The Tailored Life Plan - Quilter International€¦ · The Tailored Life Plan has two life cover options to choose from, so you can select the option that best suits your individual

For Professional Investors.

The Tailored Life PlanAn investment-linked life assurance policy for clients looking to pass on their wealth

Front cover title goes here2

The Tailored Life Plan could be suitable for you if you: – are an individual aged between 18 and 89 and wish to insure

your life in order to create extra wealth on your death for your beneficiaries

– are trustees or a corporate entity and wish to insure the life of an individual aged between 18 and 89

– want to create liquid assets on your death, for example to pay inheritance tax due on assets held all over the world

– want to structure your wealth to ensure it is passed on to your selected beneficiaries on your death

– want to preserve and accumulate wealth for legacy planning purposes

– are looking to invest at least $500,000/£350,000/€500,000 or currency equivalent into this product by cash or transferring existing assets* in lieu of premium

– want to have access to a wide range of assets such as collective investment schemes, shares traded on major stock exchanges, fixed interest securities and alternative investments*

– understand the associated risks of investing – want to have the ability to appoint a fund adviser* or

discretionary asset manager*.* Subject to our approval

The Tailored Life Plan might not be suitable for you if you: – have no other savings or investments – are new to investing and are not comfortable in making

investment decisions – are not happy to accept the risk of potential investment losses

and are looking for a guaranteed investment return – require instant access to your money.

Your trusted wealth adviserWe do not sell our products directly to customers, but instead through wealth advisers. Because investing is an important decision, we recommend that you seek your own independent financial advice. Such advice will help you to decide whether to take out this product that is issued by Quilter International Isle of Man Limited (Quilter International) and, if you do, will help you to manage any investments within it. Quilter International cannot give you financial advice.You will need to provide us with confirmation that your wealth adviser can act on your behalf. Subject to our approval we will then deal with your nominated wealth adviser, who will act as your intermediary between you and us. Unless you instruct us otherwise, we may pay commission to your wealth adviser in respect of any products you take out. Details of this payment will be available from your wealth adviser.We use the term wealth adviser within this brochure – you may also see the terms ‘intermediary’ or ‘financial adviser’ used in other documents and correspondence to mean the same.

Quilter International 3

ContentsPlease read this brochure alongside the Tailored Life Plan’s, ‘At a Glance’ and Policy Terms.

The Tailored Life Plan – a solution for complex assets �� 4

A combined investment solution �� 6

How the tailored life plan works for you �� 8

Life cover options �� 10

Seven key benefits of the tailored life plan �� 12

Meeting your needs with the tailored life plan �� 14

About Quilter International �� 16

The Tailored Life Plan4

When personal wealth is held in various forms, often across many different jurisdictions, it can present complex wealth planning challenges that call for professional advice built on trust, reputation and results. It also requires a product that can help to reduce the risk involved when it comes to holding and, importantly, passing on these assets.

That’s why the relationship you have with your trusted wealth adviser is vital, as they have the knowledge and expertise to help meet your unique wealth planning objectives.

Our role at Quilter International is to support you and your wealth adviser by delivering products you can tailor to your unique needs and personal circumstances.

In addition, we have our own technical experts ready to help your wealth adviser navigate complex tax, trust and regulatory issues which may affect you.

Thinking about what will happen when you die is never easy – how your family will cope, how your business could be affected, or how those important to you will deal with the potential tax liabilities that your estate could be subject to. Selecting a product to help safeguard your wealth and ensure that it is received by the right people at the right time can help to reduce the risk of managing and passing on your assets, easing any worries you may have.

The Tailored Life Plan – a solution for complex assetsWe understand that as a wealthy individual, you may own a variety of assets and investments which present a unique set of challenges and opportunities.


A whole of life investment-linked life assurance policyQuilter International’s Tailored Life Plan is a whole of life investment-linked life assurance policy especially designed for individuals like you who would like to:

insure their lives so that, depending on individual needs, their family, their business and anyone else important to them are provided for after they are gone.

create liquid assets on death to, for example, pay tax liabilities on global assets.

be able to take advantage of investment opportunities.

The Tailored Life Plan is suitable for professional investorsA professional investor is a person or entity that possesses the required expertise, experience and knowledge to adequately understand the features and risks associated with this product, the underlying investment options available (including assets which are not designed for or suitable for retail investors) and services being offered.

