discovery local endowments · if you die while invested in an endowment plan, we will boost your...

LOCAL ENDOWMENTS

DISCOVERY

CONTENTSLOCAL ENDOWMENTS

Read the Endowment Plans

Fact File relevant to your investment

Features of an Endowment PlanTax efficiency for individuals who have an average tax rate of 30% or more.

You can nominate a beneficiary for your investment proceeds in the event of your death.

There are limitations on your access to your money

There are limitations on how much you can add to your investment.

An endowment is an investment plan that helps you save over the medium to long term. This investment offers estate benefits and tax- efficient structures.

WHAT IS AN ENDOWMENT?



AT A GLANCE

INVESTMENT TERM

Medium term Long term To retirement

When you invest a lump-sum contribution, you can get rewarded for investing longer, with a boost to your investment.

If you invest recurring contributions, we reward you with refunds on the admin fees you pay.

MINIMUM INVESTMENT AMOUNT

Lump sum Recurring

R60 000 R850

Extra contributions within limits

INVESTMENT GUARANTEES

Lump sum Recurring

No guarantee of performance

You can protect your investment against unexpected life events with a Contribution Waiver that pays your contributions for you if you become severely ill or disabled during the investment term.This is available at an additional risk premium.



TAX

30% on investment growth

20% on local dividends

12% on capital gains

No tax at the end of your investment1

1 We deduct the tax during the investment term and pay it to SARS on your behalf.

FEES

Discovery fees

Financial adviser fees

Investment manager fees

READ THE RELEVANT FACT FILES FOR DETAILS OF:

When you can access your money before five years

When extra contributions will start a new investment

How the fees and refunds work

How the Contribution Waiver works

AT A GLANCE - CONTINUED



DECIDING HOW MUCH TO INVEST

A LUMP SUM OR RECURRING CONTRIBUTIONS

MINIMUM INVESTMENT AMOUNT

Investment amount

Recurring R850

Lump sum R60 000

Our Endowment Plans have minimum investment amounts, depending on your investment frequency.

while invested in this

plan, and live a healthy lifestyle, we will

boost your fund value by up to 15%.



INVESTMENT BOOSTS FOR LUMP-SUM ENDOWMENTS

The behaviour The boosts

Invest longer The boost: Get up to 20% extra on your initial investment

Invest in an Endowmentfor at least five years

Get rewarded with a boost of

up to 20%Live well The boost: Get a boost

on your investment of up to 15% in the event of your death

Manage your Vitality status by living a healthy lifestyle

Vita

lity

stat

us

Our Endowment Plans are medium- to long-term investments that give you access to a wide range of funds, managed by leading fund managers.

These plans might suit you if you can keep your money invested for at least five years. And we reward you the longer you stay invested and the healthier you become. Whether you choose to invest a lump-sum or monthly contribution, we have a plan to meet your needs.

Different boost percentages apply depending on the portion you invest in qualifying Discovery funds.

WHY THE DISCOVERY ENDOWMENT PLAN?



Your behaviour What you get

When you invest for longer

You will receive a boost to your investment of up to 20% of your initial lump-sum investment.

When you live a healthy lifestyle

If you die while invested in an Endowment Plan, we will boost your fund value by up to 15%.

Invest longer

INVEST FOR LONGER AND LIVE WELL - LUMP SUM

With our Endowment Plan, you can get boosts added to your investment for investing longer and living well. Your boost is held separately and grows at a guaranteed rate of 4.2% a year.

Live well



FEE REFUND

Up to 45% of your yearly admin fees paid back into

your investment

PROTECTION FOR BENEFICIARIES

IF YOU DIE

A boost to your investment value for your beneficiaries

if you die while invested

PROTECTION IF YOU BECOME SEVERELY ILL OR DISABLED

A contribution waiver that continues to pay your

contributions if you suffer a severe illness and/or disability

(for an extra premium)

The details of the boosts, fee discounts and protection we offer are set out in the Fact File relevant to your investment at You can also speak to your financial adviser for advice.

RECURRING CONTRIBUTIONS

If you choose to make monthly contributions, you can get fee refunds and protection for you and your beneficiaries if you die, become severely ill or disabled.

https://www.discovery.co.za/portal/



You can invest in funds managed by top external investment managers.

We offer both local and offshore investment opportunities.

THERE ARE ALMOST 200 FUNDS TO CHOOSE FROM

A WIDE CHOICE OF FUNDS TO INVEST IN

YOUR PLAN IS A COLLECTION OF FUNDS

Once you have chosen your investment plan, you decide which funds to invest your money into. Your decision should align with the investment strategy that you and your financial adviser agreed on and the investment goals you have.

