2-IN-ONE SAVINGS 4 EDUCATION
Retail Mass Market Broker Distribution
February 2014
Saving for tomorrow shouldn't stop you living today
KEY PRODUCT FEATURES
2-IN-ONE SAVINGS
HOW THE 2-IN-ONE SAVINGS PRODUCT WORKS• It is a savings product you can use to save for your child’s education
• The product is split into a Short Term Pocket and a Long Term Pocket.
• The Short Term Pocket enables you to access your saved money when you need it and the Long Term Pocket enables you to achieve your savings objective. Your savings in the Long Term Pocket are invested in the Old Mutual Smoothed Bonus Fund, and your savings in the Short Term Pocket are invested in the Old Mutual Money Market Fund.
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LONG TERM POCKETMinimum term: 10 yearsFund: Old Mutual Smoothed Bonus FundGrowth: Annual bonuses
SHORT TERM POCKETMinimum term: 12 contributionsFund: Old Mutual Money Market FundGrowth: Monthly interest
2-IN-ONE SAVINGS
HOW THE 2-IN-ONE SAVINGS PRODUCT WORKSFor whom is this product suitable?• This product is designed for customers who are able to commit to savings of at least R150
per month for 10 years or longer, but also require access to some money during this time.
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What are the benefits of this product?LONG TERM POCKET
• The main benefit is the accumulated value of your savings, which will be available in full at the end of the term of your product, on your death, or on disability.
SHORT TERM POCKET
• The main benefit is the accumulated value of your savings, which will be available any time you need it. However, as your savings are invested in a Money Market Unit Trust, which is not like a bank account, it may take up to 10 days to clear and show in your bank account.
2-IN-ONE SAVINGS
HOW THE 2-IN-ONE SAVINGS PRODUCT WORKSMonthly contributions are split between the two pockets• Customers have a choice of the total monthly contribution, but how it is split into the two
pockets is determined automatically. Below are examples of how Old Mutual splits each monthly contribution:
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Monthly Contribution Long Term Pocket Short Term PocketR150.00R200.00R250.00R300.00R350.00
R130.00R130.00R162.50R195.00R227.50
R20.00R70.00R87.50R105.00R122.50
2-IN-ONE SAVINGS
HOW CHARGES ARE DEDUCTED
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Long Term Pocket Short Term PocketRegular premium fee
Investment & administration feeGuarantee feeFund management feeTermination fee
15% of long termpremium portion + R10.00*1.25% per year0.25% per year0.25% per yearR300* + Reducingfee**
No fee
No feeNo fee0.57% per yearNo fee
Termination fee from paid-up R155 No fee* Fees for 2014. Fees are reviewable annually ** Reducing fee depends on how long the product has been active
What are these charges for?
Deducted from long term premiums
• Regular premium fee: for advice, issuing the product, and ongoing servicing. This is deducted from your long term premiums paid each month.
2-IN-ONE SAVINGS
HOW CHARGES ARE DEDUCTED
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Deducted from long term investment growth
• Investment & administration fee: for administration and maintenance of the product. • Guarantee fee: for providing the guaranteed part of your payout in the Long Term
Pocket• Fund management fees: for managing the Smoothed Bonus Fund‘s investments.Deducted from Long Term Pocket
• Termination fee (Part Withdrawal, Surrender and Paid-up): Administration fee plus a reducing fee. The reducing fee is only charged if you take money out of your Long Term Pocket (under certain legislated conditions), or you completely stop paying contributions within the first half of your product's term.
SHORT TERM POCKET
• Fund management fees: for managing the Money Market Fund's investments. This is deducted from the monthly interest.
• Withdrawal fee: The first two withdrawals from your Short Term Pocket are free of charge each calendar year. Thereafter a R50 fee is charged per withdrawal.
2-IN-ONE SAVINGS
WHAT ARE THE TAX IMPLICATIONS?
