Martin Lee @ Sg
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AIA 2Pay5

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.

  • 2.00% :  $5,000 – $9,500
  • 2.10% : $10,000 – $14,500
  • 2.15% : $15,000 – $24,500
  • 2.20% : $25,000 onwards

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

Suitable Market

Individuals who require a guaranteed return of 2% over 5 years and does not have any immediate cash needs.

Unsuitable Market

Individuals who want short term liquidity.

Risks of the product

  • Surrender penalty upon early withdrawal
  • Automatic surrender due to non-payment of 2nd annual premium

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.

Leave a Comment:

Kyra Lau says 13 years ago

Qn: Can I use my SRS Account to purchase this plan?

    lioninvestor says 13 years ago

    Hi Kyra,

    This plan is cash only.

Jasmin says 13 years ago

I am more worried about going bust than beating the inflation.

    lioninvestor says 13 years ago

    Hi Jasmin,

    Fair enough. If you have no faith in the organisation, then don’t touch their products.

Singaporean says 13 years ago

What happens if AIA goes bust 4 years from now? Is the sum insured insured?

Daniel says 13 years ago


This plan does not suit current inflation environment of 3.5%. Going forward with economies around the globe picking up, it does not make sense to set aside the amount for 5 years. As Independent Financial Adviser, what will you suggest with investment of such amount and time frame?

    lioninvestor says 13 years ago

    Hi Daniel,

    Every individual has a different risk profile and objectives therefore I don’t really have a standard answer to your question.

    For example, a “buy STI ETF” formula might not necessarily work for everyone.

    Some people will end up buying high and selling low.

    Even if they RSP, past experience has shown that some people will halt the RSP just when prices are low!

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