Transamerica Life Canada is making changes to its Five for Life contract and launching a new Guaranteed Investment Fund product, the company said Wednesday.

The changes to Five for Life include an enhanced 5% Future Income Escalator (FIE) Bonus. Previously available for just 15 years, the FIE Bonus is now available in any given year where no withdrawals are made until the end of the year in which the annuitant turns 94. This change will make Five for Life more appealing to younger investors and will be applied to all existing policies, Transamerica says.

As well, the Guaranteed Lifetime Withdrawal Benefit (GLWB) fee will increase for new policies, but will not affect existing policies.

According to Geraldo Ferreira, vice president, investment products development at Transamerica Life Canada, “Five for Life has always been a great solution for mature Canadians who want to accumulate assets and supplement their retirement income. Now the enhanced bonus feature makes it a great accumulation product for younger
Investors, too.”

With the new extended bonus, investors can purchase a Five for Life contract as early as they want and receive a bonus every year — as long as they don’t make a withdrawal — regardless of market performance.

As for the the GLWB fee increase, Ferreira explains it this way, “In light of today’s volatile markets, and in order to stay competitive and continue offering this popular product, we have had to follow most of our competitors by applying an increase to the GLWB fee.”

“This increase will apply to new policies only,” he adds.

FuturePoint GIFs launched

Transamerica is also launching FuturePointGuaranteed Investment Funds (GIF), the first target date segregated funds available to independent advisors in Canada.

FuturePoint GIFs are used to manage risk according to a specific investment time frame.

“With FuturePoint, the fund’s assets are regularly monitored and adjusted. AEGON Capital Management gradually alters the asset mix, increasing the fixed- income allocation, as the funds approach their target dates. This asset allocation approach ensures that by the time an investor needs to draw on his or her assets, exposure to volatile investments is reduced,” explains Ferreira.

There are four guaranteed investment funds in the FuturePoint family, each with a target year. Investors simply select the fund that is closest to their target date. AEGON Capital Management is the portfolio manager, and Transamerica Life Canada provides the insurance guarantees.

FuturePoint GIFs are available through the newly launched Transamerica GIF contract.

This new offering contains 50 outstanding investment choices from 11 different fund families, including some of the most popular balanced funds, 15 pure equity options, and several distinct asset allocation portfolio solutions.

Policyholders are allowed to switch among the various fund families.

Along with a significantly expanded line-up, Transamerica GIF contracts provide a 100% Death Guarantee with an annual automatic Reset of the Death Guarantee, 75% Contract Maturity Guarantee, and all of the structural benefits that come with investing in a segregated funds contract.

IE