Wealth Elite 2 - Sapphire

Life Insurance - Life Protection

Underwritten by AIA International Limited (Incorporated in Bermuda with limited liability)

Wealth from generation to generation

Secure your family’s future by extending your legacy

Extending your legacy to your beloved family

The wealth you have accumulated today can provide a head-start for your future generations giving them the momentum they need to launch their own success stories. As a lasting inheritance for your family, Wealth Elite 2 - Sapphire fortifies your financial foundations, for a legacy that will stand the test of time.

Planning for your family through every life stage

Designed to evolve with you, Wealth Elite 2 - Sapphire helps you achieve different financial goals at different stages of your life. During your peak years, your priority is to ensure your family’s comfort and security. To support your financial commitments, Wealth Elite 2 - Sapphire provides you with substantial Life protection, so your loved ones stay secure no matter what life brings.

As your loved ones find their independence, Wealth Elite 2 - Sapphire automatically adjusts your life protection level and shifts focus to wealth accumulation. That way, you will have an ample legacy to pass on, in the form of a death benefit that will support your family beyond your lifetime.

Potential to cultivate your legacy

Withtheguaranteedcashvalueandnon-guaranteed bonuses offered by Wealth Elite 2 - Sapphire, your future generations will be financially secure.

Allocating your gift to your loved ones

With Wealth Elite 2 - Sapphire, you can allocate the death benefit to your beneficiaries, ensuring that your wealth will be passed to your loved ones as you wish.

Their success stories are catalysed through your legacy

For the protection you need and a legacy that will provide for generations to come, Wealth Elite 2 - Sapphire grows your wealth in the following ways:

(I) Preserve your legacy with life protection

Wealth Elite 2 - Sapphire evolves with your changing needs from one life stage to the next.

When you are younger and your financial commitments are likely to be greater, the plan puts greater focus on life protection. The death benefit can become an immediate source of funds for your designated beneficiary so you can protect the financial security of your loved ones. As you grow older, your financial obligations along with the need for life protection will usually decrease. The focus of the plan will then shift from life protection to wealth accumulation, so you can plan for your legacy.

Death Benefit

If the insured passes away, we will pay the death benefit to the person whom you select in your policy as the beneficiary.

Death Benefit Settlement Option

Apart from a lump sum payment, you can customise the Death Benefit Settlement Option while the insured is still alive and allow your beneficiary to receive the death benefit in regular instalments. You can select not only the benefit amounts to be paid, but also the date of the first instalment payment of death benefit.

(II) Receive potential returns through bonuses

Wealth Elite 2 - Sapphire is a participating whole-life insurance plan that covers the entire lifespan of the insured (who is being protected under the policy). We will distribute the profit generated from this product group by declaring a non-guaranteed Reversionary Bonus and a non-guaranteed Terminal Bonus to you at least once per year starting from the end of the 3rd policy year.

(III) Withdraw cash flexibly to satisfy your changing needs

Flexibly withdraw cash of your choice
With Wealth Elite 2 - Sapphire, you can withdraw your policy values to facilitate your financial planning. To address your changing needs in the future, upon request, you can withdraw part of the guaranteed cash value and/or the non-guaranteed cash values of the Reversionary Bonus and associated Terminal Bonus. However, this will reduce the future values of your policy. After withdrawal of guaranteed cash value, the sum assured of the policy and the one-time premium paid for the basic plan under the death benefit may also be reduced.

Alternatively, you may choose to withdraw all cash values in the policy. Upon such withdrawal, you will receive the sum of the guaranteed cash value and the non-guaranteed cash values of the Reversionary Bonus and Terminal Bonus, and your policy will be terminated.

Protect your family with Mental Incapacity Option
Wealth Elite 2 - Sapphire provides Mental Incapacity Option in case you are suffering from a mental issue and unable to withdraw the policy values. You may designate a family member as a recipient in advance, such that he/she can request withdrawal when you are diagnosed as a permanent mentally incapacitated person, up to designated percentage of policy value. That way, your family can obtain financial support in the event of an emergency. Your remaining policy value may continue growing even after the cash values has been withdrawn under this option.

We will deduct all outstanding debt (if any) under the policy before we make any payments for cash withdrawal.

This plan also provides you with the option of taking out a policy loan to ease unexpected financial difficulties.