We can offer you access to a range of unit trust funds across various fund managers through a single entry point. This means you can invest in a Discovery Endowment Plan and choose investment funds that are managed by leading investment managers. Discovery funds (except the Discovery Money Market Fund) qualify for boosts on your investment. The list of qualifying funds may be updated from time to time and can be seen on individual fund fact sheets available at

You can invest in Discovery funds where our investment managers pick the right blend of aset classes (shares, bonds, cash, property and so on) to reach your investment goals. We have uniquely designed funds that make it easier for you to get what you want from your investment.




FEES FOR YOUR INVESTMENT

THERE ARE CERTAIN FEES THAT APPLY TO OUR ENDOWMENT PLANS

FEES TO DISCOVERY INVEST

We charge initial and yearly admin fees on your investment.

FEES TO THE INVESTMENT MANAGER

Investment managers may charge initial and ongoing fees. You can find these

fees on the relevant fund fact sheets available at

FEES TO YOUR FINANCIAL ADVISER

Financial advisers will charge initial and ongoing advice fees

for the advice they give.

Refer to the relevant Fact File for more information about all fees.


READ THE RELEVANT FACT FILE AND SPEAK TO YOUR FINANCIAL ADVISERThe details of the features we offer are set out in the relevant Fact File at

Speak to your financial adviser to help you make informed decisions about your investments. If you don’t have a financial adviser, you can contact our call centre on 0860 67 57 77.

This brochure is meant for information purposes only and should not be taken as financial advice.

Discovery Life Investment Services Pty (Ltd), registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life insurance products are underwritten by Discovery Life Ltd, registration number: 1966/003901/06, an authorised financial service provider and registered credit provider, NCA Reg No NCRCP3555. All boosts are offered through the insurer, Discovery Life Limited. The insurer reserves the right to review and change the qualifying requirements for boosts at any time. Product Rules and Terms and Conditions Apply.

Discovery Invest

www.discovery.co.za


https://www.instagram.com/discovery_sa/?hl=en


https://twitter.com/discovery_sa?lang=en

https://www.youtube.com/user/DiscoverySA

https://www.facebook.com/discoverysouthafrica/

There are restriction periods

There are limits for when you can withdraw money from your investment, and how much. These limits are referred to as restriction periods and are set by the law on endowments, and not by Discovery. The restriction periods apply to:

The first five years of your investment

The five years from the first day of any month that the 20% rule takes effect (see below).

During a restriction period

You cannot make more than one withdrawal during a restriction period. This applies whether you withdraw a portion or the most you are allowed. There are no exceptions to this rule.

The most you can withdraw is the total of your contributions plus 5% compound growth per year.

WHEN NEW RESTRICTION PERIODS START: THE 20% RULE

A new restriction period starts if:

Your contributions in the second year of the investment are 20% or more above your total contributions in the first year.

Your contributions in any other year of your investment are 20% or more above the higher of your total contributions in the previous two years.

Example of the 20% rule: Your contributions for the last three years were:

2014: R12 000

2015: R14 000

2016: R20 000

In 2016, you paid the higher of your total contributions in the previous two years. The 2016 contributions are over 20% more than R14 000.

(20% of R14 000 = R2 800. R14 000 + 2 800 = R16 800)

So a new restriction period will start for the amount above R16 800 (R20 000 - R16 800 = R3 200).

Total contributions include recurring contributions, any automatic contribution increases, and extra contributions (called ad hoc contributions).

Any contribution increases in the first year of the investment will not start a new restriction period.

LINKED PAGESTAKING MONEY OUT OF YOUR INVESTMENT



BoostInvestment value

30% of your boost pays into your

investment after five years and the rest

pays five years later.

Invest longer

Get a boost o

f up to

20% to your

initial in

vestment

BOOSTS ARE KEPT SEPARATELY FROM YOUR MAIN INVESTMENT

The boost you receive from investing for longer is kept separate from your main investment. The boost is up to 20% of your initial investment value and grows at a guaranteed 4.2% each year for 10 years.

30% of your boost pays into your investment after five years and the rest pays five years later.



THIS IS HOW TAX ON YOUR INVESTMENT PLAN WORKS

An endowment is a tax-efficient structure where investment growth (interest, rental income and foreign dividends) within your Endowment Plan is taxed at 30% while capital gains are taxed at 12% for individual investors. Discovery Invest will also need to withhold dividends tax at a rate of up to 20%.

