MetLife Bond offers capital, withdrawal and death benefit guarantees

MetLife Europe Limited (MetLife) is launching one of the first investment bonds to offer capital, withdrawal and death benefit guarantees as it further emphasises its commitment to innovative long-term saving solutions.

MetLife believes 2009 will be the year of the guarantee with the investment bond market set for strong sales in 2009. The availability of guarantees is crucial in reinventing the market to provide assurance for investors and advisers in the face of current stock market volatility.

Its Guaranteed Investment Bond is its first new product launch in the bonds market since Capital Gains Tax changes in last year’s Budget which some analysts claimed tipped the balance in favour of collective schemes such as unit trusts and OEICs.

The MetLife Guaranteed Investment Bond is a single premium unit-linked insurance bond providing a choice of capital, withdrawal and death benefit guarantees with a minimum investment of £10,000 and terms ranging from 7 to 20 years.

Investors in the Guaranteed Investment Bond have the potential to lock-in gains every two-and-a-half years and are guaranteed to receive back at least their initial investment minus any withdrawals.

They can withdraw up to five per cent of their initial investment each year free of charge and investors in the Secure Capital Feature can switch investments into non-guaranteed funds if they so wish.

Dominic Grinstead, Strategic Development and Marketing Director of MetLife’s UK Retirement & Savings business, says: “We believe that 2009 will be the year of the guarantee. Demand for guarantees and credible guaranteed products is growing strongly and is a crucial part of the UK long-term saving and retirement planning market.”

“Investment bonds have a strong part to play in delivering the investment solutions that clients and IFAs are looking for and we have designed our Guaranteed Investment Bond to help in that process of reinventing the bonds market. Guarantees really are the key differentiator.”

Clients opting for MetLife’s Guaranteed Investment Bond will invest all their money initially in funds offering the Secure Capital Feature which include a range of Managed and Index Portfolios managed with the assistance of leading independent investment research company Morningstar Associates Europe Limited. Clients who do not choose the Secure Capital Feature will invest in the standard MetLife Investment Bond which offers additional funds including best of breed funds and index funds.

At the same time, MetLife have addressed the inheritance tax (IHT) market with a guaranteed loan trust (GLT). Unlike conventional IHT plans the GLT guarantees that investors will receive the return of their initial loan over a 20 year period and with investment lock-ins, their beneficiaries may receive a guaranteed lump sum as well.

The policy can have a maximum of 10 lives assured. There is no minimum age for lives assured.

Standard adviser commission is 4% and trail commission can be added and is payable from the first month. Initial commission can also be sacrificed so trail commission is enhanced offering a total trail commission of 1% per annum.