performax gold advisor guide (mk2092e) · bank-loan collateral . who it’s for . performax gold is...

THE MANUFACTURERS LIFE INSURANCE COMPANY

Advisor’s Guide to

Performax Gold®

Performax Gold is permanent, non-participating whole

life insurance that can give your clients lifetime insurance

protection to meet their evolving needs. But Performax

Gold is about much more than life insurance. With

lower volatility and risk than other permanent

products, Performax Gold’s tax advantaged and growth

opportunities make it a powerful tool to consider as part

of your clients’ long-term financial and estate planning.

This guide gives you a quick look at how Performax Gold works and

how it can be a helpful addition to your clients’ fnancial plan. For more

details, see the administrative Product Guide and sample contract,

available on Repsource.

02 | PERFORMAX GOLD

ADVISOR’S GUIDE | 03

Who it’s for

Performax Gold is designed for individuals or business

owners that have a need for a death benefit and cash value

that grows over time – for instance, to pass funds to the

next generation, to pass on the value accrued in a private

company, or to pay off a tax liability at time of death.

Performax Gold can be appealing for clients who have maximized their non-

registered and registered savings options, and are looking to further diversify their

portfolio by adding life insurance as a tax-advantaged asset. It is well suited for

clients who are looking for low volatility and hands-off management of assets that

will not be needed during their own lifetime.

Performax Gold is typically used for:

Q Retirement and estate planning

Q Wealth accumulation and tax deferrals

Q Corporations looking for the Capital Dividend Account

Q Transfer of wealth and gifting to the next generation

Q Charitable gifting

Q Bank-loan collateral

04 | PERFORMAX GOLD

Feature Manulife’s Performax Gold Competitor’s Par Products

What makes Performax Gold a great ft for your clients?

With its unique key features and long-term stability, Performax Gold is one-of-a-kind.

But what are the main differences between Performax Gold and the competitors’

participating whole life? We’re glad you asked!

Annual credit to policy May earn a Performance Credit based on: ■ Investment Performance Credit ■ Custom Credit – pre-determined based on clients’

age, gender, smoking status, amount of insurance, coverage type and cost duration

May earn a dividend based on: ■ Investment returns, credited through the Dividend

Interest rate ■ Mortality ■ Lapses ■ Taxes ■ Expenses ■ Cost of capital ■ Level of capital ■ Regulatory changes

Investment performance Credited to the policy through the Performance Credit rate; performance is based on the smoothed yield of the Performax Gold Investment Fund

Credited to the policy through the Dividend Interest rate; based on the whole life fund yield, but not necessarily equal to it. The rate, determined by the appointed actuary, may be more or less.

Full client disclosure on how the Performance Credit / dividend is calculated

Yes. The formula is disclosed in our marketing materials No. Complex formula is not usually disclosed

Ability to do tax-free withdrawals of cash value in case of disability

Yes, through the contractual Disability Beneft No

Make additional deposits at any time, without underwriting

Yes, through the Accumulation account. No

Increase annual Deposit Option payments by $100K or up to the MTAR line, without additional underwriting

Yes No

Skip up to fve consecutive Deposit Option payments, and resume at $100K without requiring new underwriting

Yes No

Preferred Underwriting Yes (Healthstyles®) No

Choose from:

Coverage type

SINGLE LIFE Insures one person

JOINT-FIRST-TO-DIE Insures two or more people under the same coverage. We pay the death benefit when the first person dies

JOINT-LAST-TO-DIE Insures two or more people under the same coverage. We pay the death benefit when the last person dies and the insurance costs continue until last death

Age

Cost Duration

0 to 85 25-90 25-90

Costs to age 100 Costs for 15 years



Product overview

Coverage and cost options Performax Gold offers a range of coverage and payment options, so you can help your clients design

a policy that meets their specifc needs. And no matter which cost structure your client chooses,

insurance costs are guaranteed not to change for the duration of the coverage.

Limited policy fee We charge an amount to administer the policy, called the policy fee. Your clients can rest assured

the policy fee outlined in their contract will never change. And, it’s only payable for the frst 15

years, no matter which cost duration they’ve selected.

Payment offset program By submitting a written request, your clients can use the value in their policy to pay their policy

costs. Since Payment Of fset is not guaranteed and the value of the policy could change depending

on policy changes, withdrawals or Performance Credit Rate changes. It’s important to complete an

illustration and review the policy value with your client from time-to-time.


Performance credit

What is smoothing?

Smoothing means that

investment returns are spread

over a longer period instead of

being recognized immediately.

This can lessen volatility and

helps deliver more stable

returns for both fixed and

non-fixed income assets.

The performance credit is an amount the policy earns

each anniversary that helps increase the policy’s

cash value, and can be used to purchase additional

insurance coverage. The amount of the Performance

Credit varies by the performance of the Performax

Gold Investment Fund (PGIF). We guarantee that the

Performance Credit will never be less than zero.

