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GENERAL ACCOUNT
With general account life insurance products, AEGON carries the investment risk, earns a spread (difference between investment performance and crediting rates to customers) and realizes mortality results.
Traditional life
Traditional life comprises permanent and term life insurance. Permanent life insurance provides life-long financial protection. Most permanent policies have a cash value feature with minimum rate guarantee that accumulates tax-deferred over the life of the policy and can be used to help fund financial goals, particularly in retirement. Whole life insurance is a common form of policy where premiums remain constant over the life of the policy.
Universal life insurance is a flexible or single premium, adjustable benefit contract that allows the customer to pay premiums at any time, in virtually any amount, subject to a minimum and a maximum. The interest rate at which the cash value accumulates adjusts periodically.
Term life insurance covers the insured for a specific period of time. The policy pays death benefits only if the insured dies during the term.
This category also includes life insurance sold as part of defined benefit pension plans, endowment policies and post-retirement annuity products. Bank- or company-owned life insurance (BOLI/COLI) funds the costs of employee benefits, usually with key employees of the company as the insured persons.
CUSTOMERS
individuals
pension funds
companies
banks |
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DISTRIBUTION
(independent) agents
brokers
direct response
worksite marketing
financial institutions |
Fixed annuities
Annuities allow the client to save for the future on a tax-deferred basis and allow payout options that meet the client’s need for income upon maturity. This can be in the form of a lump sum, income for life or income for a period of time.
A fixed annuity is a contract upon which the client is guaranteed a fixed minimum payout. Payments can either start immediately or be deferred to start later. Should the insured die prior to annuitizing the policy, the beneficiary receives the accumulated cash value death benefit. Fixed annuities have a specified rate of interest that can be reset periodically.
CUSTOMERS
individuals
pension funds |
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DISTRIBUTION
(independent) agents
financial institutions
brokers
direct response |
GICs and funding agreements
GICs are contracts issued to tax qualified institutional investors, guaranteeing a rate of return on assets for a fixed period and payment of principal and accumulated interest at the end of the period (usually between three and five years).
GICs are sometimes used to fund the fixed-income plan in defined contribution plans, e.g. 401(k) plans.
Funding agreements are issued to non-tax qualified clients. These are usually perpetual with no stated final maturity and liquidity option. The contract is terminated at the notification of the client; notice provisions range from six months to thirteen months in advance of the payout date.
CUSTOMERS
pension funds*
financial institutions*
money market funds**
municipalities**
overseas investors** |
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DISTRIBUTION
(independent) agents
brokers
direct |
* tax qualified
**non-tax qualified |
ACCOUNT OF POLICYHOLDERS
On account of policyholder products the policyholders carry the investment risk. AEGON earns management and administration fees and mortality results.
Life for account of policyholders
Represents several forms of life insurance and pension products whereby death benefits and cash values vary with the performance of a portfolio of investments. Premiums can be allocated among a variety of investments that offer different degrees of risk and reward including stocks, bonds, combinations of both, or investment products that guarantee interest and principal.
Includes variable universal life (North-America), tontine plans (the Netherlands) and unit-linked life insurance (Europe).
Variable universal life products are similar to universal life products, but have the added feature of investment options and investment assets are maintained in a separate account.
CUSTOMERS
individuals |
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DISTRIBUTION
(independent) agents
marketing organizations
financial institutions
worksite marketing
franchise organizations
brokers |
VARIABLE ANNUITIES
Annuities allow the client to save for the future on a tax-deferred basis and allow payout options that meet the client’s need for income upon maturity. This can be in the form of a lump sum, income for life or income for a period of time.
Premiums paid on variable annuity contracts are invested in funds offered by the insurance company, including bond and stock funds. Selection of funds is dependent upon a client’s chosen level of risk. Account value reflects the performance of the funds. This category includes segregated funds (Canada).
CUSTOMERS
individuals
pension funds |
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DISTRIBUTION
(independent) agents
marketing organizations
brokers
financial institutions |
Fee business
This includes products that generate fee income for AEGON by providing management, administrative or risk services related to off balance sheet assets (i.e. equity or bond funds, third-party managed assets and collective investment trusts). Much of this income is generated by synthetic GICs which differ from traditional GICs by being structured as an off-balance fee-based product with the customer retaining ownership and control of the asset. The trust GIC permits the purchaser to own and manage the investment asset related to these contracts while receiving a guarantee from the company to provide cash advances in the event that qualified plan benefit requests exceed plan cash flow. The cash flow advances allow the customer to avoid liquidation of assets to pay benefits.
CUSTOMERS
individuals
pension funds
asset managers |
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DISTRIBUTION
(independent) agents
marketing organizations
financial institutions
direct |
OTHER ACTIVITIES
Banking
Includes savings accounts and investment contracts (i.e. security lease products). Both products generate investment spread income for AEGON.
Savings accounts offer attractive interest rates while retaining flexibility.
Security lease products provide a combination of monthly interest payments on a loan and a final payout based on the performance of the investments. This category also includes investment products, which offer index-linked returns and generate fee income on the performance of the investments.
CUSTOMERS
individuals
companies |
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DISTRIBUTION
(independent) agents
direct marketing
retailers
franchise organizations |
Accident and health insurance
Limited forms of health insurance, including disability insurance (Netherlands) and accidental death and dismemberment (USA), are offered. AEGON offers no major medical coverage.
Supplemental health insurance normally pays a specified amount for a covered occurrence, or a deductible or coinsurance amount not paid by primary coverage.
Long-term care insurance protects the insured’s income and retirement savings from the costs of long-term nursing home or home health care.
CUSTOMERS
individuals
companies |
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DISTRIBUTION
(independent) agents
brokers
direct marketing |
General insurance
Limited forms of general insurance offered in selected mar kets, i.e. car insurance, liability insurance, household insurance and fire protection.
CUSTOMERS
individuals
companies |
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DISTRIBUTION
(independent) agents
brokers |
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Earnings contribution |
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Product line overview |
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