Insurance, MPF & Trust
AIA Deferred Annuity Plan 2
Start of main contentLife Insurance - Retirement Income
Underwritten by AIA International Limited (Incorporated in Bermuda with limited liability)
Secure your future today with guaranteed retirement annuity income stream
A STABLE GUARANTEED ANNUITY INCOME STREAM WITH FLEXIBILITY ON THE ACCUMULATION PERIOD AND ANNUITY PAYMENT OPTIONS TO PLAN FOR YOUR RETIREMENT.
It is never too late or too early to start planning for your retirement. No matter where you are in life’s journey, now is the perfect time to take the first step towards secure and fulfilling golden years. AIA Deferred Annuity Plan 2 is a Qualifying Deferred Annuity Policy (“QDAP”) which provides potential return and reliable annuity income stream with issue age up to 70.
No matter you are 18 or 70 years old, AIA Deferred Annuity Plan 2 is designed to help you build the nest egg you need by converting your savings into a steady stream of annuity income to cover daily expenses when you retire. Additionally, the premiums are tax deductible+(if eligible). It is time to craft your future - the early retirement you crave is not a dream.
Plan Highlights
“AIA”, “the Company”, “We”, “our”, or “us” herein refers to AIA International Limited (Incorporated in Bermuda with limited liability).
Stable returns for retirement
You may choose for the annuitant to start receiving Monthly Annuity Payment at age 50, 55, 60, 65, 70 or 75 (i.e. the Annuity Payment Start Age). The payment is under level pattern which means a fixed amount of guaranteed Monthly Annuity Payment will be paid monthly during the Annuity Period, giving the annuitant greater stability during retirement.
Alternatively, you may choose to accumulate the Monthly Annuity Payment in your policy to potentially gain interest for your withdrawal later. If no annuity payment option has been chosen by you, we will pay the Monthly Annuity Payment to the annuitant monthly during the Annuity Period. You can change your annuity payment option without additional charge.
Also, once the policy has been in force for a year, we may provide you with a one-off non-guaranteed cash amount (if any) called a Terminal Dividend upon the occurrence of the earliest of the following:
• you surrender the policy;
• the annuitant as the insured, who is the person protected under the policy, passes away before the policy terminates and the death benefit is payable in lump sum (according to the death benefit calculation); or
• the Terminal Illness Benefit is paid, provided the date of the second certification of the insured’s terminal illness is after the 1st policy year.
Monthly Annuity Payment is comprised of both guaranteed Monthly Annuity Payment and non-guaranteed Monthly Annuity Payment (if any). During the Annuity Period, the guaranteed cash value of this plan will decrease when the guaranteed Monthly Annuity Payment begins while non- guaranteed Monthly Annuity Payment (if any) will be credited into your policy on a monthly basis.
Both the non-guaranteed Terminal Dividend (if any) and the non-guaranteed Monthly Annuity Payment (if any) are a share of divisible surplus (if any) from this insurance plan and related participating insurance plans. Please refer to the sections “Dividend Philosophy” and “Investment Philosophy, Objective and Strategy” for details.
The range of minimum to maximum Internal Rate of Return (i.e. IRR) at maturity, assuming the Monthly Annuity Payments are received monthly by the annuitant who is a 45-year-old non-smoking male at application, is shown in the table below.
The IRR at maturity varies with Insured’s Age at Application, Annuity Payment Start Age and premium payment mode.
This plan is designed to be held for a long term period. Should you surrender (or partially surrender) your policy early, you may receive an amount considerably less than the total amount of premiums paid. If you surrender your policy at the end of the first policy year, the surrender value^ which includes guaranteed cash value and non-guaranteed Terminal Dividend (if any) that you will receive per US$10,000 annual premium at the end of the first policy year, is shown in the table below.