The Fund performance is refected in the annual Performance Credit

calculation through the Performance Credit rate. The Performance

Credit rate is based on the smoothed yield of the PGIF as at December

31st. It is declared on March 31 every year, and remains in effect for the

following 12 months.

About the Performax Gold Investment Fund The Performax Gold Investment Fund (PGIF) is a diversifed portfolio of assets

managed by Manulife’s investment professionals. Backed by Manulife’s

investment strength, high-quality portfolio and prudent risk management

practices, the smoothed returns of the fund can help reduce the volatility of

your clients’ policy values. The PGIF target asset mix includes equities, real

estate, commercial mortgages and bonds. We carefully select assets to help

meet the long-term needs of policy owners.

06 | PERFORMAX GOLD

Your clients choose how they want to use the performance credits earned by their policy by

selecting one of the following three options:

1 PAID-UP INSURANCE

If clients choose Paid-up Insurance, their Performance Credit is used to purchase more insurance called

Paid-up Insurance. This Paid-up Insurance portion of their policy also earns a Performance Credit

each year. This is the most effcient way Performax Gold can help your clients accumulate value in

their policy.

2 TERM OPTION

Through a mix of Yearly Term Insurance, and Paid-up Insurance, clients can use this option to get more

insurance coverage for a lower cost since the Term Option coverage is funded by the Performance

Credit. Based on the amount of coverage selected, the Term Option can be eligible for either a

10-year guarantee or a lifetime guarantee; however, any substandard ratings on the coverage need to

be within limits outlined in the administrative Product Guide.

3 ACCUMULATION ACCOUNT

When clients choose to have their Performance Credit applied to this account, no additional insurance

is purchased. The amount of Performance Credit is simply deposited in cash into the Accumulation

Account. As a result, the insurance coverage does not increase over time, but the policy’s cash value

is increased by the amount of Performance Credit earned every year. The Accumulation Account is

part of the policy and benefts from the same advantageous tax treatment. Interest is earned and

compounded daily, and we guarantee that the interest rate will never be less than 0%.

The balance of the Accumulation Account is payable tax-free, as part of the death benefit.

Subject to our administrative rules, clients may be able to change their Performance Credit

option after the policy is issued.


Additional payment options

Your clients can choose to build more value within their policy by making additional

payments. These additional payments can purchase more insurance coverage,

called Deposit Option Insurance, or they can be deposited in cash into the

Accumulation Account.

We will deduct a percentage from all additional payments called a Load on Additional Payments; the contract guarantees that

this percentage won’t increase. Additional Payments must comply with our administrative rules and cannot cause the policy to

lose its exempt status.

Deposit option insurance The Performax Gold Deposit Option (DO)

feature allows clients to build up policy values

faster by purchasing extra insurance with their

additional payments. If the Deposit Option

coverage is requested with the initial insurance

application, it does not create increased medical

underwriting requirements. A Deposit Option

coverage can also be added to the policy after

issue, subject to our administrative rules and

underwriting requirements.

Deposit Option payments can be made at

any time throughout the year. Deposit option

insurance is purchased immediately, and cash

values are increased by the payment amount

minus the load.

The Deposit Option is subject to annual and

lifetime limits. The annual limit considers the

available tax room, and allows your clients

to make their additional payments in a very

fexible manner, such as increasing payments

by up to $100,000 year over year without

any underwriting required. The Lifetime limit

is determined based on the total amount of

deposit option payments your client is planning

to make throughout their life, and is printed in

their contract.

Accumulation account The Accumulation Account is an investment

account within the policy that earns daily

compound interest (see the previous section

– Performance Credit– for more details).

Every Performax Gold policy comes with an

Accumulation Account, so there is no need to

apply for it, and it can be used in conjunction

with Deposit Option. When clients place

their additional payments into this account,

no insurance is purchased and therefore, no

underwriting is required. Payments into the

Accumulation Account can be made at any

time, subject to available tax room.

08 | PERFORMAX GOLD

Performax Gold’s Deposit Option offers outstanding flexibility:

Clients can skip up to five consecutive years of DO payments, and/or vary

their annual payment amount without any negative consequences.

When to use the accumulation account vs deposit option

Deposit Option usually delivers the most value for your clients’ additional payments. However, in situations

where Deposit Option is not possible (for instance, if your client is heavily rated or if they are converting from

a term policy and don’t want to go through underwriting) the Accumulation Account is a great alternative.