Generally, a professional investor would be an entity or a person that would fall under one or more of the following definitions:

A person whose level of financial sophistication is consistent with local professional investor (or equivalent) regulations that may apply in the market where the business is conducted.

National and regional governments, public bodies that manage public debt, central banks, international and supranational institutions such as the World Bank and the International Monetary Fund.

An entity authorised, licensed and regulated to operate in the financial markets and whose main activity is investing in financial instruments.


Quilter International’s tailored life plan

Your trusted wealth adviser

Fund Adviser

Discretionary Asset Manager

Existing Assets/ Investments

A combined investment solution


Your trusted wealth adviser Understands your circumstances. Provides holistic financial planning.

Researches financial planning solutions.

Conducts due diligence on product and service providers and identifies the most suitable solution.

Regularly reviews and monitors how your investments are performing.

Deals with the day-to-day management of the investment portfolio.

Provides professional investment management.

Can have the opportunity to create a truly bespoke and diversified portfolio, designed to match your appetite for investment risk.

Quilter International’s Tailored Life Plan Is a whole of life investment-linked

life assurance policy.

Is a tax efficient ‘wrapper’ that can travel with you.

Allows you to transfer existing assets into your policy. ̂ *

Is available in a choice of currencies.

Provides policyholder protection through a statutory compensation scheme.

^ Assets include mutual funds, stocks, currency, structured notes, bonds, private company shares and, for third party custodian arrangements, exchange-traded options. Investment involves risk. Quilter International does not offer investment advice or investment guarantee and we suggest that you seek independent professional advice. Do not rely on this product brochure alone and please read other relevant literature for details.

Fund adviser If you wish, you can nominate an independent fund adviser to work alongside your wealth adviser. The independent fund adviser can guide you both through the process of choosing assets and then manage your portfolio for you. There are two types of fund adviser;

1. Non-discretionary (advisory) – where the fund adviser makes the deals on your behalf, however, the decision making in terms of the asset choice remains with you.

2. Discretionary – you delegate the responsibility for making asset choices to the fund adviser.

Discretionary asset managerYou can request us to appoint a discretionary asset manager to manage the investments (subject to our approval). A discretionary asset manager is a firm which acts on behalf of Quilter International and makes investment decisions based on the objectives and risk profile defined by you. This could give you the reassurance that the investments are being proactively managed and you hold the most appropriate assets for your needs.

Existing assets/investmentsYou can fund the premiums of a Tailored Life Plan by transferring in your existing assets^* such as stocks, shares and mutual funds.* Subject to acceptance by Quilter International.



Life assurance protection The Tailored Life Plan is primarily designed to provide a high level of life cover. This can help ensure that the people or organisations chosen by you will receive a valuable death benefit payment* when you pass away.

We recognise that your individual needs may be varied and complex, and so you have freedom to choose who will benefit from the death benefit payment, such as your family, your business or a chosen charity. * The death benefit will be paid as a cash amount, or a combination of transfer of assets and cash, subject to our approval.

Take advantage of investment growth and life assurance coverThe benefit of the Tailored Life Plan is that it allows you to take advantage of global investment opportunities which can help to sustain and grow the value of your policy.

The value of the policy is determined by the value of the assets you choose to link the policy to, less any outstanding charges. The assets linked with the policy will work for you simultaneously for both protection and investment purposes.

A key benefit of having an asset-linked life assurance policy is that, instead of cash, you can fund the premiums of a Tailored Life Plan by transferring in your existing assets**^ (see page 9) such as stocks, shares and mutual funds. This can greatly reduce the need to liquidate your assets, thereby retaining cash flow and avoiding potential exposure to market risks.

Before selecting the most suitable life cover policy for you, it’s worth considering what options are available with the help of your wealth adviser.

^ Assets include mutual funds, stocks, currency, structured notes, bonds, private company shares and, for third party custodian arrangements, exchange-traded options. Investment involves risk. Quilter International does not offer investment advice or an investment guarantee and we suggest that you seek independent professional advice. Please read other relevant literature for details and do not rely on this product brochure.

** Subject to acceptance by Quilter International.

Term life Regular whole of life Universal life Variable universal life

(tailored life plan)Types of premium accepted

Only cash is accepted Only cash is accepted Only cash is accepted Cash or transfer of existing assets**^

Investment Not applicable Not applicable

– Typically limited to Corporate Bond funds only

– Managed by the insurance company

– Expected return at 2-3% per annum

– Full array of investment types: mutual funds, stocks, currency, struc-tured notes, bonds, etc.**

– Managed by you or by your appointed fund adviser and with a custodian of your choice**

– Full wealth growth potential

Protection Typically stops at age 80

Life insurance products available in the marketThe following table compares generic life insurance products and highlights the benefits of the Tailored Life Plan.