(IV) Prepare in advance by pre-underwriting

If you expect the additional need of life coverage in future, you can apply for the Pre-underwriting Option when you apply for your Wealth Elite 2 - Sapphire to benefit from a medical underwriting in advance, based on the total life coverage amount determined by you. Subject to our prevailing rules and regulations, in a specific period of time, you can apply for a new policy of same plan with a simplified medical underwriting directly as long as the total sum assured does not exceed the total life coverage amount that has been approved in the previous medical underwriting process. The option allows you high flexibility on financial planning, so you can plan for your legacy to suit your needs.

(V) One-time premium payment for peace of mind

To allow for greater control over your finances, Wealth Elite 2 - Sapphire only requires one premium payment, so you won’t have to worry about any future premium payments.

Cover at a glance

Important Information

This brochure does not contain the full terms and conditions of the policy. It is not, and does not form part of, a contract of insurance and is designed to provide an overview of the key features of this product. The precise terms and conditions of this plan are specified in the policy contract. Please refer to the policy contract for the definitions of capitalised terms, and the exact and complete terms and conditions of cover. In case you want to read policy contract sample before making an application, you can obtain a copy from AIA. This brochure should be read along with the illustrative document (if any) and other relevant marketing materials, which include additional information and important considerations about this product. We would like to remind you to review the relevant product materials provided to you and seek independent professional advice if necessary.

This brochure is for distribution in Hong Kong / Macau only.

Bonus Philosophy

This is a participating insurance plan designed to be held long term. Your premiums will be invested in a variety of assets according to our investment strategy, with the cost of policy benefits (such as charges to support guarantees (if applicable)) and expenses deducted as appropriate from premiums or assets. Your policy can share the divisible surplus (if any) from related product groups  determined by us. We aim to ensure a fair sharing of profits between policy owners and shareholders, and among different groups of policy owners. For this plan’s target profit sharing ratio between policy owners and shareholders, please visit our website at https://www.aia.com.hk/en/our-products/further-product-information/profit-sharing-ratio.html.

Divisible surplus refers to profits available for distribution back to policy owners as determined by us. The divisible surplus that will be shared with policy owners will be based on the profits earned from your plan and similar plans or similar groups of policies (as determined by us from time   to time by considering factors such as benefit features, policy currencies and period of policy issuance). Divisible surplus may be shared with the policy owners in the form  of reversionary bonuses and terminal bonuses as specified in your policy. A very significant proportion of such divisible surplus arising from the experience from your plan and similar plans or similar groups of policies will be shared with policy owners.

We review and determine the bonus amounts payable to policy owners at least once per year. Divisible surplus depends on the investment performance of the assets which we invest in and the amounts of benefits and expenses we need to pay for the plan. It is therefore inherently uncertain. Nevertheless, we aim to deliver relatively stable bonus payments over time through a smoothing process by spreading out the gains and losses over a period of time. The actual bonuses declared may be different from those illustrated or projected in any insurance plan information provided (e.g. benefit illustrations) depending on whether the divisible surplus, past experience and/or outlook are different from what we expected. If bonuses are different from our last communication, this will be reflected in the policy anniversary statement.

A committee has been set up to provide independent advice on the determination of the Reversionary Bonus and Terminal Bonus amounts to the Board of the Company. The committee is comprised of members from different control functions or departments within the organisation both at AIA Group level as well as Hong Kong local level, such as office of the Chief Executive, legal, compliance,  finance  and risk management. Each member of the committee will exercise due care, diligence and skill in the performance of his or her duties as a member. The committee will utilise the knowledge, experience, and perspectives of each individual member to assist the Board in the discharge of its duty to make independent decision and to manage the risk of conflict of interests, in order to ensure fair treatment between policy owners and shareholders, and among different groups of policy owners. The actual Reversionary Bonus and Terminal Bonus, which are recommended by the Appointed Actuary, will be decided upon the deliberation of the committee and finally approved by the Board of Directors of the Company, including one or more Independent Non-Executive Directors, and with written declaration by the Chairman of the Board, an Independent Non-Executive Director and the Appointed Actuary on the management of fair treatment between policy owners and shareholders.

To determine the Reversionary Bonus and Terminal Bonus of the policy, we consider both past experiences and the future outlook for all the factors including, but not limited to, the following:

Investment returns: include interest earnings, dividends and any changes in the market value of the backing assets, i.e. the assets in which we invest your premiums (after deducting the cost of policy benefits and expenses). Depending on the asset allocation adopted for the insurance plan, investment returns could be affected by fluctuations in interest income (both interest earnings and the outlook for interest rates) and various market risks, including interest rate risk, credit spread and default risk, fluctuations in listed and private equity prices, real estate prices as well as foreign exchange rates if the currency of the backing assets is different from the policy currency, etc.