Feature Deposit Option Accumulation Account

Needs to be applied for Y Can be added at issue or after

N Automatically included with every policy

Requires underwriting Y N

Payments accepted at anytime Y As long as a DO coverage is set up on the policy

Y

Payments purchase insurance Y N

Payments increase cash value Y Y

Earns performance credits Y N

Earns a daily compounded interest N Y

Tax-free growth Y Y

Ability to use all the available tax room in any given year

Possibly, subject to annual limit rules Y

Subject to a lifetime limit Y N

Cash value payable tax-free as part of the death beneft

N Only the insurance coverage is payable at death

Y

Withdrawals Y But DO insurance has to be surrendered

Y


1

2

3

Used to pay policy costs $8,711.76

Used to reduce your loan balance $10,000.00

Used to purchase deposit option insurance $12,777.71

Placed in your side account $518.86

010 | PERFORMAX GOLD

If your client cancels their Performax Gold policy, the

amount of money they will receive from us on that specifc

day is the Total cash value minus any outstanding amount

(including any outstanding policy loan).

Keeping in touch with your policy values

Performax Gold’s

annual statement

allows your clients

to see how their

policy values

change every year.

Here’s a peek at

the key sections

of your clients’

statement:

1 Total amount of insurance

■ the insurance coverage amount, plus

■ the paid-up insurance coverage amount and/or Term

Option insurance amount, plus

■ the Deposit Option insurance coverage amount, plus

■ any Term insurance rider(s)

The total amount of insurance may be different from the

amount payable at death if any adjustments are required, like

deducting the loan balance for instance. The total amount

payable at death is shown on page 2 of the statement.

2 Total cash value

■ the Guaranteed Cash Value, plus

■ the cash value of the Paid-up Insurance coverage in effect

on the policy, plus

■ the cash values for the Deposit Option Insurance coverage

in effect on the policy, plus

■ the balance of the Accumulation Account

3 Payments we received from you

This section outlines the payments we received from

your client during the previous 12 months and how they

were allocated.

4

5

7

6

4

Additional payments

Policy anniversary summary

On page 2 of the Performax Gold annual statement, your

clients can see how many performance credits were earned

on their policy anniversary, and how they were applied

to their policy.

5 Total amount payable at death

This is the amount that would be paid from the Performax

Gold coverage if there was a claim. It takes into account

any adjustment applied to the amount of insurance, like

deducting the policy loan amount or adding the cash value

of the deposit option for Term Option policies.

6 Rider coverage details

This section shows the amount of coverage provided by

the riders.

7

The annual payment limit for deposit option insurance shows

the maximum amount that your client can pay without

underwriting required.


Performax Gold riders

Clients can customize their Performax Gold policies to meet their needs by adding

any of the following riders at the time of purchase, or any time after.

Term insurance rider (TIR) This rider provides additional temporary insurance coverage. The person insured under the

Term Insurance Rider does not need to have permanent coverage on the policy. While this

coverage is temporary, it can be converted up to age 75 (without evidence of insurability) to

any other permanent plan then offered by us. Term riders are available either on a 10-year

renewable or 20-year renewable basis and on a single or combined life basis.

Total disability Waiver (TDW) rider If a person insured under this rider becomes totally disabled for a period of at least six

months, we will waive the policy costs for this policy for the period of disability. If total

disability occurs before age 60 and continues for at least six months, all policy costs will be

waived for as long as the disability continues. If total disability occurs after age 60, policy

costs are waived until age 65. This rider is available to any life insured under the policy or to

the payor of the policy.

Guaranteed insurability option (GIO) rider This rider gives clients the option to purchase additional insurance coverage on the life

insured without evidence of insurability. Clients can exercise this option at specifed “option

dates” as outlined in the policy contract. They can also exercise this option on specifc life

events including marriage and birth or adoption of a child.

Child protection (CPR) rider Our Child Protection Rider provides $10,000 of insurance coverage for the child of any

insured person covered by the policy. And once the child turns 25, they have the ability to

purchase up to $250,000 of new insurance coverage, including up to $100,000 of critical

illness insurance. No evidence of insurability is required for the life insurance coverage. To

qualify for the critical illness insurance coverage, we require the insured person to answer

one question to confrm he or she does not already qualify for, or have started the waiting

period for, any beneft under the new critical illness insurance policy.



Other built-in policy features

Performax Gold policies contain valuable features to protect clients during

difficult times – including a built-in Disability Benefit and the ability to take

policy loans.

Defning disability

For total disability, one of the following

must be satisfed:

■ Inability, due to injury or sickness, to perform

the substantial duties of their regular

occupation.

■ If not employed, inability due to injury or

sickness, to perform the regular substantial

activities they were engaged in prior to the

onset of injury or sickness.