How the Tailored Life Plan works for you


The value of investments can fall as well as rise and investors may get back less than they invest. The graphs on pages 10 and 11 are for illustrative purposes only, net of any charges.

Value of underlying assets

Age

Life cover optionsThe Tailored Life Plan has two life cover options to choose from, so you can select the option that best suits your individual needs. For both of the following options, the growth on the assets within the policy will help fund the life cover and policy charges, though in times of poor market performance these charges may reduce the overall value of your policy.

Life cover onlyWith this option, the death benefit* (see * reference on page 11) payable will be the higher of either the sum assured or the policy value, less any outstanding charges (except any early withdrawal charge), at the time of death of the relevant life assured.

The sum assured or the value of the policy, if higher, will be paid out upon our acceptance of a claim.

So for example, you invest $1m with $5m life cover (sum assured). On death of the relevant life assured, $5m or the policy value, if higher, is paid out.

$5m

$4m

$3m

$2m

$1m

0

40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80

Level of life cover


* For Life Cover only, the death benefit is payable as a cash amount (you can request an in specie transfer which may be accepted at our discretion). For Life Cover plus, the death benefit is payable as a cash amount, by transfer of assets (at our discretion) or a combination of both.

Life cover plusWith this option, the death benefit* payable will be the sum assured plus the policy value, less any outstanding charges (except any early withdrawal charge), at the time of death of the relevant life assured.

The sum assured is paid out upon our acceptance of a claim. The remaining death benefit* will be paid after the underlying assets have been sold or transferred.

So for example, you invest $1m with $5m life cover (sum assured). On death of the relevant life assured, $5m of life cover is paid out plus the value of the underlying investment.

Value of underlying assets

Age

$10m

$9m

$8m

$7m

$6m

$5m

$4m

$3m

$2m

$1m

40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 800

Level of life cover (underlying assets plus $5m)


Key benefits of the Tailored Life plan

1 Access to world-class asset managementQuilter International provides access to a comprehensive asset portfolio management platform through which you can gain access to a full array of global investment opportunities. You can then work with your trusted wealth adviser to build your investment portfolio according to your needs at different stages of your life.

Flexibility to suit your changing needsIn order to give you extra flexibility, the Tailored Life Plan offers the ability to take one-off* and regular withdrawals to meet your needs for liquidity (subject to potential early withdrawal charges, acceptable sustainability checks and meeting the minimum residual value remaining in the policy). You may foresee a golden opportunity to expand your business or need urgent cash to cope with a personal financial need. You can make use of the withdrawals to provide the flexibility you need, however this may reduce the policy’s ability to support the required level of life cover.

The flexibility of the policy also allows you to amend the investment portfolio as your needs change throughout your life to reflect a wish for more security, greater growth potential, or a different ethical slant.* One-off withdrawals may reduce the level of the sum assured on the Life Cover only option.

Monitor the invested assets via a custodian arrangement of your choiceWe have our own custodian for the assets you place in your Tailored Life Plan. However, you may decide not to use our custodian and instead keep the relevant assets with a custodian of your own choice, subject to our acceptance. As a result, subject to the relevant authority, you may continue to use the services that your current bank or custodian provide to you, and there is no need to disturb or sell your existing assets.

Protect your private information As the policy owner, you can be confident that your personal data held by Quilter International, including data held in connection with the Tailored Life Plan, is protected by the Isle of Man Data Protection Law and Regulation.

Also, you can nominate your beneficiaries in strict confidence and can therefore be assured that your wealth can, in most circumstances, be passed on to the people you wish without disclosure to others who might have conflicting interests and could interrupt the estate settlement.

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5 Invest through a leading offshore financial centreQuilter International investors will benefit from the Isle of Man’s policyholder protection scheme, which covers policies issued by an authorised life assurance company based on the island. So, in the unlikely event that Quilter International becomes insolvent, you will be able to claim compensation of up to 90% of the policy value, less any contractual charges.

