Hello !
I have a saving plan from AIA Berhad to share with you all. It is called ExcelPay 20. It covers death and disability. This plan is going to be withdrawn from the insurance market on 20 March 2009. It is a good plan. Then, why does AIA still want to withdraw it from the market? After reading the following illustration, then you will know why.
Let say, person A is 35 years old, male, non-smoker and he is an auditor. He buys the plan with sum assured of RM 100,000. Based on the AIA Sales Illustration System (SIS), he will get the following benefits, either guaranteed or not guaranteed.
a) Guaranteed Part
1) The annual premium is RM 9,446. The monthly premium is RM 822.
2) He needs to pay 20 years premium only.
3) After the end of policy year 2, he will get RM 5,000 (5 % of RM 100,000).
4) After the end of policy year 4, he will get RM 5,000 (5 % of RM 100,000).
5) After the end of policy year 6, he will get RM 10,000 (10 % of RM 100,000).
6) After the end of policy year 8, he will get RM 10,000 (10 % of RM 100,000).
7) After the end of policy year 10, he will get RM 10,000 (10 % of RM 100,000).
8) After the end of policy year 12, he will get RM 10,000 (10 % of RM 100,000).
9) After the end of policy year 14, he will get RM 10,000 (10 % of RM 100,000).
10) After the end of policy year 16, he will get RM 10,000 (10 % of RM 100,000).
11) After the end of policy year 18, he will get RM 10,000 (10 % of RM 100,000).
12) After the end of policy year 20, he will get RM 50,000 (50 % of RM 100,000).
b) Not Guaranteed Part
1) After 20 years, the plan will automatically be terminated by AIA and he will get from RM 114,171 to RM 152,216 (total surrender value), depending on how well AIA performs in 20 years. If the performance is very good, an annual bonus of 7 % will be given to policyholders. If the performance is very bad, an annual bonus of 4 % will be paid to policyholders.
2) Minimum death and disability benefit is RM 100,000. It will increase from time to time, depending on the performance of AIA. If the performance is very good, an annual bonus of 7 % will be given to policyholders. If the performance is very bad, an annual bonus of 4 % will be paid to policyholders.
Why is it so special that AIA wants to withdraw it from the market?
1) He will get RM 130,000 (130 % RM 100,000) after 20 years (guaranteed).
2) Even he has received some of the guaranteed cash payment payout, his coverage is still RM 100,000 and it will increase from time to time, depending on the performance of AIA. If the performance is very good, an annual bonus of 7 % will be given to policyholders. If the performance is very bad, an annual bonus of 4 % will be paid to policyholders. 4 % is still higher than the rate of FD we save in a bank for one year.
3) Does the guaranteed cash payment payout percentage of 5 % really mean 5 %? No. Why? After he saves two years premium (RM 9,446 x 2 = RM 18,892) in AIA, he will get RM 5,000. So, the guaranteed return is around 26.47 % (5,000/18,892) for two years. If he saves RM 9,446 in the first year and another RM 9,446 in the second year in a bank in FD, what he gets after two years is just around RM 858.64 (RM 9,446 x 1.03 x 1.03 + RM 9,446 x 1.03) (assume 3 % per year and compound interest) and he gets no coverage at all.
4) He can spend while saving. How? He can spend the guaranteed cash payment payout to travel abroad once every two years. Or he can save it in banks to earn FD rate. Or he can save it in AIA to receive a higher total surrender value at the end of 20th year. Or he can invest it in unit trusts and shares.
For those who are interested to know more, please pm me or contact me via [email protected] or call me. I only give me handphone number to those who email me.
Please read my blog if you want to know more about insurance: http://lokeaiaberhad.blogspot.com
Thanks...
I have a saving plan from AIA Berhad to share with you all. It is called ExcelPay 20. It covers death and disability. This plan is going to be withdrawn from the insurance market on 20 March 2009. It is a good plan. Then, why does AIA still want to withdraw it from the market? After reading the following illustration, then you will know why.
Let say, person A is 35 years old, male, non-smoker and he is an auditor. He buys the plan with sum assured of RM 100,000. Based on the AIA Sales Illustration System (SIS), he will get the following benefits, either guaranteed or not guaranteed.
a) Guaranteed Part
1) The annual premium is RM 9,446. The monthly premium is RM 822.
2) He needs to pay 20 years premium only.
3) After the end of policy year 2, he will get RM 5,000 (5 % of RM 100,000).
4) After the end of policy year 4, he will get RM 5,000 (5 % of RM 100,000).
5) After the end of policy year 6, he will get RM 10,000 (10 % of RM 100,000).
6) After the end of policy year 8, he will get RM 10,000 (10 % of RM 100,000).
7) After the end of policy year 10, he will get RM 10,000 (10 % of RM 100,000).
8) After the end of policy year 12, he will get RM 10,000 (10 % of RM 100,000).
9) After the end of policy year 14, he will get RM 10,000 (10 % of RM 100,000).
10) After the end of policy year 16, he will get RM 10,000 (10 % of RM 100,000).
11) After the end of policy year 18, he will get RM 10,000 (10 % of RM 100,000).
12) After the end of policy year 20, he will get RM 50,000 (50 % of RM 100,000).
b) Not Guaranteed Part
1) After 20 years, the plan will automatically be terminated by AIA and he will get from RM 114,171 to RM 152,216 (total surrender value), depending on how well AIA performs in 20 years. If the performance is very good, an annual bonus of 7 % will be given to policyholders. If the performance is very bad, an annual bonus of 4 % will be paid to policyholders.
2) Minimum death and disability benefit is RM 100,000. It will increase from time to time, depending on the performance of AIA. If the performance is very good, an annual bonus of 7 % will be given to policyholders. If the performance is very bad, an annual bonus of 4 % will be paid to policyholders.
Why is it so special that AIA wants to withdraw it from the market?
1) He will get RM 130,000 (130 % RM 100,000) after 20 years (guaranteed).
2) Even he has received some of the guaranteed cash payment payout, his coverage is still RM 100,000 and it will increase from time to time, depending on the performance of AIA. If the performance is very good, an annual bonus of 7 % will be given to policyholders. If the performance is very bad, an annual bonus of 4 % will be paid to policyholders. 4 % is still higher than the rate of FD we save in a bank for one year.
3) Does the guaranteed cash payment payout percentage of 5 % really mean 5 %? No. Why? After he saves two years premium (RM 9,446 x 2 = RM 18,892) in AIA, he will get RM 5,000. So, the guaranteed return is around 26.47 % (5,000/18,892) for two years. If he saves RM 9,446 in the first year and another RM 9,446 in the second year in a bank in FD, what he gets after two years is just around RM 858.64 (RM 9,446 x 1.03 x 1.03 + RM 9,446 x 1.03) (assume 3 % per year and compound interest) and he gets no coverage at all.
4) He can spend while saving. How? He can spend the guaranteed cash payment payout to travel abroad once every two years. Or he can save it in banks to earn FD rate. Or he can save it in AIA to receive a higher total surrender value at the end of 20th year. Or he can invest it in unit trusts and shares.
For those who are interested to know more, please pm me or contact me via [email protected] or call me. I only give me handphone number to those who email me.
Please read my blog if you want to know more about insurance: http://lokeaiaberhad.blogspot.com
Thanks...
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