Tokio Marine Wealth@Future

Key Feature Benefits of Tokio Marine Wealth@Future:

Flexibility:
- Policyholders can choose their preferred premium amount.
- There is a wide range of curated investment funds to choose from.
- Policyholders can manage dividend distributions or reinvest them.
- The plan offers flexibility to withdraw from the policy and increase investment via top-up premiums or recurring single premiums after one year.
- Fund switching and currency choices are also available.
Initial Bonus: The plan accelerates investment with an Initial Bonus to boost the investment. The bonus can be up to 50% of the annualised regular premium over the first two policy years.
- The bonus is credited upon receipt of each regular premium, provided the policy is in force and all regular premiums due are received.
- The bonus is allocated to the Accumulation Unit Account (AUA) in the form of additional units.
No Policy Charges After Minimum Investment Period (MIP): There are no policy charges after the 10-year minimum investment period, allowing for unrestricted investment growth.
Death Benefit:
- The policyholder can select either Basic or Advanced Death Benefit upon application.
- The Advanced Death Benefit provides a capital guarantee during the Minimum Investment Period. If the life assured dies before the end of the MIP, the death benefit will be the higher of 101% of the Accumulation Units Account Value or the total amount of regular premiums paid less any partial withdrawals from the AUA, plus 100% of the Top-up Units Account Value (TUA) less indebtedness.
- After the MIP, only the Basic Death Benefit will be paid, which is 101% of the AUA value plus 100% of the TUA value less indebtedness.
Life Replacement Option: The plan allows for the removal, addition, or change of the life assured, providing flexibility for wealth transfer to future generations.
Multiple Life Assureds: Up to four life assureds can be added to a single policy.
Optional Riders: The policyholder has access to a range of optional protection riders for added protection against unfortunate events.
Premium Allocation: 100% of regular premiums are used to purchase units.
Recurring Single Premium (RSP) and Top-up Premium: These are allocated to a separate Top-up Units Account (TUA). There is an up-front premium charge for RSP and top-up premiums.
No Medical Underwriting: Generally, no medical underwriting is required for the basic plan.
Dividend Payouts: Policyholders can choose to receive dividend payouts from dividend-paying funds after the first three years or reinvest them for growth.
Currencies: Up to 5 currencies can be used for investment: SGD, AUD, GBP, EUR & USD.
Simplified Product Structure: The plan is designed with a simplified structure optimized for wealth accumulation.
No fund switching charge

Tokio Marine Wealth@Future has the following pointers to take note of:

Minimum Investment Period (MIP): The plan has a 10-year MIP.
Charges During MIP:
- Policy Charge: A monthly policy charge is applicable during the MIP.
- Premium Shortfall Charge: This applies if the policyholder reduces or misses regular premium payments during policy years 3 to 10.
- Partial Withdrawal Charge: Applies to partial withdrawals from the AUA during policy years 3 to 10.
- Surrender Charge: A surrender charge is levied if the policy is fully surrendered before the end of the MIP. The surrender charge % decreases each year of the policy from 100% in year 1 and 2 to 3% in year 10.
- RSP and Top-up Premium Charge: These have an up-front charge of 5%, though this can be reduced by the advisor.
Premium Payment: Regular premiums must be paid throughout the policy term. The policy will auto-terminate if regular premiums are not received after a grace period during the first 24 months.
Premium Holiday: While premium holidays are allowed after the first two policy years, a premium shortfall charge will apply.
Partial Withdrawal Restrictions: Partial withdrawals are not allowed in the first two policy years.
Not Suitable for Guaranteed Returns: The plan is not suitable for individuals seeking guaranteed returns.
Not Suitable for Single Premium Plan: This plan is not a single premium plan.
Not Suitable for High Insurance Coverage: This plan is not designed for high insurance coverage.
Investment Risk: Investments in the plan are subject to investment risks including the possible loss of the principal amount invested. The value of the units may rise as well as fall. Past performance is not necessarily indicative of future performance and the performance of the ILP sub-fund(s) is non-guaranteed.
Credit Card Charges: There is a 1.60% charge for premiums paid by credit card, although this is waived for the first premium payment. A charge of 1.60% will be imposed on each premium payment made by credit card to cover the charges imposed by the issuing credit card company.
Policy Lapse: The policy will lapse if there is insufficient policy value to cover fees and charges.
Surrender Value: An early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid.
Premium Shortfall Charge: A premium shortfall charge will be imposed when the policy goes on premium holiday or when the annualised regular premium is reduced during the premium shortfall charge period.
Optional Advisory Service Fee (OASF): There is an option to impose an OASF ranging from 0% to 1% per annum. This fee is separate from the fees and charges of the basic plan and is a fee for the service that the advisor will deliver to their clients. The OASF is a fee agreed upon between clients and their advisors. It is not part of the base plan’s fees and charges, but rather a fee for the service that the advisor provides to their clients. The OASF can be determined at the proposal stage or after the policy is incepted, and it must be enacted through an OASF form. The default OASF is 0%.
Fund Management Charge: The level of the fund management charge depends on the chosen investment fund and is deducted on a daily basis from each investment fund. The fund management fee is non-guaranteed.