Global expertise of Quilter InternationalQuilter International is part of Quilter plc, a leading provider of advice, investments and wealth management both in the UK and internationally, managing $151 billion^ on behalf of over 900,000 customers (as at 31 March 2019). Quilter’s offering includes platform based investments and protection, asset management solutions and discretionary management, as well as financial advice services across various global jurisdictions including the UK, Europe, Latin America, Africa, the Middle East, Singapore and Hong Kong.

^ Exchange rate sourced from the Bank of England.1 GBP = 1.3141 USD as at 1 April 2019.

Take the Tailored Life Plan with you, wherever you goWe understand that your life can take you in many different directions and you could find yourself living and/or working in different countries. That’s why we’ve designed the Tailored Life Plan so that you can take it with you if you need to move from country to country.

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The Tailored Life Plan offers the ability to take one-off* and regular withdrawals to meet your needs for liquidity...


Scenario 1: No estate planning

The couple set aside $4m for their retirement, and leave the remaining $6m to their children via a will, with each child receiving $3m.

Scenario 2: Using the Tailored Life Plan to keep more for retirement

The couple wish to keep a large proportion of their estate for their own retirement, and pass on the remainder to their two children.

They retain $8m to use in their retirement, and invest the remaining $2m in the Tailored Life Plan with a selected sum assured of $6m, and their children as the beneficiaries.

The couple enjoy the $8m during their retirement, double what they would have with no estate planning, and when they pass away the death benefit from the Tailored Life Plan is $6m. This is split equally between the two children who receive $3m each.

Scenario 3: Using the Tailored Life Plan to leave more for their children

The couple choose to retain a smaller amount for their retirement with the goal of passing more wealth on to their two children. They retain $4m to finance their retirement and invest $6m in the Tailored Life Plan with a selected sum assured of $18m, and their children as beneficiaries.The couple enjoy the $4m during their retirement, and when they die the death benefit from the Tailored Life Plan is $18m, meaning each child receives $9m – three times more than they would have received with no estate planning.

Meeting your needs with the Tailored Life PlanBelow are some examples of how the Tailored Life Plan can be used to help you prepare for your future. Please note that these case studies are fictional and used purely to illustrate a possible real-life scenario and are based on Quilter International’s interpretation of law and tax practice as at June 2019.

Case study 1 – Legacy and estate planning A married couple owns an estate worth $10m as a result of building up their own business. They are looking to set aside a sum to enjoy during their retirement and to pass on the remainder to their two children.


Scenario 1: No IHT planning

The entrepreneur does not plan for how his heirs will pay the IHT bill after he dies. Liquidity will be needed to pay the bill within six months, which could prove difficult depending on the properties held within the portfolio. The need to sell assets to pay the IHT bill will reduce the amount that his heirs will ultimately receive.

The entrepreneur transfers the shares of the offshore private investment company to Quilter International in lieu of a premium for a Tailored Life Plan on a Life Cover plus basis. There may be costs and potential tax consequences arising from this transaction. The entrepreneur also chooses to add an additional $500,000 cash premium. This, along with rental income from the property portfolio, will be used to pay the ongoing policy fees to Quilter International.

A sum assured of $20m was selected for the Tailored Life Plan which can be used to pay the IHT bill when he passes away, eliminating the pressure to sell potentially illiquid assets in a short timeframe to pay the tax bill.

The entrepreneur, with his wealth adviser, can review the value of the company as the years pass to ensure that the sum assured will be sufficient to pay any potential IHT. Increases to the sum assured are subject to Quilter International’s acceptance. After his death, the death benefit will be made up of the offshore company shares and the cash sum assured. To ensure that the share transfer and cash payment is made to his heirs without the delay of first obtaining the necessary grant of probate, the entrepreneur had completed a beneficiary nomination naming his heirs and how much each should inherit.

Case study 2 – Planning for UK Inheritance TaxA successful entrepreneur who is not UK domiciled has a UK residential property portfolio held within an offshore private investment company, which he plans to leave to his heirs when he passes away.

UK inheritance tax (IHT) at 40% will be payable on the value of his shareholding in the offshore company that is directly attributable to the UK residential property. This is known in UK legislation as a ‘UK residential property interest’.

The entrepreneur’s accountant has valued his UK residential property at $50m which means that currently IHT of $20m must be paid within six months of his death.*

Scenario 2: Using the Tailored Life Plan to plan for IHT

* Unless Her Majesty’s Revenue and Customs (HMRC) agree that the payments can be made in equal instalments over 10 years. HMRC may also charge interest if they agree to this request.


