Policy Allocations

The different investment choices inside a policy are known as subaccounts. Subaccounts are usually mutual funds or fixed savings options. When establishing the policy, owners choose the subaccounts they want their premiums to be invested into each time a premium payment is made. These selections are called allocations.

Allocations can be set-up for specific types of policies. A default allocation is often used to hold premium until the policy reaches the Free Look or Cooling Period end date. Then the monies are directed to the specific allocations required by the product.

OIPA functionality allows allocations that display either specific funds, fund classes or fund models.

Variable Annuities

  1. Future Allocations: these are the default funds for the policy.

  2. Automatic Payment Program: these are the funds for periodic contributions to a policy during the accumulation phase of the annuity.

  3. Systematic Withdrawal Program: this is where funds are identified for withdrawals that occur for a specific length of time at a predetermined frequency.

  4. Rebalancing Program: this is where adjustments can be made to the amount of money allocated to each investment portfolio.

  5. Dollar Cost Averaging Program: money is contributed from the start and placed in a more conservative fund, such as a Money Market fund, and then gradually transferred into higher risk funds.

Unit Linked

Unit linked policies hold the initial premium amount in a general fund until the Cooling Period has expired. Then the funds are transferred to the Future Allocations funds.

  1. Future Allocations: these are the default funds for the policy.

  2. Directed Deductions: these are the funds that money should be taken from when a withdrawal or partial surrender activity is processed on the policy.

  3. Rebalancing Program: this is where adjustments can be made to the amount of money allocated to each investment portfolio.

  4. AIP From Fund: this is the unit linked version of cost averaging. A source fund is identified here.

  5. Automatic Investment Plan: this is the second part of the unit linked version of cost averaging. The target funds are identified here.

Define Allocations at the Policy Level

Open a policy and click the Allocations link from the Policy Entity Navigation list to open the Allocations screen. Enter the following information for each type of allocation that applies to the policy. Each allocation will appear as a section in the Allocation screen.

  • Select the number of funds that will be used.

  • Select the Allocation method.

  • Click the Equal Amount/Percent checkbox if the money should be distributed equally between the funds.

  • Select the type of funds.

  • Enter the amount or percent to be directed to each fund if the Equal checkbox is not selected.

    Important   Make sure to click the Save button to save the allocation settings.

Future Allocations section on Allocation Screen

Note: When the History tab in the Allocations Screen is clicked, the Allocations history is displayed.