Manulife Signature Income

Manulife Signature Income III (SGD/USD) a life insurance plan designed to create a lasting legacy. The plan offers guaranteed and non-guaranteed monthly income up to age 120. The plan offers a one-time premium payment, and flexible options for premium currency and payout timing.

Flexibility includes the following:

Option to receive monthly income in SGD (Signature Income (III) SGD), or USD (Signature Income (III) USD)
Option to receive monthly income starting from the 37th or 49th policy monthiversary
Option to accumulate monthly income to earn a non-guaranteed interest
Option to withdraw all or part of the accumulated income
Option to transfer of policy ownership via policy assignment as a gift to loved ones or next generation
Option to change life insured to pass your legacy to future generations
Option to change life insured to ensure the policy continues upon change in keyman

Some elaborations:

● Monthly Payouts: The plan offers guaranteed and non-guaranteed monthly income until the age of 120 or policy termination. You can choose to receive these payouts from either the 37th or 49th policy month.

● Lump-Sum Payment: The plan requires a single premium payment to provide lifetime coverage for death and terminal illness until age 120.

● Currency Flexibility: You can pay your premium in either SGD or USD.

● Guaranteed Surrender Value: From the first day, the policy guarantees a surrender value of at least 80% of the single premium paid.

● Change of Life Insured Option: After two years from the policy issuance date, you can request to change the insured person, subject to Manulife’s approval and the new insured’s insurability. This applies to both corporate and individual-owned policies in SGD, and corporate-owned policies in USD.

● Simplified Application: The plan offers guaranteed acceptance without requiring a health check.

● Accumulation Option: You can choose to accumulate your monthly income payouts with Manulife, earning interest at the prevailing rate, which is subject to change with 30 days’ notice.

Take note though:

● Insurable Interest: For changing the life insured, the policy owner must have an insurable interest in the new life insured at the time of change. This generally means having a financial or close personal relationship where you would suffer a financial loss if the insured person passed away.

Purely illustrative Scenario:

A high-net-worth individual, Mr. Raymond Tan, aged 40, wants to plan for his retirement and create a source of passive income for himself and his loved ones.

Timeline:

December 25, 2024: Mr. Tan purchases the Signature Income (III) SGD plan with a single premium of S$1,000,000.
January 25, 2027 (37th policy monthiversary): Mr. Tan starts receiving monthly income payouts. He can choose to receive the income directly or have it accumulated with Manulife at a non-guaranteed interest rate.
Monthly income until age 120: Mr. Tan receives a combination of guaranteed ($1034) and non-guaranteed monthly income ($1968), providing him with a steady stream of passive income. <Assuming 4.25% insurer investment rate of return>
Death Benefit: Upon Mr. Tan’s death (before age 120), his beneficiary receives a death benefit of 105% of the single premium, plus any non-guaranteed claim bonus and accumulated income with interest.
Maturity Benefit: If Mr. Tan lives past age 120, he receives the maturity benefit, including the guaranteed surrender value, non-guaranteed maturity bonus, final monthly income, and accumulated income with interest.

Some things to note. This review 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.

There can be shifts in planning narratives over time. For example, limited premium tenures gain popularity over the years because people are less confident of their future earning capacity or sustainability of income levels. Regular payout features gained popularity when more and more people are in tune with the FIRE (Financial independence retire early) movement. An extended period of low interest rates brought down insurance products’ returns yield for policy holders, but now in a rising interest rates environment, things are set to change.

Manulife Signature Income III (SGD/USD) 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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