years of the policy.

Underlying Fund Fees

Applicable for investments of Guaranteed Maturity proceeds into Unit Trust Funds. Charged separately (see Fund List).

Surrender Charges

(Applicable during the first 5 years of the policy) 

Policy Year Surrender 
One 1.50% 
Two  1.25%
Three  0.80%
Four  0.50%
 Five  0.00%

FAQs

What are Guaranteed Investments?

Find out everything you need to know about Guaranteed Income Plan here.

Is the Hollard Guaranteed Income Plan open for new business?
The Hollard Guaranteed Income Plan is currently closed to new business.
What is the tax advantage of investing in a temporary life annuity policy?
Under current legislation, the guaranteed investment in the Endowment Policy is not subject to CGT or Income Tax in the hands of the Policyholder. Investments in Unit Trust Funds after the pay-out of the maturity proceeds will incur Income Tax and a CGT charge on withdrawal or switch out, specific to the Unit Trust Fund(s) selected. The temporary life annuity policy is governed by the Section 10A exemption of the Income Tax Act, which allows an exemption of the capital portion of a voluntary purchase annuity. Only the interest portion of the income payment is taxable.
What is the term of the combined policy?
The Endowment policy is open-ended and as such does not have a term. Policies have a five-year restriction period from inception during which there are withdrawal limitations and surrender charges in place. The Temporary Life annuity will pay monthly payments for 60 months (five years) or until the death of the life assured, whichever occurs first.
Who may invest in the Hollard Guaranteed Income Plan?
Any South African resident of 18 to 80 years old may invest in the Guaranteed Income Plan. This product is not available to pension funds, companies, closed corporations or trusts.
What happens if the life assured passes away?
On the death of the life assured, a death benefit will be paid out to the beneficiaries specified for the policy and the policy will cease to exist. During the five year restriction period if no previous surrenders have been taken, the death benefit is guaranteed to be the maturity value as stated in the policy schedule. If a surrender has been taken from the endowment policy, the death benefit will be the fair value of the policy. The fair value of the policy is of the value of the endowment plus the commuted value of the monthly annuity payments on the temporary life annuity. This is calculated from the date of maturity to the date of claim, as signed for in the policy application form and policy quote. Subsequent to the five year restriction period, the death benefit will be the market value of the Unit Trust Fund investments in the policy at the time of processing the death claim. The Temporary Life Annuity policy will terminate 60 months from inception or on the death of the life assured, whichever occurs first. No death benefits are payable from the policy.
Can surrenders be taken on the policy?
Endowment policy: During the first five years of the policy you may take one full or partial withdrawal, the value of which is limited by legislation. A withdrawal from the policy during the five year period will affect your Guaranteed Maturity Value. A new policy value and related new maturity value will be calculated using market rates at the time of withdrawal, and surrender charges will apply. After five years all restrictions on the policy fall away, and you may withdraw all or a portion of the value of the policy at any time, with no limit on the number of withdrawals which may be taken. Withdrawals from the policy after the restricted period will be processed free of charge, but will incur Capital Gains Tax at the rate specified. Temporary Life Annuity Policy: No withdrawals other than the regular monthly payments may be taken from the policy.
Can the endowment portion of the policy be ceded?
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 discretion of the lending agency and implies no liability, either directly or indirectly, to Hollard. Outright cession - Hollard Investments will record a cession of the policy on receiving a written request to do so, and will note the cession without expressing any opinion on its validity. Due to the nature of the temporary life annuity, Hollard Investments doesn’t permit cessions on the annuity portion of this investment.
Are loans permitted against the policy?
Hollard Investments doesn't permit a loan to be taken on either portion of the policy.
How is the tax calculated on the temporary life annuity policy?
In terms of the law, tax must be deducted at the 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 are the sole source of income. Hollard Investments will pay the tax 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 Investments will issue an IT3A. You can also give us a tax directive.
Can the income be changed mid-term?
No, the income is fixed for 60 months.
Is this investment subject to Capital Gains Tax (CGT)?
Under current legislation, the guaranteed investment maturity is not subject to CGT or Income Tax in the hands of the Policyholder. Investments in Unit Trust Funds after the pay-out of the maturity proceeds will incur Income Tax and a CGT charge on withdrawal or switch out, specific to the Unit Trust Fund(s) selected.
Is my return guaranteed?
Yes, your return will be guaranteed if the policy is in force for the five-year period. However, any change in tax legislation may affect the guarantee of the return. A surrender taken during the five-year period will also affect the return. Hollard Investments does not provide a guarantee on the value of the investment after the maturity date and pay-out of the guaranteed maturity value. The market value of the investment may fluctuate and go down as well as up, and past performance is not necessarily a guide to future performance. The Policyholder carries the investment and market risk which includes the possibility of losing capital.
Do I need a Financial Advisor to invest in this product?
Yes, Hollard Investments does not accept any investment into this product without a Financial Advisor being appointed.

Customer Support

Contact details

  • Tel: 0860 202 202
  • Email: hwnewbusiness@hollard.co.za
  • Fax: +27 11 351 3816
  • For compliments and complaints please fill in the Customer Support form on the right. Alternatively view our complaints process by clicking here.

Select and complete the form of your choice

  • Select the relevant form from the list below
  • Print and complete the form
  • Attached all required documentation
  • E-mail or fax the completed form to hwnewbusiness@hollard.co.za or +27 11 351 3816
Existing Investors FICA & FATCA Documents
Beneficiary Nomination Form FICA list
Death Claim Form 3rd Party Payment Letter
General Disclaimer No FSP Form Sighting of Original Documents
Surrender Request Form Site Visit Declaration
Financial Advisor Appointment Form Cohabitation Declaration
Maturity Form FATCA Questionnaire for Individuals
Security Cession Form FATCA Questionnaire for Legal Entities
Outright Cession Form
Static Details Change Form
Additional Lives Nomination
Switch Form
Unclaimed Benefit Withdrawal