Next week, AIA will be launching the S$ 2Pay5 plan, a 5-year non-participating, limited 2-year pay product (Edit: The plan has been launched already).
How it works is that you will need to pay annual premiums for two years, and then receive a lump sum payout at the end of five years.
The plan offers a guaranteed yield ranging from between 2% to 2.2% depending on the annual premium amount.
For example, if your annual premium is $10k, your maturity benefit will be
10000 x 1.021 x 1.021 x 1.021 x 1.021 x 1.021 + 10000 x 1.021 x 1.021 x 1.021 x 1.021 = $21961
Individuals who require a guaranteed return of 2% over 5 years and does not have any immediate cash needs.
Individuals who want short term liquidity.
Risks of the product
The death benefit of this plan is the higher of total premiums paid (excluding advance premiums, if any) and the cash surrender value
The plan also provides for an additional 10% accidental death benefit in the first policy year.
If you are interested in this plan, you can contact me here.