Discovery Invest finally launch “Guaranteed Return Plans”

Discovery still offer guaranteed return plans, which are often earning the best yield.


(Original post)

Well, hello again everyone.

I know it has been ages since i added anything to this blog. However, it is year end and we get a lot of queries regarding medical aid plan changes and so forth.

I attended the launch of the Discovery Invest Guaranteed Return Plans last week.

Basically, Discovery have launched the Discovery Guaranteed Growth Plan and the Discovery Guaranteed Income Plan.
They have been structured to offer clients peace of mind in these economically turbulent times.

In essence they offer you a guaranteed return on a lump sum contribution at the end of a 5 year term.

You have the choice of 2 product combinations:
Guaranteed Growth Plan
One of the highest guaranteed rates over a 5 year term available in South Africa. Structured through an endowment policy, which results in the proceeds at the end of 5 years being tax free.
Guaranteed Income Plan
Combination of an endowment policy and a voluntary annuity. At inception you decide how much to contribute to each. This allocation depends on the amount of required income you require during the 5 year term. At inception you may also choose if you would like your income to grow at 5, 10,15 or 20% per year.

You can include the Equity Enhancer Benefit in both the above products!
By giving up a small component of your guaranteed return , you may add the Equity Enhancer Benefit onto either of the abnove Guaranteed Return plans. In essence, this allows you to take advantage of the upside potential in the equity markets, whilst you are still getting a competitive guarantee.

So, finally Discovery have entered this market.

Summary of features for those that are interested:

Term                                            5 years

Minimum lump sum contribution    R40 000

Investment objective                    Guaranteed capital growth with or without guaranteed income.

Equity Enhancer Benefit                If you select this benefit and the TOP 40 index would have produced a higher fund value than the threshold amount on your policy, you will receive a percentage of this outperformance. The outperformance percentage applicable to your investment is shown on your quotation and policy schedule. Capital Gains Tax is applicable to any outperformance earned.

Proceeds on Maturity                    Take lump sum at maturity or re-invest in any portfolios available at that time.

Withdrawal                                  On withdrawal, you will receive the market value of the underlying investments backing your policy subject to a maximum of your original investment accumulated at the guaranteed return reflected on your policy schedule to the date of withdrawal. It is recommended that you remain invested over the full term as the market value of the underlying assets may be volatile during the 5 year term.

 Death Benefit                            On death prior to the maturity date, you will receive the maturity value of the endowment policy reflected on your policy schedule. Income from the Guaranteed Income Plan will continue to be paid until the end of the 5 year term.

Loan                                            Investors cannot take a loan against the Discovery Guaranteed Return Plans.

Estate Planning                            The investment will form part of the investors’ estate on death, and will be dealt with in terms of a Will and/ or the instructions of the executor of the investors’ estate.

Taxation                                    the taxable amount of the guaranteed income will be taxed according to income tax tables as released by SARS each year. The lump sum you receive at the end of the term will be paid tax-free from the endowment policy.

Type of investors allowed for this product    Only natural persons, and trusts with naqtural persons as beneficiaries, may take out this product. Absolute cessions may be made to natural persons and trusts, with natural persons as beneficiaries.

So, there you have the launch information in a nutshell.

Please be advised that i have taken this information from the product brochure handed out at the launch.

Feel free to use the contact form if you are interested in a quote for your lump sum.

Discovery Invest finally launch “Guaranteed Return Plans” was last modified: September 14th, 2016 by Kenny Williamson

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