FWD Invest First Summit

FWD Invest First Summit is a regular premium investment-linked plan that offers several key benefits, including attractive bonuses, capped charges, and multiple flexibilities. Review it here to see if it fits into your financial plans.

Table of Contents

Key Feature Benefits of FWD Invest First Summit:

Attractive Bonuses: The plan includes a Booster Bonus of up to 165% of the annualised regular premium over the first three years of premium payment. It also offers a Loyalty Bonus of up to 1.5% per annum of the accumulation units account (AUA) value from the 4th policy year onwards, throughout the premium payment term. Furthermore, there is a Perpetual Bonus of 1% p.a. of the AUA value after the premium payment term, continuing throughout the rest of the policy term. These bonuses can help accelerate investment growth.
Capped Charges: The plan features a dynamic charging structure designed to optimize investment returns. The accumulation account charge is capped at the lower of 1.5% p.a. of the AUA value or 0.7% p.a. of the total regular premium committed at the effective date. This means that as the AUA value grows, the overall policy charge per dollar of policy value reduces.
Multiple Flexibilities: FWD Invest First Summit offers several flexibilities to adapt to changing life needs. These include:
- Penalty-free withdrawals from the 25th policy month onwards.
- The option to adjust regular premium contributions from the 25th policy month onwards.
- The ability to take a break from paying premiums from the 25th policy month.
- Waiver of charges associated with premium reduction and/or non-payment of premiums in the event of redundancy, terminal illness, or total and permanent disability.
- Unlimited free fund switches, allowing changes to the investment portfolio without hesitation.
- A choice of premium payment terms between 10 and 30 years.
Passive Income: The plan allows for the option to generate a stream of passive income through dividend payouts. Policyholders can choose to receive monthly dividends as cash payouts.
Auto-Rebalancing: The plan includes a complimentary auto-rebalancing option to help manage portfolio risk. This service adjusts the investment portfolio to maintain the policyholder’s risk appetite, without the need for constant attention or additional charges.
Access to Curated Funds: The plan provides access to a range of diversified funds from globally established fund managers, allowing policyholders to tap into tactical opportunities arising from changing market conditions.

Important Considerations for FWD Invest First Summit:

Charges: While the accumulation account charge is capped, there are other charges associated with the policy. These include an initial account charge payable throughout the premium payment term, and a premium charge of 5% for each top-up. Additionally, there are potential charges for premium shortfalls, premium reductions, and surrender of the policy before the end of the premium payment term.
Investment Risk: As an investment-linked plan, the value of the units and the income from them may fall or rise. The performance of the funds is not guaranteed, and the policy value may be less than the total premiums paid.
Long-Term Commitment: Buying a life insurance policy is a long-term commitment, and early termination of the policy usually involves high costs. The surrender value payable to the policyholder may be zero or less than the total premiums paid if the policy is terminated early.
Premium Shortfall Charges: If regular premiums are missed continuously for 24 months during the premium payment term, a premium shortfall charge will be imposed on any unpaid premiums due thereafter.
Premium Reduction Charge: If the policyholder reduces their regular premium during the applicable premium reduction charge period, a premium reduction charge will apply.
Policy Lapse: The policy will lapse if the policy value falls below S$1 (or equivalent in the policy currency), or if the policy value is insufficient to pay for fees and charges.
Withdrawal Restrictions: Partial withdrawals can only be made from the Accumulation Units Account (AUA) from the 25th month onwards during the premium payment term. Withdrawals from the Initial Units Account (IUA) are not allowed during the premium payment term. After the premium payment term, withdrawals can be made from both IUA and AUA. There are also minimum withdrawal amounts and minimum account value requirements.
Bonus Terms and Conditions: Bonuses are subject to terms and conditions, as detailed in the policy contract. Booster and Loyalty Bonuses are not payable during a premium holiday.
Dividend Payout Restrictions: During the premium payment term, only dividends from the AUA are paid out. Dividends from the IUA are automatically reinvested into the IUA. The cash-out dividend option is only available for non-corporate policies denominated in SGD currency.

Use Case Example of FWD Invest First Summit:

Alvin purchases an FWD Invest First Summit policy with a monthly premium payment of S$1,000 for 30 years.
His goal is to grow his investments while having the flexibility to adapt to life stage changes.
He receives a Booster Bonus over the first three years of regular premium payments.
He also benefits from Loyalty Bonuses from the end of the 4th policy year, increasing to 1.5% p.a. of AUA (Assets Under Advisory) value from the end of the 11th policy year.
He is entitled to a Perpetual Bonus of 1% p.a. of AUA value from the end of the 31st policy year.
Alvin uses the policy’s flexibility to:
- Take a break from paying premiums for six months from the beginning of one year.
- Reduce his premiums by S$300 at the beginning of the 15th policy year to fund his son’s enrichment classes.
- Make a partial withdrawal of S$5,000 at the end of one year for a mountain-climbing trip.
By the end of the 30th year, the projected surrender value is S$909,845.
By the end of the 40th year, the projected surrender value is S$1,877,689.
This case illustrates how the plan allows policyholders to adapt to changing needs while still benefiting from investment growth.
The projected surrender values are based on an illustrated IRR of 8% p.a., with a 1.30% p.a. fund management fee, all applicable fees and charges, and any promotional bonuses included. The actual benefits payable will depend on the actual performance of the underlying assets of the funds.

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 higher interest rates environment, things have changed.

FWD Invest First Summit 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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