New flexible insurance plan

PHOTO: New flexible insurance plan

SINGAPORE - Financial services group Manulife says it has come up with a new whole-life product.

It offers a guaranteed payout of up to three times the sum insured that the consumer selects, in the event of death, terminal illness, or total and permanent disability.

Manulife said this whole-life plan offers consumers a choice of the "minimum protection benefit" factor of one, two or three times the selected sum insured.

Other plans in the market give a fixed multiplier factor, it said. For some other plans, the multiplier factor changes depending on the age you purchase the plan, or the flexibility you get is for premium payout terms.

Mr Hitesh Shah, chief marketing officer at Manulife Singapore, said the product is designed in such a manner because "the feedback from consumers says they want a mix of protection and savings".

Take a 35-year-old, male non-smoker who wants to get the highest protection at the lowest cost. He can choose a sum insured, to age 99, of $100,000.

Wanting the highest protection would mean three times the selected sum insured, so that the minimum protection benefit, to age 70, will be $300,000. With a 20-year payment term for his premiums, his annual premium will be $2,926.

At age 65, his total death benefit will be $300,000, and the total cash surrender value - the amount of money he gets back when he surrenders the policy - will be $95,927.

The total death benefit and cash surrender value are projected at a 4.75 per cent investment rate.

If the same customer wanted the same minimum protection benefit of $300,000 but a bigger sum of money when he surrenders the policy at age 65, the product will be tweaked.

His plan will have a higher sum insured at $300,000, and the annual premium will be $7,246 for 20 years. At 65, he will see a bigger total death benefit of $559,042 which includes bonuses, and a total cash surrender value of $295,185.

Mr Shah said: "Roughly 25 per cent of the business comes from coverage for kids, so there's quite a big market from that side."

The other big potential market is people aged in their 40s, he added. "There's a gap in there, we expect significant volumes to come from that space."

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