News releases | Sun Life Hong Kong

Sun Life Launches Qualifying Deferred Annuity Policy

***Flexible product design with up to 56 combinations to cater for different retirement needs***
***8% premium rebate on Annualized First Year Premium
within the promotion period***

Hong Kong, September 2, 2019 - Sun Life Hong Kong Limited (“Sun Life” or “the Company”) today announced the launch of the Foresight Deferred Annuity Plan. The plan is certified as a Qualifying Deferred Annuity Policy (“QDAP”) by the Insurance Authority (“IA”)¹, and the customized features of the product also provide a steady income stream for retirement.  From now until September 30, 2019, eligible clients of Foresight Deferred Annuity Plan can enjoy a 5% premium rebate on Annualized First Year Premium (“AFYP”) and a 3% of AFYP early bird additional premium rebate² upon successful application.

Three distinct features of the Foresight Deferred Annuity Plan enable clients to embrace a stable retirement life:

1. Stable income stream

Foresight Deferred Annuity Plan offers a monthly stream of income throughout the Annuity Period, called the Monthly Annuity Payment. This includes the Guaranteed Monthly Annuity Payment plus the Non-guaranteed Monthly Annuity Payment³ (if any).

For example, based on a male non-smoker aged 45, assuming a 10-year term of premium payments and an Annuity Start Age of 60 with a 20-year Annuity Period, the guaranteed internal rate of return (“guaranteed IRR”) per annum of the Foresight Deferred Annuity Plan could reach 2.32%⁴, while the total Guaranteed Monthly Annuity Payment could make up at least 60% of the total Monthly Annuity Payment. If the Annuity Period is until age 100 in this case, the guaranteed IRR per annum could even rise to 2.56%⁴, with the total Guaranteed Monthly Annuity Payment accounting for at least 50% of the total Monthly Annuity Payment.

For a 45-year-old male non-smoker, the total internal rate of return (“total IRR”) per annum of the Foresight Deferred Annuity Plan could reach as high as 4.34%⁵.

2. Wide choices to fit different retirement needs

Foresight Deferred Annuity Plan can be issued at the minimum issue age of 18, or up to age 65. There is a wide range of options across premium payment term, Annuity Start Age and Annuity Period, giving clients the flexibility to fulfill their life goals and plan for their ideal retirement lifestyle. Taking the Annuity Start Age as an example, clients can choose to receive their Monthly Annuity Payment starting from age 50, 55, 60, 65, 70, 75 or 80 ^6,7. For the Annuity Period, the shortest period option is 10 years while clients can also choose to receive it until they reach age 100⁶.

Betty Lee, Chief Product Officer, Life and Health, Sun Life Hong Kong Limited, said: “The Foresight Deferred Annuity Plan offers a variety of options in terms of premium payment term, Annuity Start Age and Annuity Period. Such offerings are rare in Hong Kong's QDAP market. The mix-and-match approach enabled by these three categories can provide up to 56 combinations catering to clients’ different needs in retirement. Retirement lifestyles are changing in today’s evolving society, as some people wish to retire earlier while others do not mind delaying retirement; it no longer has a standard age. In view of market demand, the Foresight Deferred Annuity Plan is designed with excellent flexibility to address Hong Kong people’s modern retirement needs.”

3. Increasing or level Non-guaranteed Monthly Annuity Payment to safeguard retirement income

A Non-guaranteed Monthly Annuity Payment³ (if any), which is funded by an accumulated Reversionary Bonus, is not common in Hong Kong’s QDAP market. Under the Foresight Deferred Annuity Plan, the Reversionary Bonus (if any) will be declared and credited to the policy at least annually starting from the 3^rd policy anniversary. Once the Reversionary Bonus is declared, it becomes guaranteed and accumulates in the policy. As a result, the Non-guaranteed Monthly Annuity Payment that is funded by the accumulated Reversionary Bonus will increase or level but not decrease from the amount of the previous policy year. This differs from those funded by a terminal dividend under other QDAPs in the market, which when declared are not equivalent to guaranteed, meaning the Non-guaranteed Monthly Annuity Payment can vary from year to year, implying potentially greater inherent volatility.

Lee continued, “Many Hong Kong people aim for a carefree retirement life but, as life expectancy increases, the pressure of inflation inevitably poses challenges to the living expenses of retirees. To give our clients peace of mind and provide them with a more stable and foreseeable income, the Foresight Deferred Annuity Plan uses an accumulated Reversionary Bonus to support the Non-guaranteed Monthly Annuity Payment, instead of the more common offer of a terminal dividend. This also further helps our clients to mitigate the impacts of ongoing inflation.”

