For intermediaries June 2017

Cumulus Investments with Recurring Payments

Summary of technical information
Cumulus Investments is an endowment with an investment term of 5 to 10 years. It is
designed to pay a lump sum after the initial term or on death of the last surviving life
insured in return for recurring monthly or annual payments.

Initial term

Minimum: 5 years
Maximum: 10 years

After the initial term has expired, the term is open-ended. This means that the plan will not
automatically be paid out when the initial term has expired, but that the plan will continue
until the client terminates it, or until the death of the last surviving life insured – whichever
comes first.

Recurring payments

Minimum: R1 000 per month

An additional allocation applies to each payment of R2 500 per month or more. The
additional allocation depends on the negotiated commission percentage. For example:
For every R5 000 per month, we invest R5 100 i.e. an extra 2% if 100% commission is
negotiated or R5 350 i.e. an extra 7% if 0% commission is applicable.

Monthly payments Percentage invested

R1 000 or more, but less than R2 500 100% - 105%
R2 500 or more, but less than R5 000 101% - 106%
R5 000 or more 102% - 107%

The relevant additional allocation percentages are also applicable once the recurring
payments reaches R2 500 and R5 000 per month due to contractual payment increases
or ad hoc recurring payment increases.

The minimum ad hoc recurring payment increase is R200 per month - subject to the
restrictions under Section 54 of the Long-Term Insurance Act.

The product is available for monthly and annual frequencies only.

Recurring payments can be made by debit order or stop order.

Contractual annual payment increases on this plan is optional.

Sanlam is a Licensed Financial Services Provider.

No one-off payments are allowed on this product. The Cumulus Investments product with
product code E40 is available for one-off payments only.

Charge structure

The Effective Annual Cost (EAC) measure is an Association for Savings and Investment
South Africa (ASISA) Standard that shows the extent to which the investment return on a
financial product will be reduced if it is terminated. The lower the total EAC number, the
more cost-effective the investment is.

Plan charge
The plan charge is currently R15.50 per month. It is deducted monthly from the fund value
by selling units to the value of this fee.

Payment charge only for stop order payments

Only if the payments are made by stop order a payment charge of 3.5% of each recurring
payment is deducted before the payment is invested.

Variable marketing and administration charge

The charge is a percentage of the fund value and is calculated on a monthly basis, which
means it is divided by 12. It is deducted monthly from the fund value by selling units to the
value of the charge.

This charge reduces as the fund value increases to a higher fund value band.

Fund value band Percentage of fund value

First R500 000 3.30% per annum
Next R250 000 2.70% per annum
Next R250 000 2.50% per annum
Excess above R1m 2.30% per annum

A percentage of this charge will be refunded on the plan in the form of a loyalty bonus,
therefore lowering the impact of this charge.

Fixed marketing and administration charge

This annual charge is a percentage of the fund value and it may differ for different
investment funds. It is taken into account when we calculate the daily unit price of each
investment fund.

A percentage of this charge will be refunded on the plan in the form of a loyalty bonus,
therefore lowering the impact of this charge.

Sanlam Escalating funds: Investment guarantee charge

This charge is 0.80% per annum only if a Sanlam Escalating fund forms part of the plan. It
is a percentage of the fund value and taken into account when we calculate the daily unit
price of each Sanlam Escalating fund.
Investment management charges
An asset manager charges fees for investment research and selecting the underlying
assets for a specific investment fund. These fees are taken into account in the calculation
of the daily unit price of each investment fund. The total investment cost (TIC) consists of
the total expense ratio (TER) plus total cost ratio (TCR). The total investment cost used is
after any rebates received from an asset manager and Sanlam Reality discount, if
applicable, have been deducted.

Loyalty bonus

Rebates (referred to as a loyalty bonus) for the variable as well as fixed marketing and
administration charge are added to the fund value by adding unit to the plan on certain
plan anniversaries, as well as at death, or termination on or after the option date.

The amount of the loyalty bonus is calculated as a percentage of the charges above
deducted from the plan since the date on which the previous loyalty bonus was added, or
since the 5th plan anniversary from the start date for the 1st loyalty bonus.

The rebate percentage for each relevant plan anniversary depends on the initial term at
the start of the plan:

Plan anniversary from start date Initial term: 5 years Initial term: 6 – 10 years
- 5 years 35% 10%
- 10 years 57.5% 67.5%
- Every 5 years thereafter 67.5% 67.5%

If the termination date of any of the above termination events falls between any of the plan
anniversaries in the table, the next plan anniversary in the table will be used to determine
the percentage of the rebate.

Alteration charge

An alteration charge is not applicable if payments are reduced or stopped.