Annuity Period | Surrender value^ per US$10,000 annual premium at the end of the first policy year |
10 years | US$4,150 (41.5% of annual premium) |
5-year premium payment term
AIA Deferred Annuity Plan 2 is denominated in US dollars, the minimum annual premium is US$4,800. With a 5-year premium payment term, the premium amounts are guaranteed to remain stable throughout the entire period of your premium payment term.
Your choice of annuity payment arrangement for your retirement
ii. at least 30 days before both the originally and newly selected Annuity Payment Start Age.
^ The value illustrated is based on the current dividend scale which is neither indicative of future performance nor guaranteed. Past performance or current performance of our business should not be interpreted as a guide for future performance. The actual amount of non-guaranteed Monthly Annuity Payment (if any) and non-guaranteed Terminal Dividend (if any) payable throughout the duration of the policy may vary at AIA’s sole discretion, which may be more or less favourable than those illustrated. The value illustrated assumes that no cash withdrawal and no policy loans are taken throughout the term of the policy, the Monthly Annuity Payment is paid to the annuitant by monthly payments and that all premiums are paid in full when due.
Benefit received when policy matures
Provided that the insured is alive at the end of the benefit term, the policy will mature and we will pay you any accumulated Monthly Annuity Payment with any interest accrued (if accumulation has been chosen as the annuity payment option of Monthly Annuity Payment) in a lump sum.
If the worst should happen
If the insured passes away, we will pay the Death Benefit to the person whom you select in your policy as beneficiary in a lump sum. Alternatively, you can choose in advance during the insured’s lifetime to allow the beneficiary to receive any unpaid Monthly Annuity Payment commencing from the insured’s death until the end of the Annuity Period, provided the death of the insured occurs on or after the commencement of the Annuity Period. For the details and calculation of the death benefit, please refer the section “Cover at a glance” for details.
Terminal Illness Protection
AIA Deferred Annuity Plan 2 also helps alleviate the financial burden of medical expenses by providing the Terminal Illness Benefit. In the unfortunate event that the insured is diagnosed with a terminal illness and is expected to pass away within 12 months due to the terminal illness, we will pay you a one-off advance payment of the death benefit.'
Easy to join
No medical examination is required for AIA Deferred Annuity Plan 2 applications, as long as the total annual premiums do not exceed the aggregate limit which we set for each insured from time to time, subject to our prevailing rules and regulations.
Delay premium payments in case of unemployment
Unemployment may cause a significant impact on your finances. Hence, the Unemployment Benefit helps ease your financial burden during tough times while keeping the insured protected, even if life takes an unexpected turn. Subject to terms and conditions and our approval, if you as the policy owner are laid off and become involuntarily unemployed during the premium payment term of your basic plan, you may claim for the Unemployment Benefit. Once it is approved, the grace period for late premium payment under the basic plan and any add-on plans will be extended from 31 days up to 365 days to give you a safe buffer. Your Unemployment Benefit claim needs to be submitted within 30 days of your involuntary unemployment. The Unemployment Benefit is available once per policy and relevant proof is required.
Extra cover for more protection
To help support you against unfortunate circumstances, depending on your needs, you can select an add-on plan under which we will waive the future premiums for your AIA Deferred Annuity Plan 2 if the insured becomes totally and permanently disabled before the age of 60.
Please note that all add-on plans are subject to additional premiums, underwriting and exclusions. However, premiums of add-on plans are not eligible for tax deduction. All benefits under add-on plans will be terminated when your AIA Deferred Annuity Plan 2 terminates.
Save more while planning your retirement
AIA Deferred Annuity Plan 2 is a qualifying deferred annuity policy where you can apply to deduct your premiums paid from your annual taxable income (if eligible). This means if you are taxpayer in Hong Kong, you can apply for tax deduction of up to HK$60,000* per taxpayer each year which may allow you to plan ahead to grow wealth for your retirement while also enjoying a tax deduction.
As an example, the illustration below shows the maximum tax deduction amount that you, as a policy owner, could claim for you and your spouse if you purchase AIA Deferred Annuity Plan 2.
