Prudential is the latest insurer to offer a universal life product, PruUniversal Vantage.
This comes just after Great Eastern Life launched their own universal life product, Prestige Legacy some weeks ago. AIA also has their own universal life product, AIA Platinum Legacy.
For those who are not familiar with universal life (UL), this class of product might seem confusing at first.
An universal life product is used to provide for a large (mega) sum assured.
Premiums are usually paid in a single lump sum or spread over a few years.
Technically, the easiest way to understand how a universal life works is to relate it to a single premium investment-linked plan (ILP).
The main difference is that instead of being invested into funds, the UL will provide for a crediting rate (or interest) on the lump sum. So, it is like an ILP invested into interest generating instruments.
Prudential’s PruUniversal Vantage offers a guaranteed minimum of 3% interest.
Of course, we should never compare the interest rate we can obtain from a UL with a simple bank deposit because you need to factor in all the charges within the plan. After netting off the charges, the returns will be less than what you will receive from the guaranteed rates.
Other universal life products sold here include Manulife’s Heritage, HSBC’s Jade Global Select and Transamerica Life’s TransAce and TransUltra series.
Most universal life products are denominated in USD as the assets are usually used to buy USD denominated bonds in order to provide for a decent crediting rate.