Income Wealth Plus Solitaire - Isaac Fang CFA, ChFC, CFP
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Income Wealth Plus Solitaire is clearly for those with lump sum investable cash and a mind set on legacy planning. What stands out of late is the secondary life insured option. Perhaps this blogpost should highlight the interesting feature – Secondary Insured.

Mr Prospect, age 40, signs up for Wealth Plus Solitaire with a single premium of $1 million and appoints his 5 year-old son, Sonny, as the secondary insured.

From the end of the 4th policy year, the policy begins to pay monthly cash payouts (elected, alternative option to payout is to leave to accumulate with insurer) of $3,125 (This figure is not guaranteed and assumes the Life Participating Fund earns a long term average return of 4.25% per annum in the future). Mr Prospect chooses to receive the monthly cash payouts to support his family’s lifestyle.

Mr Prospect passes away at age 70 and the policy continues until the anniversary immediately after his 120th birthday with Sonny becoming the insured. The monthly cash payouts will continue to be paid until the policy matures when Sonny turns 85 (120 – 40 = 80, and 80 + 5 = 85) and the policy will pay an illustrated maturity benefit⁶ of $1,520,000 (Again, assuming Life Participating Fund earns a long term average return of 4.25% per annum in the future).

Should the long-term average return be 3.00% p.a., the total illustrated monthly cash payout would be $1,920 (the non-guaranteed monthly cash bonus would be $1,200), the illustrated maturity benefit is $1,360,000 and the total illustrated monthly cash payouts paid during the policy term is $1,751,040.

It can be inferred that such a setup, the guaranteed monthly cash payout sits at $1,920 – $1,200 = $720.

Note on the secondary insured, only yourself (policyholder before the age of 65 years old), your spouse (before the age of 65 years old), or your child or ward (before the age of 18 years old) can be the secondary insured at the time of exercising this option. You can exercise this option to appoint a secondary insured no more than three times, and provided the following conditions are met:

  • The premium of this policy is paid only with cash;
  • No nomination of beneficiary has been made for this policy; and
  • There is no change to the ownership of this policy including assignment, bankruptcy and trust.

The secondary insured becomes the insured of this policy only upon death of the insured for the remaining policy term. The policy can only have one insured at any point of time.

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Some things to note. This post will get dated. And the product might not be available for new subscriptions at some point. Hopefully this serves as reference for future policyholders who have forgotten what they have taken up.

Income Wealth Plus Solitaire may or may not fit into your financial plans. Understand that there is no best plan for all time, but there is a method to objectively facilitate your decisions. Read more about it here.

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