High income earners
All earnings are taxed at a maximum rate of 30% within each investment option. The level of tax paid within each investment option will vary and can be lower than 30%. 

Looking to invest for a child’s future
A flexible and tax-effective way for families to provide for a child’s future financial needs.

Save for funeral expenses
A tax-effective way to save for funeral expenses which may also help improve Government benefits and entitlements.

Retirees looking to create a tax-effective income stream
There are no restrictions on when you can start your income stream, including if you are intending to retire early and access to superannuation is not available.

Looking to manage income levels in private trusts
While your trust remains invested in LifeBuilder there is no income for the trust to declare and distribute from its investment.

Looking for an alternative to or to complement superannuation
There are no limits on how much and when you can contribute. You can access your funds at any time.

Need certainty with estate planning and distributing wealth
You can provide for future generations tax-free and with certainty and peace of mind with our EstatePlanner feature.

People looking to qualify for or improve Government benefits
Options to help manage or improve Government benefits and entitlements including using our Bonds Custodian Trust feature.

Borrow against
Both LifeBuilder and ChildBuilder can be used as security against a loan. If your loan is used to generate income, interest and other loan-related costs may be tax deductible. You should seek your own tax advice if you are considering using an investment bond as security against a loan.

Protection from creditors
Similar to superannuation, if you own a LifeBuilder or FuneralBond as an individual and you or your spouse (including de facto spouse) are nominated as a life insured, you will receive protection from creditors in the case of bankruptcy (provided your intention wasn’t to defeat creditors). This protection applies to the investment bond itself as well as any proceeds from the investment bond received on or after the date of bankruptcy.

Tax benefits

Generation Life investment bonds are ‘tax-paid’ investments where tax on the investment bond’s earnings is paid by Generation Life at a maximum tax rate of 30%, rather than your personal marginal tax rate. These earnings don’t contribute to your personal income although a portion of the earnings may be taxable in some circumstances.

From year to year, the actual tax paid by an investment bond can be less than 30% depending on the asset class invested in. This is because of the favourable effects of imputation and foreign tax credits and tax provisioning undertaken for your investment.

After-tax investment outcomes

The returns and performance from Generation Life investment bonds are provided on an after-tax basis – unlike other investments such as managed funds, shares and term deposits where the returns are generally taxable at your marginal tax rate. Over the long term, the compounding effect of a lower tax rate on your earnings can be significant when compared to other direct investment options such as bank accounts, shares or managed funds where tax on earnings is paid by you directly. 

LifeBuilder and ChildBuilder

You can withdraw part or all of your LifeBuilder or ChildBuilder investment at any time. If you hold your investment for at least 10 years, there is no personal tax payable on withdrawals made after this time (the 10-year advantage). The 10-year period begins on the date you first establish your investment. The 10-year period start date can be re-set in some circumstances 

FuneralBond

FuneralBond is designed to be used to meet your future funeral expenses. You cannot withdraw any money from your FuneralBond investment prior to your death. 

The ‘125% opportunity’
Unlike superannuation where personal contribution amounts are capped and subject to penalty tax rates if exceeded, investment bonds give you much greater flexibility on how much you can contribute to your investment. Investment bonds also don’t have a restriction on the maximum value of the investment you can hold, unlike superannuation where a total balance cap might limit your ability to make additional contributions.

With an investment bond, there are no limits on the amount you can invest in the first investment year. Your first investment year starts on the day your bond is set up. Each subsequent investment year starts on the anniversary date of your investment bond’s initial start date.

Each investment year, additional contributions of up to 125% of the previous year’s contributions can be made without re-setting the 10-year advantage period. Those additional contributions benefit from being treated (for tax purposes) as if they were invested at the same time as your initial contribution. This means these additional contributions don’t have to be invested for the full 10 years to be included as part of the 10-year advantage.

It’s important to remember that if you don’t make an additional contribution in a particular investment year, then making an additional contribution in any subsequent investment year will restart the 10-year advantage period. Also, if your contributions in an investment year exceed 125% of the previous investment year’s contributions, your 10-year advantage period will also restart. The investment date is reset to the anniversary date of the investment year that the contributions exceeded 125% of the previous year’s contributions.