Archives

November 01, 2011

Sun Life Financial Launches Sun Life Solutions(SM) Variable Annuity, Sun Income Vision(SM) Living Benefit

Allows advisors to build customized, cost effective retirement income solutions

WELLESLEY, Mass. (November 1, 2011) — The Retirement Income Solutions Division of the U.S. business group of Sun Life Financial Inc. (NYSE: SLF, TSX: SLF) today announced the launch of the Sun Life SolutionsSM variable annuity and the Sun Income VisionSM living benefit. Sun Life Solutions offers a spectrum of investment options and cost effective choices to achieve guaranteed lifetime income. The optional Sun Income Vision living benefit (available for an additional annual fee) allows investors to lock in a benefit base used to calculate income. This benefit base can annually increase with market gains, but won’t decrease due to market declines. Choices of investments, withdrawal charge periods, and death benefits meet a range of income, liquidity, and estate planning needs.

Sun Life Financial continues to design compelling solutions that balance shareholder and customer value. The announcement represents the latest step in the firm’s bid to become a leading provider of retirement vehicles for both income and long-term care planning. The firm already provides financial advisors variable annuities, which guarantee lifetime income, and life insurance with a linked benefit, which may be used to cover long-term care costs or to provide a death benefit to beneficiaries.

“With the phase-out of defined benefit plans and the growing volatility of the stock market, a variable annuity with a living benefit can help investors who max out on their qualified retirement plans to not only secure guaranteed retirement income, but also lock in potential market gains,” said Steve Deschenes, Senior Vice President and General Manager of the firm’s Retirement Income Solutions division. “And we think people should act earlier and smarter to plan for guaranteed lifetime income,” added Deschenes. “Sun Life’s 2011 Unretirement Index found that working Americans who own annuities express over 25% more confidence about their future retirement than non-owners.”[1]

“The Sun Income Vision living benefit rider provides advisors considerable flexibility to customize the asset mix of this tax-deferred retirement income vehicle according to each investor’s risk/reward profile -- for up to 70% equity participation,” said Mike Shunney, President of Sun Life Financial Distributors, Inc., Sun Life Financial’s affiliated broker dealer and distributor of its variable products. “And since our advisor survey[2] identifies cost as the top concern of investors who would benefit from variable annuities, we think every advisor needs to help clients age 45 and older explore the retirement income roadmap, with options to suit each wallet and temperament.”

Highlights

Sun Life Solutions variable annuity:

  • Tax-deferred growth on any investment earnings.
  • Over 20 money managers to choose from.
  • Annual mortality and expense charges as low as 1.00% (depending on the withdrawal charge option elected).
  • Range of death benefit options at various price points (ranging from a default option at no additional charge, to an enhanced benefit for an annual fee of 0.60% of daily net assets in the subaccounts).

Sun Income Vision living benefit:

  • Guaranteed lifetime income with living benefit.
  • Up to 70% equity participation.
  • Possible annual step-ups in guaranteed lifetime income if underlying account value rises.
  • Annual benefit cost of 0.35% single, 0.5% joint life (as a percentage of the income benefit base).

The Sun Life Solutions variable annuity contains exclusions, limitations, reductions of benefits and terms for keeping it in force. Your licensed financial professional can provide you with complete details. The product or specific features may not be available in all states.

Annuities are long-term financial vehicles designed for retirement purposes. All withdrawals of taxable amounts are taxable as ordinary income and, if taken prior to age 59½, may be subject to a 10% federal penalty. Any withdrawals will reduce the death benefits and the cash surrender value.

Variable annuity accumulation units fluctuate according to underlying economic and market conditions. It is possible that investors could lose up to the principal amount invested at redemption. All guarantees are based on the claims-paying ability of the issuing company. Guarantees do not apply to the performance or safety of amounts held in the variable investment options.

Investors should consider the investment objectives, risks, charges, and expenses of a variable annuity. The prospectus contains this and other important information. Prospectuses for both the variable annuity product and the underlying investment options are available from your financial professional or at www.sunlife.com/us. Investors should read all prospectuses carefully before investing or sending money.

The Sun Life Solutions variable annuity is issued by Sun Life Assurance Company of Canada (U.S.) (Wellesley Hills, MA) in all states except New York. In New York, the contracts are issued by Sun Life Insurance and Annuity Company of New York (New York, NY). Variable products are distributed through Sun Life Financial Distributors, Inc. All three companies are members of the Sun Life Financial group of companies.

About Variable Annuities

What 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 have on-going expenses (such as mortality and administration expenses, contract fees, and fees for optional benefits). They also have terms and conditions for keeping them in force. Owners who withdraw monies from the contract 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”).

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.

Living Benefits

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% based on age at time of first withdrawal). 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.

Death benefit

When a variable annuity owner passes away, the amount (if any) payable to the owner’s beneficiary or estate depends on the circumstances at the time of death:

  • When a variable annuity owner passes away during the accumulation phase (i.e. when the owner had not annuitized the contract), then the beneficiary or estate would receive either the remaining contract value (if any), or the death benefit reflecting the features that the owner had elected.
  • Elective death benefits vary by price point and design, and may include such options as providing beneficiaries the return of purchase payments, or the highest anniversary value, both adjusted for withdrawals.

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. In the United States and elsewhere, insurance products are offered by members of the Sun Life Financial group that are insurance companies. Sun Life Financial Inc., the holding company for the Sun Life Financial group of companies, is a public company. It is not an insurance company and does not offer insurance products for sale in the United States or elsewhere, and does not guarantee the obligations of its insurance company subsidiaries. Product offerings may not be available in all states and may vary depending on state laws and regulations.

As of June 30, 2011, the Sun Life Financial group of companies had total assets under management of US$492 billion. For more information, please visit www.sunlife.com/us. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE), and Philippine (PSE) stock exchanges under the ticker symbol SLF.

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.

 

Media Contact
Tim Stone: Senior Manager, Media and Communications
T: 781-416-2185
C: 781-366-5376
tim.stone@sunlife.com

SLPC 23861, appvd: 10/11, exp: 10/13

 

[1] The Sun Life Financial Unretirement Index, which annually surveys American workers to gauge retirement confidence, polled nearly 1,500 people in September 2011, the survey’s fourth year.

 

[2] The Sun Life Financial Retirement Income Pulse Poll surveyed nearly 500 financial advisors in February 2011.