Use case study example of Tokio Marine Wealth@Future:

Let’s consider a 35-year-old individual, Alex, who is looking for a flexible investment plan with some insurance coverage for their family and for long-term wealth accumulation. Alex is also interested in the possibility of passing on wealth to future generations.

Goals:

Long-Term Investment: Alex wants to invest for the long term to accumulate wealth.
Flexibility: They want the flexibility to adjust their investment strategy, make withdrawals, and add to their investments over time.
Life Coverage: Alex desires some life insurance coverage for their family.
Legacy Planning: Alex wants to ensure their wealth can be passed on to their children in the future.

Wealth@Future Solution:

Policy Setup:
- Alex chooses the Wealth@Future plan due to its investment-linked nature and flexibility.
- They opt for a regular premium payment plan to align with their income.
- Alex selects the Advanced Death Benefit option to ensure capital guarantee during the 10-year Minimum Investment Period (MIP).
- They also add a Payer Benefit Rider to waive future premiums if they experience total and permanent disability.
- Alex decides to invest in a mix of curated funds to match their risk preference.
- Alex chooses to pay premiums monthly for easier budgeting and opts for GIRO as the payment method.
Initial Investment and Bonus:
- Alex commits to an annual regular premium of $24,000, which falls into Band 3, and they receive an initial bonus of 21% of each regular premium received in the first two policy years, boosting their initial investment.
- This means for every $2,000 monthly premium they pay, an additional $420 is allocated into their Accumulation Unit Account (AUA) in the first two policy years.
- This bonus helps accelerate their wealth accumulation from the beginning.
Investment Growth Phase:
- During the first 10 years, the policy accumulates value within the chosen investment funds, and the monthly policy charge is applied to the Accumulation Unit Account (AUA).
- After 1 year from the policy inception, Alex decides to add to the investment with a top-up premium of $5,000. This goes into the Top-up Units Account (TUA) and is subject to a 5% top-up premium charge, but the advisor offers to reduce this charge.
- Alex continues to pay their monthly premiums consistently and is aware that if they miss payments within the first two years, the policy would be terminated.
Flexibility and Adjustments:
- After the 3rd year, Alex’s financial situation changes and they want to reduce their regular premium to $12,000, which falls into Band 2. Since this is after the first two policy years, it is allowed, but they must pay a premium shortfall charge.
- In the 5th policy year, Alex decides to partially withdraw $10,000 from their AUA to fund a home renovation. This is subject to a partial withdrawal charge of 50% because it is within the MIP. The remaining amount, after the charge, will be paid to Alex.
- In the 8th year, Alex uses the fund switching option to rebalance their portfolio without any charges.
Post-Minimum Investment Period (MIP):
- After the 10-year MIP, the policy charge is removed, allowing the investment to grow without further policy charges.
- The policy now has a basic death benefit, which is 101% of the AUA plus 100% of the TUA, less any indebtedness.
- Alex now has the option to make regular withdrawals for additional income, or can leave the policy to continue to grow.
- They choose to receive dividends in cash from the dividend-paying funds, as they have been paid after the first three years, providing a passive income stream.
Legacy Planning:
- When Alex turns 50, they decide to add their children as life assureds on the policy, using the life replacement option to transfer the policy down to future generations. This can be done at any time the policy is in force, subject to conditions.
- With multiple life assureds, the death benefit will only be paid out when the last life assured on the policy passes away.

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.

Tokio Marine Wealth@Future 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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