For catastrophic disability, one of the

following mustbe satisfed:

■ Assumed disability – loss of sight, hearing,

speech, two hands, two feet, or a hand

and a foot

■ Loss of independence – unable to do

one Activity of Daily Living

■ Cognitive loss – requires substantial

supervision because of

a severe loss of cognitive functioning

■ Terminal illness – life expectancy of less

than one year

Disability beneft We hope your clients never require it, but if they ever

fnd themselves disabled and in need of fnancial

assistance, they can withdraw their policy’s cash

value tax-free, under the Disability Beneft provision.

To qualify, your client must provide evidence of total

or catastrophic disability within a year of onset of

the disability. Based on current tax legislation, a

payment under a policy as a Disability Beneft is not a

disposition of the policy (January 2017).

Policy loans After the frst policy year, Performax Gold clients can

use the values in their policy to request a cash loan

(as long as the policy is not in the grace period) up

to 90% of the Total Policy Value minus any other

outstanding policy loans. The policy is the only

security for the loan and we may ask the client to

complete a loan agreement. If the loan is outstanding

when the insured dies, we will reduce the death

beneft by the amount of the loan allocated to that

insured’s coverages.

We will also offer a policy continuation loan. If your

clients stop making payments (but are not on the

Payment Offset Program), we will make the policy

payments using a loan against the policy’s values. We

charge interest on this loan and the loan will reduce

any death beneft payable.

Applying for Performax Gold

We’ve made the application process easier and more efficient so your

client can get the coverage they want with less hassle, and with lower

costs for your healthiest clients.

Illustrating Performax Gold With Healthstyles A client’s Healthstyle can only be confrmed when the underwriting process is complete. Therefore,

we recommend that you use one of the following categories when you illustrate Performax Gold:

■ Healthstyle 3 for non-smokers

■ Healthstyle 4 for users of tobacco or nicotine products, other than cigarettes or e-cigarettes

■ Healthstyle 5 for cigarette smokers or e-cigarette smokers

If your client is given a preferred Healthstyle rating (Healthstyle 1 or 2 ), you can give them the good

news when you deliver the policy. You can fnd more information about Healthstyles underwriting

on Repsource.

*

THE HEALTHSTYLES® ADVANTAGE

Performax Gold offers Healthstyles underwriting that rewards clients for their good health

and lifestyle with lower insurance costs. Healthstyles is a more refned underwriting process

that recognizes that an individual’s health and lifestyle are unique.

ACCELERATED UNDERWRITING

With accelerated underwriting, applying for Performax Gold is easier than ever before. Now

many of your clients can apply for up to and including $1 million of coverage without having

to meet with a nurse to provide blood, urine and other biometric data . This means an

easier, less intrusive experience, faster decisions and a higher coverage amount that is four

times the previous limit of $250,000.

**

* Healthstyle 2 is not available for clients aged 18-45 under $1,000,001.** As of November 2018, all clients aged 18 up to and including age 50. Exceptions apply. Applicants with certain health concerns or personal medical histories will still require biometric testing.


Why Manulife

Broad product shelf Manulife has a broad product shelf that can

help you bring some of the industry’s best

investment and insurance solutions to your

clients to prepare them for the future and help

them reach their fnancial goals.

Marketing support Our marketing materials are designed to

quickly educate your clients about our

product solutions and provide straightforward

answers to commonly asked questions.

These materials are available on Repsource at

manulife.ca/repsource.

Business development Our experienced regional wholesalers and

inside sales representatives can provide you

with a full range of product and industry

information, as well as support to help you

develop your business.

Tax, retirement and estate

planning services With extensive experience in retirement planning

and wealth accumulation strategies, our team

of accountants, lawyers, and other specialists

is skilled in proactively identifying opportunities

for clients, based on changing regulatory

environments and market conditions.

Financial strength and stability

Strong. At Manulife, we operate from a

position of strength. Our strength is refected

in our strong capital, our fnancial ratings

awarded us from independent rating agencies,

and our strong asset performance.

Reliable. Manulife is proud to lead businesses

that provide individual life and health insurance,

wealth management, banking, group benefts,

group savings plans, plus services to alumni and

professional associations across the country.

Trustworthy. For over 125 years, Manulife

has stood solidly behind our promises to help

secure the fnancial future for our clients.

Forward-thinking. Manulife is a market leader

in both fnancial protection and the wealth

management business operating in Asia,

Canada and the United States. We provide a

full suite of products and services to meet the

current and future needs of individual and

group customers.


For the most recent corporate information,

please visit manulife.com

Performax Gold and Healthstyles are registered trademarks of Manulife (The Manufacturers Life Insurance Company). Manulife, Manulife Insurance, the Block Design, the Four Cube Design and Strong, Reliable Trustworthy Forward-thinking are trademarks of the Manufacturers Life Insurance Company and are used by it and its affliates under license.

MK2092E 11/18

https://manulife.com

performax gold advisor guide (mk2092e) · bank-loan collateral . who it’s for . performax gold is...

Documents