Sun Life Financial Launches Video and Printed Resources in Plain English
WELLESLEY, MA (July 25, 2011) – The Annuities Division of the U.S. business group of Sun Life Financial Inc. (NYSE: SLF, TSX: SLF) has launched new resources about the features and performance of variable annuities. As a growing number of Americans near retirement, the resources advance the firm’s Get to Know Sun Life brand campaign, which uses straightforward communications to help clients and advisors better understand the uses of variable annuities in retirement planning. The launch of Sun Life variable annuities resources in plain language follow a Sun Life Retirement Income Pulse Poll of Financial Advisors concluding that more clients who could benefit from variable annuities would invest in them if they knew more about them. The new materials include:
- A video introducing financial advisors and investors to both variable annuities as an asset category, and to Sun Life variable annuities living benefits solutions.
- An educational kit enabling advisors to show clients in detail how Sun Life variable annuities fit into a retirement income plan.
- A redesigned quarterly customer statement with easy-to-read summaries and graphics.
Video: Look on the Bright Side shows financial advisors and investors how to incorporate Sun Life variable annuities into a retirement income planning strategy. Accompanied by a guide to help advisors identify clients who might benefit from variable annuities, the video is divided into six sections: Annuity Benefits, Accumulations Stage, Lifetime Income, Investment Choices, Why Sun Life and Learn More. The Learn More tab displays Sun Life product and fund prospectuses, product fact sheets, client case studies, and related brochures. To download the video to an iphone or ipad, users can text SUNLIFE to 313131 on their smart phone, or type sunlifevideo.com into their iPad.
Educational Kit: Picture Your Retirement Possibilities explores in greater detail three key challenges for retirement income planning: making savings last, investing in uncertain markets, and keeping up with rising costs. Accompanied by simple examples and illustrations void of industry jargon, the written kit outlines prudent steps to address these challenges, using concrete examples from Sun Life Financial’s suite of variable annuities and living benefits.
Statement: To make its Variable Annuity Customer Statement an educational resource, Sun Life enlisted customers, wholesalers, and advisors to help devise a concise, visually engaging report that shows clients the benefits and performance of their investment in plain language. Reaching nearly 225,000 of the firm’s clients each quarter, the new statement has received a DALBAR Communications Seal in the customer statement category, a mark of excellence awarded to financial services communications that excel in meeting the needs of consumers.
“Our goal was simple,” says David Healy, Senior Vice President of Sun Life U.S. Operations. “We wanted to make our variable annuity customer statement straight-forward, informative, and easy to read. We regularly evaluate our customer communications to find new ways to make them better -- so that every Sun Life customer receives consistently exceptional service.”
About Variable AnnuitiesWhat is a Variable Annuity?
A variable annuity is a long-term investment designed for retirement purposes. It includes several key benefits:
- Tax-deferred growth of any investment gains.
- Guaranteed lifetime income.
- Beneficiary protection with a death benefit.
- Professionally managed investment options that rise and fall in value based on market performance.
Variable annuities do have on-going expenses (such as mortality and administration expenses, contract fees, and fees for optional benefits), and they also have terms and conditions for keeping them in force. If the owner withdraws monies from the contract, he or she may be subject to ordinary income taxes, and a federal income tax penalty if the withdrawal is made before age 59 ½.
When the variable annuity owner is ready to receive income, he or she may “annuitize” the contract, i.e., convert the values of the contract into a stream of periodic payments in exchange for relinquishing access to the underlying cash value (the “account value”).
The "account value" of a variable annuity reflects the owner’s investment in the contract, adjusted for investment gains or losses, as well as for withdrawals. Investments to the annuity are credited to the account value and allocated to investment options selected by the owner. These investment options rise and fall in value with market performance. Any charges for the annuity, as well as the fees for any optional living or death benefits (see below) are deducted periodically from the account value.
Many variable annuities now offer an optional feature called a “living benefit,” which for an additional charge, provides the variable annuity owner guaranteed lifetime income, without annuitizing, i.e., without relinquishing access to the account value.
Instead, the living benefit establishes a “benefit base,” i.e., a value, a percentage of which becomes the annuity owner’s guaranteed annual payments. The annual income under the living benefit is determined by multiplying the benefit base by a withdrawal percentage (usually ranging from 3% to 6%). Generally, the benefit base is initially set to equal the owner’s purchase payments made in the first year of the contract and is guaranteed by the insurer to remain level or even increase, depending on the product design. (However, the benefit base is not a cash value, cannot be taken in a lump sum, and is not a guarantee of the investment return for an annuity investment option.)
Under the terms of a typical benefit, beginning at a specified age, the owner can elect at any time to begin taking annual withdrawals. As long as the owner meets the terms of the benefit, the insurance company guarantees that those payments will continue for life, even if the account value of the contract falls to zero. Although an owner who elects a living benefit maintains control of the account value, the owner’s choice of investments may be restricted to certain designated options. Further, the benefit base also can decrease if early or large withdrawals are taken.
When a variable annuity owner dies, the amount (if any) payable to the owner’s beneficiary or estate depends on the circumstances at the time of death:
- If the owner had not annuitized the contract, then the beneficiary or estate would receive the remaining amounts (if any) that might be due under the annuity features that the owner elected.
- If the owner had not annuitized, then most variable annuities would pay a “standard” death benefit equal to the account value or purchase payments adjusted for withdrawals, whichever is greater. (Generally, the death benefit is payable even if the owner had elected a living benefit).
- Finally, many variable annuities offer optional death benefits (for an additional annual charge) that enhance the standard benefit in various ways, depending on the terms of the particular annuity features selected by the owner.
About Sun Life Financial
Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of March 31, 2011, the Sun Life Financial group of companies had total assets under management of U.S. $484 billion.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF. For more information, see the Annuities section of www.sunlife.com/us
Sun Life Financial
Investors should carefully consider the investment objectives, risks, charges, and expenses of an investment in a variable annuity. The prospectus contains this and other important information. Prospectuses for both the variable annuity product and the underlying investment options may be obtained from your financial professional or by visiting www.sunlife.com/us. Please read all prospectuses carefully before investing or sending money.
Sun Life Financial annuities are issued by Sun Life Assurance Company of Canada (U.S.) (Wellesley Hills, MA) in all states except New York. In New York, the annuities are issued by Sun Life Insurance and Annuity Company of New York (New York, NY). Variable annuities are distributed through Sun Life Financial Distributors, Inc. All three companies are members of the Sun Life Financial group of companies.
SLPC 23273, appvd: 6/11, exp: 6/13