* HK$60,000 is the maximum tax deductions per taxpayer per year for qualifying annuity premiums and MPF tax deductible voluntary contributions.
For details on tax deductions, please visit the website of Inland Revenue Department (IRD) of HKSAR or contact IRD for tax related enquiries. You can also consult your tax and accounting advisors for tax advice.
Cover at a glance
1 The annuitant will receive Monthly Annuity Payment if you choose to have the annuitant to receive the Monthly Annuity Payment by monthly cash payments. If you choose to accumulate the Monthly Annuity Payment in the policy, the surrender value (consists of the sum of guaranteed cash value, any accumulated Monthly Annuity Payment with any interest and Terminal Dividend (if any), less any policy debt (if any)) will be paid to you upon surrender of your policy. You have the absolute right to change and choose the payment options of Monthly Annuity Payment. Under both scenarios, you will receive the policy value (if any) at maturity.
2 Total premiums paid refers to the total amount of premium(s) due and paid. For policy with premium prepayment, the prepaid premium will be credited to your future premium deposit account and accumulate at the prevailing non-guaranteed interest rate on daily basis. The prepaid premium in future premium deposit account will not be included in the total premiums paid. You can withdraw the full amount of the prepaid premiums including any interest accumulated from the future premium deposit account at any time without any charges.
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 only.
Dividend Philosophy
This is a participating insurance plan in which we share a portion of the profits earned on it and related participating insurance plans with the policy owners. It is designed to be held long term. The premiums of a participating insurance plan will be invested in a variety of assets according to our investment strategy. The cost of policy benefits (including guaranteed and non-guaranteed benefits as specified in your plan that may be payable on death or surrender, as well as charges we make to support policy guarantees (if applicable)) and expenses will be deducted as appropriate from premiums of the participating insurance plan or from the invested assets. We aim to ensure a fair sharing of profits between policy owners and shareholders, and among different groups of policy owners.
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 terminal dividends and other non- guaranteed benefit payments as specified in your policy.
We review and determine the dividend 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 dividend payments over time through a smoothing process by spreading out the gains and losses over a period of time. The actual dividends 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 dividends 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 dividend amounts to the Board of the Company. The committee is comprised of members from different control functions or departments within the organisation both at the AIA Group level as well as Hong Kong local level, such as office of the Chief Executive of the Company, legal, compliance, finance, investment and risk management. Each member of the committee will endeavour to 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 decisions 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 dividends, 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 dividends of a participating policy, we consider both past experience and the future outlook of all 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 claims for death benefits and any other insured benefits under the insurance plan.
Surrenders: include policy surrenders, partial surrenders and policy lapses; and their corresponding impact on the backing assets.
Expenses: include both expenses directly related to the policy (e.g. commission, underwriting, issue and premium collection expenses) and indirect expenses allocated to the insurance plan (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.
For dividend philosophy and dividend history, please visit our website at https://www.aia.com.hk/en/dividend-philosophy-history.html
Investment Philosophy, Objective and Strategy
Asset Class | Target Asset Mix (%) |
Bonds and other fixed income instruments |
75% - 100% |
Growth assets | 0% - 25% |
Key Product Risks
1. Non-guaranteed Benefits Risk
The non-guaranteed benefits of the plan include monthly non-guaranteed annuity payments and terminal dividend. These non-guaranteed benefits are determined by the Company from time to time at its absolute discretion. The monthly non-guaranteed annuity payments are a share of divisible surplus (if any) which is not guaranteed and may fluctuate during the annuity period. The terminal dividend is a once-only entitlement to a further share in the divisible surplus of the Company (if any), which is to be determined by the Company in its absolute discretion. Terminal dividend is not guaranteed and it may be altered or withdrawn at any time by the Company. Please refer to the Dividend Philosophy section of this product brochure for the factors which the Company considers when determining the monthly non-guaranteed annuity payments and terminal dividend.
