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Heritage Group Plan: Contribution Period

Heritage Group Plan: Contribution Period. Heritage Education Services. Module Outline. Objectives Concepts Heritage group plan specifics – through the contribution period Points to remember. Objectives. Prepare new representatives for product exam Introduce Heritage Group Plan

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Heritage Group Plan: Contribution Period

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  1. Heritage Group Plan: Contribution Period Heritage Education Services

  2. Module Outline • Objectives • Concepts • Heritage group plan specifics – through the contribution period • Points to remember

  3. Objectives • Prepare new representatives for product exam • Introduce Heritage Group Plan • Through contribution period

  4. Concepts • Scholarship plan • Pooled funds • More investment options

  5. Why Have a Prospectus? • Provide financial information on the plan • Provide full disclosure on the details of enrollment in the plan • Provide a list of Directors and Officers of the Foundation and Distributor

  6. What is a Unit? • Measure of investor’s interest in underlying investment pool • Cost varies by age & contribution schedule • Actuarially designed to attract approximately the same amount of investment income by maturity

  7. Getting Started • Subscriber can be anyone • Non-parent subscribers • Beneficiary must be under 15 years old • Two distinct periods • Contribution period • Pay-out period • Maturity date

  8. Courtesy Dating • Back-dating contract effective date • Take advantage of lower cost per unit • Up to 60 months (5 years) • Make up contributions & income

  9. Escrow Account • Escrow account not registered • No social insurance number for beneficiary • Does not qualify for government grants • May remain open 24 months • No SIN received, contributions less insurance premiums returned • SIN received, transferred to registered account

  10. Contribution Period • Defined by contribution schedule selected by subscriber • Per unit contribution schedule available in prospectus • Seven (7) contribution methods • Single • Annual 5 yr annual 10 yr annual • Monthly 5 yr monthly 10 yr monthly

  11. Contribution Period • Payable to Heritage Educational Foundation • Changing the contribution schedule • Subscriber may change at any time • May require adjustment in contributions and interest • Ensures equal amount of interest earned over life of Plan

  12. Fees • Membership fee • Depository charges • Administration fee • Trustee Fee • Portfolio Management fee

  13. Insurance • Underwritten by Sun Life Assurance • Optional life & disability coverage • Pay contributions to end of contribution schedule • Applies to first death or total disability • 9-month waiting period on disability

  14. Insurance Qualifications • Not available on single contribution Plans • Subsciber(s) must be under age 65 • Pre-existing condition clause • In place of health statement and/or underwriting • Applies for 12 months after coverage begins

  15. Insurance Premiums • Based on # of units and contribution schedule • Included in prospectus contribution schedule • Paid with contributions • Does not attract CESG

  16. Review Questions • Refer to Course Book for review Questions

  17. Termination – In First 60 days • Begins later of contract date or first payment date • Return of contributions & membership fees • Grants returned to government • No penalty to subscriber

  18. Termination – After 60 Days • Principle only returned • Interest remains in the Plan • Commission charge back if outstanding membership fees • Grants returned to government • Loss of grant room • Interest may be payable to subscriber as AIP

  19. Reactivation • Conditions • Under 15 years of age; OR • Within 6 months of inactivation, if over 15 • Reactivation options • Pay missed contributions and interest • Restructure Plan • Terminated Plans can not be reactivated

  20. Adding Units • Up to Beneficiary’s 15th birthday • Cost based on current rates for attained age • Must meet qualifications for insurance

  21. Reducing Units • Within 60 days • Entitled to return of membership fees • After 60 days • Membership fees not refunded or applied to remaining units • If reactivated later, paid fees applied to reactivated units

  22. Review Questions • Refer to Course Book for review Questions

  23. Points to Remember • Heritage Group Plan is pooled fund • Sold in units • 7 contribution methods • Optional life & disability insurance available

  24. Points to Remember • Termination • Within 60 days • After 60 days • No reactivation

  25. Points to Remember • Reactivation conditions • Up to Beneficiary’s 15th birthday; OR • If over 15, within 6 months of inactivation

  26. Thank You

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