Manulife Signature Legacy Growth

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Manulife

Manulife Signature Legacy Growth (USD) is a whole life plan. Currently available in USD only. This is a high net worth (HNW) product where single premium lump sum or 5yr premium terms are available. Refer to the use case scenario below to review if this might be relevant to your needs.

Some elaborations:

Potential for Higher Returns: This plan aims to generate aggressive investment returns by allocating a higher proportion of the investment portfolio to risky assets. The target allocation for risky assets is 50%, with a range of 30% to 60%. This strategy seeks to optimize investment returns compared to other USD-denominated participating plans.
Policy Continuity Features: The plan offers several features that ensure policy continuity and wealth accumulation, even in unexpected circumstances:
- - Secondary Life Insured Option: Allows nomination of a secondary life insured to continue the policy in case of the original life insured’s death.
  - Unlimited Change of Life Insured: After two years, the policyholder can change the life insured, enabling the policy to continue accumulating wealth.
Access to Cash Value: Policyholders have multiple ways to access their accumulated cash value:
- - Bonus Withdrawal: Full or partial withdrawal of accumulated reversionary bonuses.
  - Decrease Sum Insured: Reducing the sum insured with a payout of the difference in surrender value.
  - Surrender the Policy: Receive the total surrender value, including guaranteed and non-guaranteed components.
Capital Guaranteed: The plan guarantees the capital as early as the end of policy year 7 for single premium plans and policy year 14 for regular premium plans.
Guaranteed First Day Surrender Value: Single Pay plans offer a guaranteed surrender value of at least 80% of the single premium from day one.
Maturity Benefit: Payout of the accumulated value upon survival of the life insured to the maturity date (180 years from policy start date).
Surrender Value Booster Benefit (SVBB): This embedded benefit provides a guaranteed surrender value during the initial policy years, enhancing the policy’s early cash value.
Bonus Features: The plan offers potential for additional returns through:
- - Reversionary Bonus: Annual bonus credited to the policy based on the participating fund’s performance.
  - Claim Bonus: A non-guaranteed bonus payable upon death or terminal illness claim.
  - Surrender Bonus: A non-guaranteed bonus payable upon policy surrender or maturity.
No Medical Examination: Guaranteed issuance with no medical examination required.

Points to take note of:

Non-Guaranteed Bonuses: The claim and surrender bonuses are non-guaranteed and determined at Manulife’s discretion. These bonuses can fluctuate significantly and may even be zero in extreme circumstances. This volatility can impact the death benefit, terminal illness benefit, surrender value, and maturity benefit.
Investment Risk: The plan’s emphasis on risky assets for potentially higher returns exposes it to market volatility. Fluctuations in the performance of these assets can impact the overall returns and the value of the bonuses.
Impact of Bonus Adjustments: Manulife’s adjustments to the claim and surrender bonuses can significantly impact the actual benefits received, potentially deviating from the initial projections and illustrations provided.
Foreign Currency Risk: As a USD-denominated plan, it carries foreign currency risk. Fluctuations in the USD exchange rate can impact the value of the benefits received in the policyholder’s local currency.

Table of Contents

Purely illustrative scenario how the Manulife Signature Legacy Growth (USD) plan might be used:

Year 0 (Policy Inception)

The Investor, a high-net-worth individual (HNW) in Singapore, aged 50, seeks a long-term wealth accumulation and legacy planning solution. They are comfortable with a moderate level of risk and are interested in potential for higher returns offered by investing in USD-denominated assets.

They choose the Signature Legacy Growth (USD) plan with a single premium payment of US$1,000,000. This sets their sum insured at US$1,000,000.

The investor is drawn to the plan’s potential for higher returns, guaranteed issuance without medical underwriting, and features like the secondary life insured option and the ability to change the life insured in the future.

Year 3

The investor considers partially withdrawing some accumulated bonuses to fund a short-term financial need. They request a partial bonus withdrawal. The amount available for withdrawal will depend on the declared reversionary bonuses and any applicable surrender charges.

The investor recognizes that withdrawing bonuses will reduce the future value of their policy, especially the compounding effect of the reversionary bonuses. They carefully weigh this against their immediate financial needs.

Year 5

The investor’s family situation changes. They now have a young grandchild and want to ensure the policy’s benefits continue to be passed down. The investor nominates their grandchild as the secondary life insured.

Upon the investor’s death, the policy will seamlessly transfer to the grandchild, allowing the wealth accumulation to continue uninterrupted. The policy’s maturity date remains unchanged, and premium payments (if applicable) continue.

Year 10

The investor wishes to reallocate their assets and decides to surrender a portion of their Manulife Signature Legacy Growth policy. They submit a request to decrease their sum insured by 20%, reducing it to US$800,000.

Manulife may defer processing the request for up to six months. If the request is approved, the surrender value of the reduced portion is paid out to the investor. Future benefits and premiums (if applicable) are adjusted based on the new sum insured.

Year 20

The investor’s circumstances change, and they require a larger lump sum for a specific financial goal. They decide to fully surrender the policy.

Manulife calculates the total surrender value, including the guaranteed surrender value, surrender value of accumulated reversionary bonuses, and any applicable surrender bonus. The investor receives this amount, less any outstanding policy loans or fees.

Year 180 (Maturity)

If the policy remains in force and the life insured (either the original investor or the nominated secondary life insured) survives to the policy’s maturity date, the maturity benefit is payable.

The policyholder receives the guaranteed surrender value, accumulated reversionary bonus, and any applicable surrender bonus at the maturity date, less any outstanding amounts owed to Manulife.

This scenario highlights several key aspects of the plan:

Flexibility: It demonstrates the options available to policyholders to access cash value, change life insured, and adapt the policy to changing life events.
Long-Term Focus: It underscores the plan’s long-term nature, designed for wealth accumulation and legacy planning across generations.
Potential and Risks: It illustrates both the potential for higher returns through non-guaranteed bonuses and the associated risks of market volatility and adjustments to bonus rates.

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 Legacy Growth (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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