For the following alterations within the 1st 2 years only of the initial term, the fund value
will be reduced by the amount paid to the plan holder and by the alteration charge:

- Termination of the plan

- A loan against the plan
- An ad hoc withdrawal from the plan

The alteration charge percentage of the reduction of the fund value during the 1 st plan
year is 8% and during the 2nd plan year it is 4%.

Transaction charge
For any of these alterations during the initial term, a transaction charge is levied and
calculated as the smaller of R300 and 1% of the fund value.
Investment funds

Availability
Any investment may be closed at any time. This may occur if, for example, legislation
changes or assets become unavailable or it is in our opinion no longer prudent to invest in
the specific investment fund. If a plan is affected, we will request the plan holder to choose
another investment fund allowed at that stage.

Switches and redirections

The client may at any time switch between any of the investment funds available for this
product. The first four switches in a plan year are free of charge. For each subsequent
switch transaction in that plan year, a transaction charge of R700 applies.

Best of breed investment funds

Some of the leading investment funds are available making an appropriate asset
allocation easier. A number of these funds include a built-in unit price guarantee that
allows for protection in uncertain times. Any combination of up to ten of the following
investment funds may be selected to invest:

Sanlam Escalating funds explained

These funds include a built-in guarantee that will ensure that the unit price of a Sanlam
Escalating fund is always at least 80% of the highest unit price it has ever reached since
the original start date of that Sanlam Escalating fund.

A Sanlam Escalating fund invests in a combination of the corresponding unit trust and
cash. Accordingly, the investment return on a Sanlam Escalating fund is a combination of
the investment returns on the corresponding unit trust and cash, and it can differ
substantially from that of the corresponding unit trust.

The Sanlam Escalating funds reduce the volatility of returns, compared to the
corresponding unit trust, and aims to limit capital losses in a declining market, while also
benefiting from rising markets.

The allocation between the corresponding unit trust and cash is not fixed, but varies
according to market conditions:
 When the market value of the corresponding unit trust decreases: The percentage of
assets allocated to cash will be increased to protect the capital value.
 When the market value of the corresponding unit trust increases: The percentage of
assets allocated to the corresponding unit trust will be increased, allowing the Sanlam
Escalating fund to benefit from a rising market.

In market downturns the cash component of a Sanlam Escalating fund may increase
substantially and a Sanlam Escalating fund may invest the bulk of its assets in cash.
Therefore it is not unlikely that the cash component of a Sanlam Escalating fund may
exceed 50% from time to time. In extreme downturns, a Sanlam Escalating fund could
become 100% invested in cash. However, interest earned on the cash coupled with a
recovery in the market will result in a Sanlam Escalating fund gradually switching out of
cash and into the corresponding unit trust again.
 Sanlam funds Risk level or asset class
773 SATRIX Balanced Index Fund 1 Moderately Aggressive
781 SIM Active Income Fund Conservative
774 SIM Balanced Fund Moderate
776 SIM General Equity Fund Equity
872 SIM Inflation Plus Fund 1 Cautious
777 SIM Money Market Fund Cash
1
817 SIM Managed Conservative Fund of Funds Conservative
1
818 SIM Managed Cautious Fund of Funds Cautious
1
819 SIM Managed Moderate Fund of Funds Moderate
820 SIM Managed Moderately Aggressive Fund of Funds 1 Moderately Aggressive
1
821 SIM Managed Aggressive Fund of Funds Aggressive
775 SIM Value Fund Equity
814 Vesting Bonus Fund 1 Cautious
815 NUR Balanced Fund 3 Moderate
Sanlam Escalating funds Risk level
1
854 Sanlam Escalating - Diversified Wealth Builder Moderate
786 Sanlam Escalating - SIM Balanced Fund Cautious
787 Sanlam Escalating - SIM General Equity Fund Moderately Aggressive
783 Sanlam Escalating - Allan Gray Balanced Fund Cautious
782 Sanlam Escalating - Allan Gray Equity Fund 1 Moderately Aggressive
790 Sanlam Escalating - Allan Gray Orbis Global Equity Feeder Fund 1 Moderately Aggressive
791 Sanlam Escalating - Coronation Balanced Plus Fund P Cautious
792 Sanlam Escalating - Coronation Equity Fund P 1 Moderately Aggressive
784 Sanlam Escalating - Investec Equity Fund 1 Moderately Aggressive
788 Sanlam Escalating - Investec Opportunity Fund 1 Cautious
785 Sanlam Escalating - Nedgroup Investments Rainmaker Fund 1 Moderately Aggressive
External funds Risk level
794 Absa Access BCI Balanced Fund 2 Moderate
2
795 Absa Access BCI Cautious Fund Cautious
793 Absa Access BCI Growth Fund 2 Moderately Aggressive
780 Absa Absolute Fund 1, 2 Cautious
1,2
778 Absa Balanced Fund Moderate
779 Absa Select Equity Fund 1,2 Equity
764 Allan Gray Balanced Fund Moderate
763 Allan Gray Equity Fund Equity
762 Allan Gray Orbis Global Equity Feeder Fund 1 Equity
765 Allan Gray Stable Fund Cautious
811 Ashburton Balanced Fund 1,2 Moderate
760 Coronation Balanced Plus Fund P Moderate
766 Coronation Equity Fund P Equity
761 Coronation Money Market Fund P 1 Cash
759 Coronation Property Equity Fund P Property
771 Coronation Strategic Income Fund P Conservative
769 Coronation Top 20 Fund P 1 Equity
1
767 Investec Equity Fund Equity
1
772 Investec Opportunity Fund Moderate
770 Investec Property Equity Fund 1 Property
768 Nedgroup Investments Rainmaker Fund Equity
1.
Not available for tax-paying institutions
2.
For accredited brokers only
3.
Shariah compliant

