product launch | the guaranteed income bond offers flexible payment options
Lincoln Financial Group has launched a bond where investors can choose from either an income or growth investment option. The bond is available to investors based in the channel islands, the Isle of Man and the UK.
The Guaranteed Income Bond aims to provide a guaranteed regular income for an agreed fixed period, together with a guaranteed return of the original investment at the end of the period. This is to allow clients to select the frequency of income payments at the outset.
For the Guaranteed Growth Bond, the aim is to provide guaranteed growth on the original investment at the end of an agreed fixed period, together with guaranteed returns of the original investment at the end of the period. The bond offers gross roll-up.
Vince Rennie, head of investments at Lincoln, said: "Investment grade corporate bonds are in the portfolio. This mainly consists of UK fixed interest securities as investors are not interested in taking on currency risk."
Commission is paid to intermediaries at a rate of 1.5% for investments held over a five-year term, with lower rates for shorter terms. The income frequency is either monthly, quarterly or annually, together with a guaranteed return of the original investment at the end of the fixed period.
Brian Sceats, marketing manager at Lincoln, said: "With our new commitment to distribute via intermediaries, we will be reviewing all our existing products and adapting them to suit the needs of intermediaries. For our Guaranteed Income Bond, we have been able to increase income rates in order to maximise the competitive position of the product, which can be sold to investors seeking guaranteed income or simply capital growth. We are particularly competitive over two and three-year terms and, as with all our intermediary products, we will be very flexible and are happy to look at special deals for larger sums."
The bond is aimed at existing policyholders who have a policy that is maturing, or at new customers. It is available to residents of the UK, Isle of Man and Channel Islands.The product also returns the full original investment plus accrued interest on death. Minimum investment is £5,000. The payment must be invested for the full fixed period of the term of the bond. If the investor cashes in the bond before the end of the agreed fixed investment period, the guarantees do not apply and they may get back less than their original investment.
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