2. Investment and Early Surrender Risk
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 non-guaranteed Monthly Annuity Payment (if any) and non-guaranteed Terminal Dividend (if any) on the product. The savings component of the plan is subject to risks and possible loss. The policy is designed to be held for a long term period. Should you surrender (or partially surrender which will be allowed after the end of the premium payment term and all premiums when due have been paid) the policy early, you may receive an amount considerably less than the total amount of premiums paid.
3. Non-payment of Premium Risk
You should pay premium(s) on time and according to the selected premium payment schedule. If you stop paying the premium before completion of the premium payment term, you may surrender the policy, otherwise, the premium will be covered by a loan taken out on the policy automatically. When the loan balance exceeds the sum of guaranteed cash value and any accumulated Monthly Annuity Payment with interest of the basic plan, the policy will terminate and you will lose the cover. The surrender value of the policy will be used to repay the loan balance, and we will refund any remaining value. You may receive an amount considerably less than the total amount of premiums paid in case you reduce or stop paying the premium.
4. Termination Conditions
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 before the policy matures:
- the insured passes away and
i. the death benefit is payable in a lump sum; or
ii. when all the due amounts of the death benefit have been paid if the death benefit is payable monthly in the form of guaranteed Monthly Annuity Payment and non-guaranteed Monthly Annuity Payment (if any); - you do not pay the premium within 31 days (or 365 days under Unemployment Benefit) of the due date and the sum of guaranteed cash value and any accumulated Monthly Annuity Payment with interest of the basic plan less any outstanding debt is insufficient to cover the premium in default;
- any benefit is paid under the basic plan or an add-on plan that triggers termination of the policy; or
- the outstanding debt exceeds the guaranteed cash value of the policy. Where the premium is covered by a loan taken out on the policy automatically, the outstanding debt exceeds the sum of guaranteed cash value and any accumulated Monthly Annuity Payment with interest of the basic plan.
5. Credit Risk
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.
6. Exchange Rate and Currency Risk
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.
7. Inflation Risk
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.
Key Exclusions to the Terminal Illness Benefit
No Terminal Illness Benefit will be paid if:
1. the signs or symptoms of the medical condition of the insured first occur or commence on or before 90 days from the issue date of the policy; or
2. any dates of the 12-month period (within which the insured is expected to pass away due to the terminal illness) falls after the end of policy year immediately following the insured’s 85th birthday; or
3. the terminal illness is a pre-existing illness, disease, impairment or condition from which the insured was suffering prior to the policy being issued or being reinstated (if applicable), whichever is later, unless the insured makes a declaration in the application for the policy or in the application for reinstatement of the policy (as applicable), and such application is specifically accepted by us; or
4. the terminal illness is the result of or is related (directly or indirectly) to Acquired Immunodeficiency Syndrome (AIDS) or Human Immunodeficiency Virus (HIV) according to the Company’s opinion; or
5. the terminal illness is due (directly or indirectly) to a congenital defect or disease which manifests or is diagnosed before the insured attains the age of 17; or
6. the terminal illness is the result of self-inflicted injury or injuries; or
7. the terminal illness is the result of any physical or mental condition existing before the policy was issued or being reinstated (if applicable), whichever is later, and which was not disclosed in any application or in any health statement relating to the policy before the commencement of cover or reinstatement of the policy (as applicable).
The above list is for reference only. Please refer to the policy contract of this plan for the complete list and details of exclusions.
