Our Guaranteed Income Plan offers tax advantages and a five-year fixed monthly income investment.
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.
You invest a premium of
5 year temporary Life Annuity
5 year Endowment
for 60 months (gross)*
Guaranteed Maturity value
paid out tax free
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 and Benefits of our Guaranteed Income Plan
|Features and Benefits||Product Details|
|Tax Implications||This 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.|
|Access to Capital||
You can surrender your policy in full or in part from the endowment policy portion only. (Only one surrender is permitted.) A new policy value and related new maturity value will be calculated using market rates at the time.
Please note: Surrender charges will apply on a time-based scale.
|Other Product Features||
The Guaranteed Investment Rate applied to the investment is net of all fees.
What are Guaranteed Investments?
Find out everything you need to know about Guaranteed Growth Plan here.
- What is the tax advantage of investing in a temporary life annuity policy?
- This investment 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. The monthly income received is made up of capital plus interest. So only the interest portion of the income payment is taxable.
- When do I receive a secure rate of return?
- Rates are revised weekly and are valid from Monday to Saturday. The rates are applicable on the date you deposit your funds into the Hollard Investment bank account and we receive your completed documentation.
- What happens to my money when it is in the Hollard Investment bank account?
- Policies commence on the 1st of any month. You'll be credited with interest from the time Hollard Investments receives your money to the date of inception of the policy. The interest amount is taken into account at quotation stage and included in the rate of return and, therefore, the maturity value. Hollard Investments assumes the funds are received on Mondays, so interest is calculated from Monday to the day of commencement.
- When is my first annuity payment made?
- If the investment is quoted in advance, your first annuity is paid on the same day as the date of commencement. If it’s quoted in arrears, your first annuity is paid one month after the date of commencement.
- Does the 30-day cooling-off period apply?
- Due to the nature of this policy, the 30-day cooling-off period does not apply.
- What is the minimum investment amount?
- The minimum amount that you can invest is R100,000.
- What is the term of the combined policy?
- The Guaranteed Income policy has a five-year term.
- 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?
- 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. On the death of the life assured, a death benefit will be paid out to the beneficiaries. 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.
- Can surrenders be taken on the policy?
- Only one surrender - either part or full - may be taken from the fair value of the endowment policy portion of the investment. A new policy value and related new maturity value will be calculated at market rates at the time. Please note that surrender charges will apply on a time-based scale.
- 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 investment maturity is not subject to CGT in the hands of the original policy owner.
- Is my income guaranteed?
- Yes, your income is guaranteed if the policy has been in force for the five-year term. However, a change in tax legislation may affect the guarantee.
- 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.
Select and complete the form of your choice
- Select the relevant form from the list below
- If you are completing an Investment Application form, please appoint a Financial Advisor
- Applications for this investment will not be processed without a Financial Advisor being appointed. Your Financial Advisor will be required to request a valid quote from Hollard Investments for all new application
- Print and complete the form
- Attached all required documentation, including FICA documentation (for new investment applications)
- E-mail or fax the completed form to email@example.com or +27 11 351 3816
- Tel: 0860 202 202
- Email: firstname.lastname@example.org
- Fax: +27 11 351 3816
- For compliments and complaints, please fill in the form.