In the past few months, we have seen a number of single premium non-participating insurance plans being launched by different life insurance companies: AIA, NTUC, Prudential, HSBC and TM Asia Life.
The plans are either 2 or 5 year terms offering yields of between 1.4% to 2.75% p.a.
- AIA Wealth Accumulator
- HSBC Guaranteed Saver Plus
- PruInvestor Guaranteed Plus
- TM NestEgg (SP Guaranteed)
- NTUC Capital Plus
The recent trend sees the yield getting lower compared to the series that were launched earlier in the year. For example, HSBC’s current Guaranteed Saver Plus gives a yield of 1.8% to 2.0% p.a. for a 5-year term, compared to an earlier 2.25% to 2.75%.
However, the take-up rate for these plans remains tremendous. With the plans being of “limited size”, consumers have been quick to take up the plans. The latest offering by TM Asia Life took less than a week to be fully subscribed.
Looks like this is the hot product in our market now. The liquidity fueling these products is likely to be funds being transferred from banks.