Claims: include the cost of providing the death benefits and other insured benefits under the product(s).

Surrenders: include policy surrenders, partial surrenders and policy lapses; and the corresponding impact on the investments backing the product(s).

Expenses: include both expenses directly related to the policy (e.g. commission, underwriting, issue and premium collection expenses) and indirect expenses allocated to the product group (e.g. general administrative costs).

Some participating insurance plans allow the policy owners to place their annual dividends, guaranteed and non- guaranteed cash payments, guaranteed and non-guaranteed incomes, guaranteed and non-guaranteed annuity payments with us, earning interest at a non-guaranteed interest rate. To determine such non-guaranteed interest rate, we consider the returns on the pool of assets in which these amounts are invested with reference to the past experience and future outlook. This pool of assets is segregated from other investments of the Company and may include bonds and other fixed income instruments. You have the right to request for historical accumulation interest rates before committing the purchase.

For dividend & bonus philosophy and dividend / bonus history, please visit our website at www.aia.com.hk/en/dividend-philosophy-history.html.

Investment Philosophy, Policy and Strategy

Our investment philosophy is to deliver stable returns in line with the product’s investment objectives and AIA’s business and financial objectives.

Our investment policy aims to achieve the targeted long- term investment results and minimise volatility in investment returns over time. It also aims to control and diversify risk exposures, maintain adequate liquidity and manage the assets with respect to the liabilities.

Our current long-term target strategy is to allocate assets attributed to this product as follows:

The bonds and other fixed income instruments predominantly include government and corporate bonds and are mainly invested in the United States and Asia-Pacific. Growth assets may include listed equity, equity mutual funds, physical real estate, real estate funds, private equity funds and private credit funds, and are mainly invested in the United States, Asia-Pacific and Europe. Growth assets generally have a higher long-term expected return than bonds and fixed income assets but may be more volatile in the short term. The range of target asset mix may be different for different participating insurance plans. Our investment strategy is to actively manage the investment portfolio i.e. adjust the asset mix dynamically over a range that can be wider than the target range in response to the external market conditions and the financial condition of the participating business. For example, there may be a smaller proportion of growth assets when interest rates are low and a larger proportion of growth assets when interest rates are high. When interest rates are low, the proportion of growth assets may be even smaller than the long-term target strategy, so as to allow us to minimise volatility in investment returns and to protect our ability to pay the guaranteed benefits under the insurance plans, whereas the proportion of the growth assets may be even larger than the long-term target strategy when interest rates are high to allow for the possibility that we may share more investment opportunities in growth assets with the policy owners.

Subject to our investment objectives, we may use a material amount of derivatives (such as  through  pre-investing  partly or fully expected future premiums) to manage our investment risk exposure and for matching between assets and liabilities, for example, the effects of changes in interest rates may be moderated while allowing for more flexibility in asset allocation.

Our general currency strategy is to minimise currency mismatches for bonds and other fixed income instruments. For these investments, our current practice  is to endeavour to currency-match asset purchases with the currency of the underlying policy (e.g. US Dollar assets will be used to back US Dollar insurance plans). However, subject to market availability and opportunity, bonds or other fixed income instruments may be invested in a currency other than the currency of the underlying policy and currency swaps may be used to minimise the currency risks. Currently assets are mainly invested in US dollars. Growth assets  may be invested in a currency other than the currency of the underlying policy and the selection of the currency is made according to our investment philosophy, investment objectives and mandate.

We will pool similar participating insurance plans for investment to determine the return and we will then allocate the return to specific participating insurance plans with reference to their target asset mix. Actual investments (e.g. geographical mix, currency mix) would depend on market opportunities at the time of purchase, hence may be different from the target asset mix.

The investment strategy may be subject to change depending on the market conditions and economic outlook. Should there be any material changes in the investment strategy, we will inform policy owners of the changes, with underlying reasons and impact to the policies.