END

About Sun Life

Sun Life is a leading international financial services organization providing insurance, wealth and asset management solutions to individual and corporate Clients. Sun Life has operations in a number of markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of June 30, 2019, Sun Life had total assets under management of CAD$1,025 billion. For more information please visit www.sunlife.com.
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF. Sun Life Financial Inc. is the holding company of Sun Life Assurance Company of Canada. Sun Life Hong Kong Limited is a wholly-owned subsidiary of Sun Life Assurance Company of Canada and operates in Hong Kong.

Note to editors

1. Tax deduction under salaries tax and personal assessment from premiums paid under the Foresight Deferred Annuity Plan is subject to the prevailing tax law of Hong Kong and individual circumstances. Clients shall contact the Inland Revenue Department of Hong Kong for details and major risk factors or seek professional advice.
2. This offer is only applicable to successful application(s) of the Foresight Deferred Annuity Plan which meet the minimum AFYP as stated below. From now until October 31, 2019, eligible application(s) can enjoy a 5% premium rebate on AFYP. Eligible application(s) received by the Company by September 30, 2019, and issued by the Company on or before October 31, 2019, can enjoy an early bird additional premium rebate of 3% on AFYP. To enjoy the offer, clients must fulfill certain other requirements. This offer is subject to the related terms and conditions. Please contact financial advisors or refer to promotion leaflet for details and risk disclosure.

3. The Non-guaranteed Monthly Annuity Payment is determined and payable based on the accumulated Reversionary Bonus. The Non-guaranteed Monthly Annuity Payment as well as the Reversionary Bonus are non-guaranteed and are subject to change from time to time at the sole discretion of Sun Life Hong Kong Limited (“Sun Life”). They may vary based on the performance of a number of experience factors, with the investment return normally being the main determinant. Other factors include, but are not limited to, claim experience, policy expenses, taxes, and Policy Owner termination experience. If there is any change to Reversionary Bonus and Non-guaranteed Monthly Annuity Payment, total IRR will be affected. Under this plan, withdrawal of any cash value of accumulated Reversionary Bonus is only allowed after the end of premium payment term. After the end of premium payment term, such withdrawal will decrease the face value and cash value of the accumulated Reversionary Bonus, and the future Non-guaranteed Monthly Annuity Payment.
4. This example is for illustrative purpose only and to indicate the guaranteed IRR per annum at policy maturity or when the male in this case passes away at the end of the 30^th policy year since Annuity Period starts, whichever is earlier. The guaranteed IRR per annum is calculated based on assumption that (1) he pays premiums in full when due; (2) he receives full Monthly Annuity Payment monthly during Annuity Period or for 30 years, whichever is shorter; (3) he does not have cash withdrawal or loans throughout the benefit term. The calculation of guaranteed IRR includes premiums paid for the basic plan, Guaranteed Monthly Annuity Payment and Guaranteed Cash Value or Guaranteed Death Benefit (if applicable).
5. This example is for illustrative purpose only and to indicate the total IRR per annum at policy maturity or when the male in this case passes away at the end of the 30^th policy year since Annuity Period starts, whichever is earlier. The total IRR per annum is calculated based on assumption that (1) he pays premiums in full when due; (2) he receives full Monthly Annuity Payment monthly during Annuity Period or for 30 years, whichever is shorter; (3) he does not have cash withdrawal or loans throughout the benefit term. The calculation of total IRR includes premiums paid for the basic plan, Monthly Annuity Payment, Guaranteed Cash Value or Guaranteed Death Benefit (if applicable) and the cash value or face value (if applicable) of accumulated Reversionary Bonus (if any). The total IRR is not guaranteed and will be affected by any changes in Reversionary Bonus and Non-guaranteed Monthly Annuity Payment. The actual total IRR may be higher or lower than the illustrated figures.
6. Annuity Start Age and Annuity Period cannot be changed once the policy is issued.
7. Provided that premiums have accumulated for a period between 10 and 50 years.

This press release is intended to be distributed in Hong Kong only and shall not be construed as an offer to sell or a solicitation to buy or provision of any products of Sun Life Hong Kong Limited outside Hong Kong. Please refer to a sample Policy Document, which will be provided upon request, for details including definitions and full terms and conditions. If there is any conflict between the Policy Document and this press release, the Policy Document shall prevail.