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Revocable and Irrevocable Beneficiaries
 

The Money Management Newsletter: Insurance Products
Gradual Inheritance Transfers

Some parents want to transfer inheritances to their children gradually, as opposed to one lump sum, after death. An Annuity Settlement Option can now be added to a Manulife Investments Guaranteed Interest Contract (GIC), Guaranteed Investment Fund (GIF & GIF encore), or a Manulife Financial Life Insurance policy. The Annuity Settlement Option allows you to add this to an existing or new Manulife contract. Upon death, the proceeds of their contract will be automatically paid out as a Term Certain or Life Annuity that will then make periodic payments to beneficiaries for a specific time period, or over their full lifetime. No fees are charged for adding this option.

Some ins and outs…

This is only an option to an existing investment product, not a product in-and-unto-itself. So, the first thing you need to decide, is whether the primary investment is suitable for your circumstances. Then determine, if combined with your estate planning considerations, is the purchase and the option, going to do the job for you.

Features and benefits

  • Allows you to control the manner in which assets within your estate are allocated to beneficiaries
  • Ensures that younger beneficiaries, such as children or grandchildren, receive a controlled income stream (Monthly, Quarterly, Semi-annuall, Annually), rather than a large lump sum amount
  • Provides parents with disabled children a comprehensive estate-planning tool
  • Provides an increased level of privacy while avoiding costly probate and estate administration fees.

Case study

Richard and Joan own a $400,000 Manulife Investment GIC, which they want to leave to their 20-year-old-son, Scott, in the event of their deaths. But Richard and Joan are concerned about Scott's ability to manage this money and would prefer to have their $400,000 investment paid out to Scott over a period of time. After discussing the situation with their advisors, they select a 10-Year Term Certain Annuity Settlement Option on their Investment GIC. Now , Richard and Joan have added a comfort in knowing that a portion of their estates will pass to their son gradually over a 10-Year period after their deaths

Income payments continue for 10 years and then end*
Payments
$4,000
$4,000
$4,000
--------
$4,000
Month 1
Month 2
Month 3
Month 120
Payments End
* Annuity incomes quoted on June 20,2003. Figures are shown for illustration purposes only.

Important Notice: Guarantee and or Settlement options will depend upon which annuity you choose. Please speck with your investment/insurance advisor when selecting investments that may affect the nature of your estate plan and any beneficiaries income needs.

* * *

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