Key Product Risks

1. The plan may make certain portion of its investment in growth assets. Returns of growth assets are generally more volatile than bonds and other fixed income instruments, you should note the target asset mix of the product as disclosed in this product brochure, which will affect the bonus on the product. The savings component of the plan is subject to risks and possible loss. Should you surrender the policy early, you may receive an amount considerably less than the total amount of premiums paid.
2. You may request for the termination of your policy by notifying us in written notice. Also, we will terminate your policy and you / the insured will lose the cover when one of the following happens:
   • the insured passes away; or
   • the outstanding debt exceeds the guaranteed cash value plus the non-guaranteed cash value of the      Reversionary Bonus (if any) of the policy.
3. We underwrite the plan and you are subject to our credit risk. If we are unable to satisfy the financial obligations of the policy, you may lose your premium paid and benefits.
4. You are subject to exchange rate risks for plans denominated in currencies other than the local currency. Exchange rates fluctuate from time to time. You may suffer a loss of your benefit values and the subsequent premium payments (if any) may be higher than your initial premium payment as a result of exchange rate fluctuations. You should consider the exchange rate risks and decide whether to take such risks.
5. Your current planned benefit may not be  sufficient to meet your future needs since the future cost of living may become higher than they are today due to inflation. Where the actual rate of inflation is higher than expected, you may receive less in real terms even if we meet all of our contractual obligations.
6. As the cash value of Reversionary Bonus is non-guaranteed, there may be a risk of overloan when there is adjustment on the cash value of Reversionary Bonus. Loan repayment within one month is required when there is an overloan, otherwise your policy will be terminated and you or the insured may lose the cover.
7. “Pre-underwriting Option” is non-guaranteed and only be available and valid for 36 months upon AIA’s approval. This option will be  terminated  upon  product  closure  of Wealth Elite 2 - Sapphire and any reserve approved pre-underwriting limit cannot be transferred or carried forwarded to any existing or new AIA policies or products. Pre-underwriting Option does not represent any additional life protection amount recommended by sales intermediary nor AIA, customers are reminded to select and purchase suitable life protection amount based on own financial needs.
8. “Mental Incapacity Option” enables the designated family member to withdraw part or all of your policy values for one time. Any withdrawal transaction exercised by this option cannot be reversed or cancelled upon completion, you are reminded to consider carefully before exercising this option and shall assess and understand any potential financial impact to you.

Note for Pre-underwriting Option

This option is subject to underwriting requirements determined by us from time to time. Once approved, it will simplify the medical underwriting process for subsequent Wealth Elite 2 - Sapphire policy, you need to consent pre-set health questions and other requirements of policy application will remain unchanged. You must consent  to the health questions truthfully. If you fail to disclose or withhold pre-existing health conditions, the approval of the policies or future claims will be affected. If the pre-set health questions are not passed, you will need to perform full health underwriting and complete full health questions in normal application form. We have a right to decline any application via pre-underwriting option if the medical underwriting result is unsatisfied.

The pre-approved sum assured for the subsequent  policies will expire after 36 months. The approved pre-underwriting option will be no longer available when there is product closure of Wealth Elite 2 - Sapphire. We will give you a written notice of any revision 30 days before product closure.

Note for Mental Incapacity Option

The existing designated recipient will be automatically revoked when one of the following happens:

i. you designate a new recipient and it is approved by us;

ii. any change of policy owner;

iii. policy is assigned;

iv. we have been notified that there is a guardian or committee appointed under the Mental Health Ordinance (Cap. 136 Laws of Hong Kong SAR) (or if there is a guardian or committee appointed under similar laws in another jurisdiction); or

v. we have been notified that the policy owner has an enduring power of attorney covering the policy.

In the event that there is a dispute between the designated recipient and any other person, such as the guardian, committee, attorney, or beneficiary(ies) in our reasonable belief that there is such a dispute, we reserve the right to withhold the payment of cash withdrawal under the Mental Incapacity Option until such dispute is resolved.

Claim Procedure

If you wish to make a claim, you must send us the appropriate forms and relevant proof. You can get the appropriate claim forms in www.aia.com.hk, from your financial planner, by calling the AIA Customer Hotline (852) 2232 8968 in Hong Kong, or by visiting any AIA Customer Service Centre. For details related to making a claim, please refer to the policy contract. If you wish to know more about claim related matter, you may visit “File A Claim” section under our company website www.aia.com.hk.

Suicide

If the insured commits suicide within one year from the date on which the policy takes effect, our liability will be limited to the refund of premiums paid (without interest) less any outstanding debt.

Incontestability

Except for fraud, we will not contest the validity of this policy after it has been in force during the lifetime of the insured for a continuous period of two years from the date on which the policy takes effect.

