Comments on: What is Really Cool About Manulife Income Plus

By: The Financial Blogger

The Financial Blogger — Thu, 12 May 2011 01:10:13 +0000

@Robert,

at the age of 71, you don’t have many downside… unless you withdraw your funds at one point. However, if you use the Manulife Plus as a “pension”. However, one must consider his heirs at one point as well

By: Robert

Robert — Wed, 11 May 2011 02:09:36 +0000

If someone starts the Manulife Income plus at age 71 does he have to wait 20 years for the guarantee? What is his overall downside in using this product?

By: Informed planner

Informed planner — Mon, 02 Mar 2009 16:20:03 +0000

AHHH, now you’re getting it…….always ask for more than you know you’ll get, right? Sounds like you’re in it for the short term and this product is geared towards a long term financial plan.
The things you are asking for are all there it seems, but only if you stick with the plan.

It would be impossible for any company to reserve against the future value of these guarantees, as required in Canada, if they were only short term promises. Principal deposits are in fact guaranteed, you just have to hold it long enough, or on death the principal is secure even if the market value of your account
is down. If you choose portfolio funds, they are also autore-balanced by the manager without “sales charge”.
Furthermore, you can always move between the income plus series of funds without “sales charges”

Not sure what you mean by, “protects the client with a cap……..

This product does not force you to “annuitize” at any time.
If held as an RRSP, the conversion to a RRIF at 71 still allows for a reset of the guarantee where the market is strong, even though you are taking RIF(required) income from the plan.

Finally, you are guaranteed the greater of RIF minimum or the 5% without affecting the guarantee of income for life.

By: Richard

Richard — Mon, 02 Mar 2009 00:34:52 +0000

IP:

How about a product that allows all the upside with a +5% on the down side? Guaranteed so long as the product is kept for at least 1 year? (Minimal guarantee of amount invested)

Lock ins done every year instead of every 3. Auto rebalancing of funds every quarter (without a sales charge), allows for moving between funds without a sales charge. Protects the client with a cap of 50% of liquid assets in the account. 65% with approval.

And the best part, does not annuitize unless the client specifically asks for it. NO FORCED ANNUITIZATION AT ANY TIME.

Granted, I don’t know if this is offered in Canada.

By: Informed planner

Informed planner — Sun, 01 Mar 2009 19:51:17 +0000

Hello everyone,
If you’d like to emulate what would happen in a private pension plan, only you’re in control of the investment decisions, then this product is for you! Essentially every investor receives all the upside potential of the market, without any of the downside risk if held till age 65. It virtually wipes out things like timing risk, and the fear of outliving your money. The longer you leave your money in the income plus series of funds, the greater your income guarantee becomes, sounds like how a pension plan would work to me. Even if the accumulated value of your plan goes to ZERO, your lifetime income guarantee continues to pay out, forever. The small premium you pay in the increased MER and IP “fee” is a small price to pay for the security you’ll gain!
Since this product is geared towards a more conservative investor to start with, the maximum equity exposure a client can obtain is about 80%. Given where we are in the market cycle right now I’d say that one could grow the guarantee quite substantially over the next few years, having it reset every 3 years and you’ll capture all the rebounding effect in short order!
Keep in mind that the Guaranteed Minimum Withdrawal Benefit
GMWB can never go down from the previous re-set amount, in the Manulife product, Income Plus.

Canadians are flocking to these guarantees from the few companies offering this style of product, and Billions of $ have been transferred into these arrangements. I’m not surprised!

By: The Financial Blogger

The Financial Blogger — Fri, 06 Feb 2009 11:07:41 +0000

hummm,
I realized that the MER’s for this kind of product is quite high (there is no free lunch in finance ).

This is the price to pay to have security in the mutual fund universe

By: hmmm...

hmmm... — Thu, 05 Feb 2009 20:43:40 +0000

You do realize that the MER’s are well over 3% (3.5-4.0%) so any upside from market increases will be dramatically dampened…

By: Four Pillars Investing

Four Pillars Investing — Mon, 22 Dec 2008 10:04:21 +0000

[...] Financial Blogger actually found something positive about Manulife Income Plus. [...]

By: The Financial Blogger

The Financial Blogger — Fri, 19 Dec 2008 19:43:45 +0000

JF,
The goal is to have the plan B of getting the 5% “virtual bonus” and get the life income when you are about to withdraw.

This is what I got from the company. I’ll made further researches since you are putting the seed of doubt in my mind

By: JF

JF — Fri, 19 Dec 2008 15:06:17 +0000

If I remember if you opt for the income portion before 65 it’s guaranteed fot 20 yrs if 65 than you get for life. A little confused about your calulation for the 400K exemple: from what i see the lock-in is available every three year if market is up so you would then get the 5% bonus on this new amount. I don’t think you get the 5% bonus on either the original value or market value at year end, on market value only if it has had the lock-in feature.