Sanlam Reality membership

If the plan holder is a Sanlam Reality member, and depending on the Sanlam Reality
option and tier status, the plan holder may qualify for a discount on the fee at benchmark
if invested in any of the Sanlam Investments funds in bold. Any such discount will be
added monthly to the fund value of the plan by adding units to the value of the discount.

Sanlam Reality Tier status Percentage discount on fee at benchmark

Bronze 15%
Silver 50%
Gold 100%

General information

Age at entry
Minimum: 1 age next birthday
Maximum: 90 age next birthday

Availability of this product

- Individuals, a trust of which all the beneficiaries are individuals or a tax-paying
institution may invest in this product.
- New business only i.e. no continuations or conversions to this product are allowed.
- Cumulus Investments for one-off payments cannot be combined with this product and
vice versa.

Nominee to become the new plan holder

A nominee i.e. an individual, a trust of which all the beneficiaries are individuals, or a tax-
paying institution, may become the new plan owner after the death of the plan holder,
provided the existing plan holder is not the only life insured.

Cessions
A collateral or outright cession to another individual, a trust of which all the beneficiaries
are individuals, or a taxpaying institution, is allowed on this plan.

Surrender, withdrawal and loans

Subject to the restrictions under Section 54 of the Long-term Insurance Act, the following
apply during an initial restricted period of 5 years: The surrender or loan value is limited to
the payment amounts plus 5% interest compounded annually. The balance plus
investment growth will be paid at the end of the restricted period of 5 years. Only one
partial withdrawal and one loan are allowed. If a partial withdrawal has been made, the
plan may not be terminated during the restricted period.

After the initial term has expired, the term is open-ended. The client may apply to make
regular withdrawals during the open-ended period. Regular withdrawals can however not
be made together with recurring payments on the plan.
Intermediary remuneration

The following applies to new business and increases whether at the client’s request or
due to contractual annual payment increases on the plan.

The maximum commission payable is 5% of each recurring payment.

Before option date i.e. during initial term

- Up to 50% (i.e. 2.5%) may be paid upfront as initial or discounted commission.

- The amount payable upfront is calculated as the amount equal to the negotiated
percentage of the recurring payment, discounted at 6% per annum over the discount
term which is equal to the term to option date.
- Up to 5% of each recurring payment may be paid as payment-based commission,
subject to the level of the negotiated initial commission.

The initial commission vests over 60 months as follows: None in the first six months after
the start date or increase, 7/60ths of the initial commission in the 7th month after the start
date or increase, and thereafter 1/60th for each further month after the start date or
increase.

The initial commission percentage negotiated at the start of the plan cannot be
renegotiated afterwards. No initial commission on recurring payments is allowed in the
case of a replacement; only payment-based commission.

After option date i.e. during open-ended period

- Initial commission not allowed.

- Only payment-based commission equal to the percentage negotiated initial
commission and the last negotiated payment-based commission before option date,
subject to a maximum of 5% of each recurring payment.
- A fund-based fee of up to 1.14% per annum (including VAT, if applicable) of the fund
value may be negotiated, subject to the level of the payment-based commission. E.g.
if 5% payment-based commission is negotiated, no fund-based fee will be allowed.

Product code
E43

Application form
AEB2099

Comprehensive details are available in the Sanlam Savings technical guide for recurring
payments as well as the new business quotation and plan contract.

This document is part of Sanlam’s on-going support to intermediaries. It does not constitute advice by Sanlam.