 
Warning Statement and Cancellation Right

Wealth Elite 2 - Sapphire is an insurance plan with a savings element. Part of the premium pays for the insurance and related costs. If you are not happy with your policy, you have a right to cancel it within the cooling-off period and obtain a refund of any premiums and levy paid. A written notice signed by you should be received by the Customer Service Centre of AIA International Limited at 12/F, AIA Tower, 183 Electric Road, North Point, Hong Kong within the cooling- off period (that is, 21 calendar days immediately following either the day of delivery of the policy or cooling-off notice (informing you / your nominated representative about the availability of the policy and expiry date of the cooling-off period, whichever is earlier)). After the expiration of the cooling-off period, if you cancel the policy before the end of the term, the projected total cash value may be substantially less than the total premium you have paid.

Effective from 1 January 2018, all policy owners arerequired to pay a levy on each premium payment made for both new and in-force Hong Kong policies to the InsuranceAuthority (IA). For levy details, please visit our website at www.aia.com.hk/useful-information-ia-en or IA’s website at www.ia.org.hk.

Important Notes from the Insurance Agent of The Bank of East Asia, Limited

• The Bank of East Asia, Limited (“BEA”), being registered with the Insurance Authority as a licensed insurance agency, act as an appointed licensed insurance agent for AIA International Limited (incorporated in Bermuda with limited liability) (“AIA”). This insurance plan is a product of AIA but not BEA.
• This insurance plan is underwritten by AIA and it is not a bank savings plan with free life insurance coverage. Part of the premium pays for the insurance and related costs. The premium paid is not a placement of a savings deposit with the bank and hence is not protected by the Deposit Protection Scheme in Hong Kong.
• Add-on plan (if any) is an add-on coverage for this insurance plan with additional premium paid required. BEA does not distribute any add-on plan; therefore, you cannot apply the add-on plan through BEA. If needed, you can contact AIA Customer Service Centre for inquiry after the policy is issued by AIA.
• In respect of an eligible dispute (as defined in the Terms of Reference for the Financial Dispute Resolution Centre in relation to the Financial Dispute Resolution Scheme) arising between BEA and the customer out of the selling process or processing of the related transaction, BEA is required to enter into a Financial Dispute Resolution Scheme process with the customer; however, any dispute over the contractual terms of the product should be resolved between AIA and the customer directly.
• Claims under this insurance plan must be made by you to AIA directly. You can get the appropriate claim form by calling AIA Customer Service Hotline (852) 2232 8968 in Hong Kong or visiting www.aia.com.hk or any AIA Customer Service Centre. For details, please refer to the policy contract provided by AIA.
• BEA’s sales staff (including direct sales staff and authorised agents) are remunerated not only based on their financial performance, but also according to a range of other factors, including their adherence to best practices and their dedication to serving customers’ interests.
• The information you disclosed in response to all AIA’s questions must be true, complete and correct. Failure to disclose true, complete and correct information to AIA may render AIA unable to accept or process your application or the policy void.
• You are reminded to carefully review the relevant product materials provided to you and be advised to seek professional / independent advice when considered necessary.
• For the benefits and returns mentioned throughout the product brochure and Important Notes, please note that the policy owner is subject to the credit risk of AIA. If the policy owner discontinues and / or surrenders this policy in early policy years, the amount of benefits he / she will get back may be considerably less than the total premiums he / she has paid. Projected and / or potential benefits and / or returns (e.g. reversionary bonus, terminal bonus) presented in the product brochure are not guaranteed and are for illustrative purposes only. The actual future amounts of benefits and / or returns may be lower than or higher than the currently quoted benefits and / or returns.
• Apart from the key product risks mentioned in product brochure, you are also reminded of the following risks:
  1. Liquidity risk – this insurance plan is designed to be held long term. You should only apply for this insurance plan if it is intended to pay the premium for the whole of the premium payment term. Should you surrender the policy early, the total surrender value (if any) you get back may be less than the total premium you have paid. You may suffer a loss in case of early termination of this policy.
  2. Risk from surrender – if you cancel the policy before the end of the benefit term, you may suffer a significant loss, and the total surrender value received may be substantially less than the total premiums paid.
  3. Non-guaranteed bonus scales – non-guaranteed benefits are based on the bonus scales of AIA determined under current assumed investment return. The actual amount payable may change anytime with the values being higher or lower than those being projected. In other words, a change in the current assumed investment return will affect the reversionary bonus and terminal bonus you will receive. Under some circumstances, the non-guaranteed benefits may be zero.