The prima platinum plan 8 has a term of five years and two weeks but could mature from year one if the early maturity feature, or kick out, is triggered.
The 105 per cent option will pay 11.5 per cent for every year the plan is invested. If both indices are at or above 105 per cent of their initial values at the end of year one, investors will receive 11.5 per cent growth plus their original capital. If the indices do not meet this condition, the plan will continue on the same basis, paying 23 per cent at the end of year three, 34.5 per cent at the end of year four and so on.
The 100 per cent option is similar but will pay 10 per cent growth for each year the plan is invested. It can kick out on annual basis if both indices are at or above 100 per cent of their initial values.
The 90 per cent option pays 6 per cent growth for every year that the plan stays invested. This option can kick out on annual basis if both indices are at or above 90 per cent of their initial values, so that index falls of up to 10 per cent do not affect the returns and return of capital.
If the product does not mature early, investors in any of the options will still get a full capital return at maturity but no growth provided neither index falls by more than 50 per cent during the term. An index that breaches this barrier must return to at least its initial value at maturity, otherwise capital will be reduced by 1 per cent for every 1 per cent fall in the worst performing index.
Some investors may appreciate a choice of options so that they can select the best risk and reward trade-off for their needs. Choice can often mean greater complexity but as each option is similar, a client who understands one option should also be able to understand the others.