AIA Wealth Accumulator 2 is a 4-year non-participating single premium endowment plan that provides financial protection against death and guaranteed returns on capital at maturity.

This plan is available on a limited tranche basis. The offer period is until the tranche size is met.

Key Highlights of The Plan

• Provides an effective yield of 1.68% per annum
• Capital guaranteed at maturity
• Guaranteed Issuance without any medical underwriting
• Policy term of 4 years
• Minimum premium of $20,000 (cash only)

To leave your comments, please go to : Launch of AIA Wealth Accumulator 2

This type of plan is what we call a disability income type of plan.

A disability income plan provides a monthly income benefit as long as you are unable to perform the material duties of your work after a two or three months waiting period. You might be more familiar with the normal type of insurance which provides a lump sum benefit in the event of death or total and permanent disability (TPD).

A disability income plan seeks to plug the gap before TPD occurs as it provides protection even if the disability is partial or temporary.  It is a kind of term plan with no savings component so the premiums can be quite affordable. As the plan is heavily related to occupation, premiums will vary by occupation class.

A typical disability income plan will provide a monthly payout for up to 24 months if you are unable to perform the material duties of your own occupation. The payout will then continue (up to a certain age) as long as you are unable to perform any occupation for which you are reasonably suited by reason of your training, experience or training.

With the launch of this plan, there are now three disability income plans in the market, with the other two plans being offered by GE and Aviva. I hope to see more insurers offering this type of plan as more competition can only be good for consumers. Already, I can see distinct differences between the offerings of the three companies.

To leave your comments, please go to : AIA Premier Disability Cover

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.

To leave your comments, please go to : Prudential PruUniversal Vantage

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.

To leave your comments, please go to : AIA 2Pay5

AIA A$ Wealth Accumulator is a 4.5-year, non-participating single premium endowment plan. The guaranteed yields are as follows:

Single Premium Amount (A$)

$10,000 – $29,000 : 4.50% p.a.
$30,000 – $74,000 : 4.60% p.a.
$75,000 and above : 4.70% p.a.

As an example, a single premium of A$88k will give a guaranteed amount of A$108,204.80 on maturity.

Take note that this product is based in Australian dollars (A$) and the maturity amount will also be paid in A$. Thus, it might not be suitable for those who are averse to foreign currency exchange rate risk or who are unable to understand the implications of currency risk.

On the other hand, if you already plan to hold on to A$ long term or intend to use A$ for future needs (eg education funding or retirement), then the currency risk would be less of an issue.

This product is available for a limited period only.

As a comparison, current foreign currency fixed deposit rates for A$ is about 3-4% (depending on amount) for a 12-month duration.

So the AIA (A$) Wealth Accumulator gives a slightly higher yield but a longer lock in period. If there is an early surrender of the plan, then there will also be a slight loss in capital.

Surrender value based on A$1000 invested
End of Policy Year, Cash Value (A$)

1, 888.30
2, 982.80
3, 1,084.10
4, 1,162.70
4.5 ,1,219.10

To leave your comments, please go to : AIA Wealth Accumulator (A$)