Historical Crediting Interest Rate of Universal Life Policies

Historical Crediting Interest Rate of Universal Life Policies

For universal life insurance business, the asset portfolio is constructed to support the crediting interest rate for the policy. It also allows policy owners to receive a share of profits attributable to the universal life insurance business of our company by means of crediting of interest. To accomplish the purpose, we invest in a wide range of asset portfolios that are prudently chosen by our company to balance the risk. In general, the asset portfolios mainly consist of fixed income investment securities and equity investments.

The actual crediting interest rate is determined by the stipulated approach in our company’s policy, which is based on a number of factors, including but not limited to, market conditions, actual investment return in the past and long-term expectation of investment return in the future. Future crediting interest rate may vary from time to time over the policy term, but will not be less than the minimum crediting interest rate as specified in the policy provisions, endorsements and/ or amendments. The actual crediting interest rate is recommended by our Appointed Actuary according to the aforementioned company’s policy and approved by the Board of Directors of our company.

In light of the above factors, crediting interest rate is not guaranteed and may be higher or lower than the values illustrated in the benefit illustration provided at point of sale.

In calculating the crediting interest rates for each calendar year for each product, all relevant inforce policies in that calendar year (which may be in different policy years) are included. The crediting interest rate is calculated as an average weighted by account balances of all the relevant inforce policies for the same product.

Where the crediting interest rates are declared more than once in a calendar year, a time-weighted crediting interest rate for such policy is used in the calculation.

The following are historical crediting interest rates of products series.

Notes:

1.    The products shown are those which (a) it has issued new policies since 2010, and (b) it still has policies inforce in the reporting year. For the avoidance of doubt, products that were launched after the reporting year are excluded.

2.    The historical crediting interest rates shown are calculated before applying any relevant policy charges (e.g. cost of insurance, policy fee etc.).

3.    Some of the above results are shown as “N/A” because 
(i)    the corresponding product and/or policy currencies were not yet available in the relevant calendar year or
(ii)    there are no relevant in-force policies in the reporting year

4.    Unless otherwise specified, the crediting interest rates shown are calculated based on weighted average of actual crediting interest rates of the policies in each calendar year. Therefore, please refer to your anniversary statement for the actual crediting interest rates applicable to your policy.

5.    They are only historical crediting interest rates and are not an indicator of future declaration of the crediting interest rates.

6.    The future crediting interest rates may be less or more favorable than the historical crediting interest rates, depending on numerous factors such as investment returns and surrenders.

7.    Please note that the prevailing crediting interest rate is subject to change from time to time.