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LONG TERM POCKET
• Benefits paid out to you from the Long Term Pocket are not taxed. Old Mutual pays the various taxes on investment growth during the term of your product.
SHORT TERM POCKET
• You will owe income tax on the total interest you earn from all your investments, including the interest added into your Short Term Pocket, if it is above a certain level specified by SARS.
2-IN-ONE SAVINGS
PRODUCT FEATURES AND BENEFITS
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Minimum Premium:R150.00 split to: Long Term Pocket: R130
Short Term Pocket: R20With Premium Waiver Benefit:R175.00 split to: Long Term Pocket: R130 + 10% Savings Protection = R143
Short Term Pocket: R20
What is a Premium Waiver Option?If you die or become disabled in the first 10 years of taking out your product, Old Mutual will pay an
amount into your Long Term Pocket. This amount will be equal to the current value of the remaining long term premiums (after regular premium fees) up to the first 10 years of your product. If you die or become disabled due to natural causes in the first 6 months, this amount is not payable.
This option needs to be chosen at the time of application and increases your monthly contribution to the Long Term Pocket by 10%.
A premium waiver charge of 10% will be added to your contribution for the Long Term Pocket if you select the Premium Waiver Option. The 10% increase will be used as a waiver charge for the first 10 years and will not be invested in the Smoothed Bonus Fund. After 10 years, the full Long Term Premium will be invested in the Smoothed Bonus Fund (10% included).
2-IN-ONE SAVINGS
PRODUCT FEATURES AND BENEFITS
Minimum Term:
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Long Term Pocket: 10 yearsShort Term Pocket: 12 contributions
Investment Fund: Long Term Pocket: Smooth Bonus FundShort Term Pocket: Money Market Fund
Growth: Long Term Pocket: Bonuses declared annuallyShort Term Pocket: Interest added at end of each month
Benefit available: Long Term Pocket: Available in full at the end of the term, on death, or on disability
Short Term Pocket: Benefit is the value of your savings, which will be available any time you need it
Premium Holiday Benefit:
The Premium Holiday allows for up to six premiums to be skipped, during the term of the policy. This benefit is available again to the client, on payment of the skipped premiums
2-IN-ONE SAVINGS
PRODUCT FEATURES AND BENEFITS
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Savings Boosters:
Part Withdrawals: Long Term Pocket: One part-withdrawal up to 100% will be available within the first 5 years of the policy term, and then at 5-yearly intervals thereafter. The period between any part-withdrawals must also be at least 5 years
Short Term Pocket: Any withdrawal amount, up to the sum of all Short Term contributions received
ContributionIncreases:
Contributions increase in July each year, as long as it has been active for at least 6 months. The increase is determined by Old Mutual and will be related to the level of inflation. Customers can choose to decline the increaseThese are amounts added by Old Mutual to your Long Term Pocket to motivate you to be disciplined towards your long term savings, and to keep paying your premiums until maturity.
After Savings Booster added is an amount equal to:24 premiums60 premiums110 premiums
2 Long Term premiums3 Long Term premiums8 Long Term premiums
2-IN-ONE SAVINGS
Access to the following Family Support Services* from independent service providers:
24 HOUR FAMILY SUPPORT SERVICES
Health support*: Telephone access to health advisers for assistance with health queries
Trauma, assault and HIV treatment*: Assistance and treatment following assault (e.g. rape, hijacking, child abuse), accidental exposure to HIV or other kinds of trauma
Emergency medical response*: Advice, emergency treatment and transportation to an appropriate medical facility
Legal support*: Free telephone advice and assistance on legal matters, help with legal documents
Important note:*Family Support Services - Certain terms and conditions apply to the facilitation of this access. For a copy of these, call 0860 00 1919.Old Mutual facilitates access to independent Family Support Service providers. Such access is not offered as a benefit under your insurance policy and may be varied or cancelled at any time. The service providers provide services directly to you on terms agreed between you and the service providers. Old Mutual does not accept any liability arising from the services rendered by the service providers.
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