Note for Unemployment Benefit
You must be employed under a continuous contract for not less than 24 months and be eligible for a severance payment upon termination under the employment or labour laws of Hong Kong prior to the involuntary unemployment. Further, such employment cannot be self-employment, employment by a family member (including spouse, parent, grandparent, child or grandchild) or employment as a domestic servant. The Unemployment Benefit starts on the premium due date at the time when we approve your claim and continues for up to 365 days. Proof of continuous unemployment is required by you upon our request. The Unemployment Benefit is not available if you were informed of your pending involuntary unemployment on or before the issue date or commencement date of the policy, whichever is later. The Unemployment Benefit will cease on the earliest of the following dates: (i) at the end of extended grace period, (ii) you fail to provide proof of continuous unemployment upon our request, (iii) the date on which the policy owner has been changed, (iv) the date on which any claims on waiver of premium under your basic plan is approved, (v) at the end of premium payment term of your basic plan, (vi) the date when any claims of your basic plan and/ or add-on plans is made, if the premium payment mode is not changed to monthly, (vii) the date when you pay all outstanding premiums and (viii) termination date of your basic policy. Claim for Unemployment Benefit must be submitted within 30 days of your involuntary unemployment. The Unemployment Benefit could only be claimed once per policy and relevant proof is required. Please note that, during application of tax deduction, deductible amount should be qualifying annuity premiums paid, delay of premium payments may affect the tax deductions. For details on tax deductions, please visit the website of Inland Revenue Department (IRD) of HKSAR or contact IRD for tax related enquiries. You can also consult your tax and accounting advisors for tax advice. The approval of the Unemployment Benefit is subject to our prevailing rules and regulations, and the handling of policy during the extended grace period will be subject to our discretion.
Tax Implication of Qualifying Deferred Annuity Policy (QDAP)
Please note that the qualifying deferred annuity policy (QDAP) status of this product does not necessarily mean you are eligible for the tax deduction available for QDAP premiums paid. This product’s QDAP status is based on the features of the product as well as certification by the Insurance Authority (IA) and not the facts of your own situation. You must also meet all the eligibility requirements set out under the Inland Revenue Ordinance and any guidance issued by the Inland Revenue Department (IRD) of HKSAR before you can claim these tax deductions.
Any general tax information provided is for your reference only, and you should not make any tax-related decisions based on such information alone. You should always consult with a professional tax advisor if you have any doubts. Please note that tax law, regulations or interpretations are subject to change and may affect related tax benefits including the eligibility criteria for tax deduction. We do not take any responsibility to inform you about any changes in the laws regulations or interpretations, and how they may affect you. Further information may be found in IA’s website at www.ia.org.hk.
Please note that under this plan, the policyholders / policy owners can be aged 65 or above and who may be retirees. Such persons will not be subject to salary tax or tax under personal assessment in Hong Kong and will therefore not be eligible for tax deduction benefits.
Certification by Insurance Authority (IA)
The IA certification is not a recommendation or endorsement of the policy nor does it guarantee the commercial merits of the policy or its performance. It does not mean the policy is suitable for all policyholders / policy owners nor is it an endorsement of its suitability for any particular policyholder / policy owner or class of policyholders / policy owners. The policy has been certified by the IA but such certification does not imply official recommendation. The IA does not take any responsibility for the contents of the product brochure of the policy, makes no representation as to its accuracy or completeness, expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of the product brochure of the policy.
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 or non-payment of premiums, 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. This provision does not apply to any add-on plan providing accident, hospitalisation or disability benefits.
Warning Statement and Cancellation Right
Effective from 1 January 2018, all policy owners are required to pay a levy on each premium payment made for both new and in-force Hong Kong policies to the Insurance Authority (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.
- 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.
- 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. non-guaranteed monthly annuity payment, terminal dividend, interests) presented in the material 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 till the end of the policy 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. If you fail to pay the premium for the whole of the premium payment term, this will cause the policy to lapse or to be terminated earlier than the original policy term, and the total surrender value (if any) that get back by you may be less than the total premiums paid.
2. Risk from surrender – if you cancel the policy before the end of the policy 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 dividend scale – non-guaranteed benefits are based on the dividend scale 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 terminal dividend and non-guaranteed monthly annuity payment you will receive. Under some circumstances, the non-guaranteed benefits may be zero.