We are one of the few financial service providers that operate in multiple global markets. Because we have a deep understanding of local cultures and regulations, we are able to offer robust wealth management solutions for wealthy individuals, wherever they live or work around the globe.

Why Quilter International – stability and securityA large number of international financial institutions, including banks and offshore insurance companies, are set up in the Isle of Man. Quilter International is one of the largest financial services employers in the Isle of Man.

Quilter International in the Isle of Man The Isle of Man has a strong

reputation internationally and is a self-governing British Crown dependency with an independent tax and legal system.

The island has a risk rating of Aa2 (very low credit risk) from Moody’s – a leading bond credit rating company.

Quilter International Isle of Man Limited is regulated by the Isle of Man Financial Services Authority and authorised in accordance with the Insurance Act 2008.

About Quilter InternationalQuilter International is one of the world’s leading cross-border providers of wealth management solutions.

We enjoy a long-established reputation for expertise and integrity, supported by a commitment to leading the financial industry in ethical and responsible business practices.

Latin America

UK


Keeping your information confidential and secureThe Isle of Man’s data protection law and regulations are designed to balance an individual’s rights to privacy with the legitimate needs of businesses to process personal information. This includes respecting all people’s rights in the obtaining and use of their personal data, regardless of their nationality or place of residence.

The law and regulations ensure that no insurance or investment company provides any confidential information to third parties (e.g. family members or government officials) except where regulations require us to or in certain circumstances such as addressing suspected criminal activity.

Statutory compensation schemeIn the unlikely event that Quilter International Isle of Man Limited is unable to meet its liabilities, policyholders are protected under the Isle of Man Life Assurance (Compensation of Policyholders) Regulations 1991.

The scheme offers: protection for plans issued by

Isle of Man authorised life insurance companies, wherever in the world an investor resides

compensation for clients of up to 90% of their investment value less any applicable charges.

Hong KongEurope

SingaporeMiddle East and Africa


Please noteYour wealth adviser looks at your financial arrangements holistically and can help make sure that the Tailored Life Plan fits in with your overall objectives and plans. They will be able to answer your questions, recommend specific assets and fund managers, and provide you with further supporting material, including the full Terms and Conditions.

If you decide that you wish to open a Tailored Life Plan, your wealth adviser will help you with the application and with selecting the assets that are most suitable for you.

The financial services ombudsmanThe Isle of Man provides investors with a free independent dispute resolution service through the Financial Services Ombudsman Scheme in the event that Quilter International Isle of Man is unable to resolve a client’s complaint.

Supporting your wealth adviserTechnical excellence is at the heart of the support we offer your trusted adviser. In recognition of this, our technical team has been awarded Platinum Employer Partner Status by the Society of Trust and Estate Practitioners (STEP) – underlining the team’s ongoing commitment to continued technical development.

Your right to cancelYou have the right to cancel your Tailored Life Plan and obtain a refund of any premium(s) paid, less any applicable charges* and any fall in the value of the assets linked to your Tailored Life Plan. You have 30 days from the date that you receive the policy schedule to let us know you want to cancel. Further information on how to cancel can be found in the Tailored Life Plan Terms and Conditions.* Where relevant, applicable charges include

non-refundable fund charges, fees we have paid to your wealth adviser on your behalf and bank charges.

For more support, please contact your wealth adviser.

About Quilter International(cont’d)

Business unit name goes here 19

This document and fictional case studies within it are based on Quilter International’s interpretation of the law and tax practice as at June 2019. While this interpretation is believed to be correct, Quilter International can give no guarantee in this respect or that tax reliefs and the tax treatment of investment funds will remain the same in the future. The value of any tax reliefs will depend on individual financial circumstances.

The value of investments can fall as well as rise and investors may get back less than they invest.

www.quilterinternational.com Calls may be monitored and recorded for training purposes and to avoid misunderstandings.

Quilter International Isle of Man Limited is registered in the Isle of Man under number 24916C.

Registered and Head Office: King Edward Bay House, King Edward Road, Onchan, Isle of Man, IM99 1NU, British Isles. Phone: +44 (0)1624 655 555 Fax: +44 (0)1624 611 715.

Licensed by the Isle of Man Financial Services Authority

Quilter International is registered in the Isle of Man as a business name of Quilter International Isle of Man Limited.

19355/INT19-1326/December 2019

Documents

The Tailored Life Plan - Quilter International€¦ · The Tailored Life Plan has two life cover options to choose from, so you can select the option that best suits your individual