This tax will be calculated by Discovery and deducted by Discovery Invest against your policy on your behalf. Capital gains tax will become payable when you realise your investment at the end of your investment term, as this will entail a selling of units. The capital gains tax will be paid within the portfolio.



WHAT HAPPENS TO YOUR INVESTMENT WHEN YOU DIE

You chose an investment either with or without a life assured. Beneficiaries are people you choose to receive the benefits of the investment if the life assured dies. The table below sets out what happens if the life assured dies while the investment is in force.

If you die while invested in an Endowment Plan, we will add a boost of up to 15% to your investment depending on your Vitality status at the date of death. This boost is paid on the first R2 million of the investment value at the date of death.

When the investment ends Who we pay

A plan without a life assured

The investment continues after your death.We will pay the proceeds from your investment according to the instructions of the appointed executor of your deceased estate.

A plan with a life assured

The investment ends on the date that the last life assured dies.

We pay the investment value to the beneficiaries named on the plan. The amount we pay is the investment value on the date that the last life assured dies, less any fees you still owe on the plan (if any). Where there are no nominated beneficiaries, we will pay your estate.

Your policy schedule will show whether you have chosen a life assured on your plan.



WHAT HAPPENS TO YOUR INVESTMENT WHEN YOU DIE

You chose an investment either with or without a life assured. Beneficiaries are people you choose to receive the benefits of the investment if the life assured dies. The table below sets out what happens if the life assured dies while the investment is in force.

If you die while invested in an Endowment Plan, we will add a boost of up to 15% to your investment. This boost is designed to protect your beneficiaries against negative market movements.

When the investment ends Who we pay

A plan without a life assured

The investment continues after your death.We will transfer your investment according to the directions of the executor of your deceased estate.

A plan with a life assured

The investment ends on the date that the last life assured dies.

We pay the investment value to the beneficiaries named on the plan. The amount we pay is the investment value on the date that the last life assured dies, less any fees you still owe on the plan (if any).

Your policy schedule will show if you have a life assured on your policy.



ADVISER

ADVANTAGES OF USING A FINANCIAL ADVISERTHINGS TO DISCUSS WITH YOUR FINANCIAL ADVISER

Longevity

We’re living longer – and that has changed traditional retirement practice. A potentially longer retirement timeline means that you need to save more money and that you need to invest your money differently in the years leading up to retirement.

The unpredictable nature of markets

Markets are unpredictable. They can go up one day and down the next. These market changes are risks to your investment because if you have to withdraw your money while there is a market downturn, you might lose money on your investment. When you have a longer investment horizon you can afford more risk, but as retirement approaches you need to consider moving money to lower-risk investments.

The impact of inflation

Inflation is the rise in the cost of living. This means you will pay more for the same goods and services tomorrow than you do today. When you are investing for your future, it’s important that the money you invest grows at the same or higher rate than inflation.

Compound interest

Because of compound interest, the more time you have available to invest, the greater your benefits will be in retirement.

Diversifying

It’s important to spread your investments among different asset classes, such as equities (shares), bonds, property and cash. This will ensure that your risk is spread – so if one asset class performs poorly, the value of your other investments can make up for this.

How much risk you can afford to take

Your investment strategy starts with understanding your attitude to risk. Generally, the higher the potential risk of an investment, the higher the potential return. Different asset classes like cash, bonds, property and equities have different levels of expected risk and return; cash has low levels of expected risk and return, while equity has high levels of expected risk and return.

Knowledgeable about managing money

Financial advisers are qualified in financial planning and can help you decide on – and keep track of – your investment goals, savings strategies and retirement options.

High standards of competence

To give expert financial advice, financial advisers need to meet certain standards of competence, including professional qualifications, passing regulatory examinations and undergoing training.

Licensed to sell certain products

We only allow financial advisers who are registered with the Financial Sector Conduct Authority (FSCA) to sell you specific financial products. They are required to have extensive knowledge of the product they are recommending to you, and they must be competent (professional and skilled) in the financial advice they provide.

Objective advice

Our code of conduct for financial advisers is strict: our advisers must be able to give clients objective advice about the products they buy so that they can make informed decisions. It’s essential that clients’ best interests are at the heart of everything our advisers do so they must avoid or disclose any conflicts of interests. At the core of everything is treating clients fairly.



GM_70694DI_31/01/2020_V5

discovery local endowments · if you die while invested in an endowment plan, we will boost your...

Documents