China Taiping Infinite Harvest Plus II

China Taiping Infinite Harvest Plus II plan offers several key benefits for review, including a yearly income until the primary life insured’s age of 120. This yearly income consists of a guaranteed amount and a non-guaranteed yearly cash bonus. The plan also includes a booster bonus that starts as early as the 20th policy year, providing an additional boost to financial growth.

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China Taiping Infinite Harvest Plus II key benefits elaborated:

Capital guarantee: 100% of the capital is guaranteed, with the guarantee starting from the end of the 3rd policy year for single premiums and 3-year premium terms, and from the end of the 5th policy year for 5-year premium terms.
Premium flexibility: Policyholders can choose from a single premium payment or opt for a 3 or 5-year premium payment term.
Legacy and continuity: The plan allows for the appointment of a Secondary Life Insured (SLI) to ensure policy continuity, allowing a steady flow of wealth to continue even after the death of the primary life insured (PLI).
Simple application: No medical check-up is required, simplifying the application process.
Maturity benefit: A lump sum maturity benefit is paid out at the age of 120.
Death benefit: A lump sum death benefit is provided to loved ones in the event of the life insured’s death.
Additional Features: Policy holders can opt to accumulate yearly income and booster bonuses with China Taiping Insurance, with interest accrued at a non-guaranteed rate.
Policy Loan: Policy loans of up to 80% of the total surrender value are available, with a current policy loan interest rate of 6.25% per annum.

China Taiping Infinite Harvest Plus II has important considerations:

Not for high protection: The plan is not designed for individuals seeking high protection.
Not for those preferring spread out premium commitments: The plan is designed for those who prefer one-time or short term premium commitments
Early termination costs: Terminating the policy early may incur high costs, and the surrender value may be zero or less than the total premiums paid.
Non-guaranteed bonuses: The yearly cash bonus, booster bonus, and terminal bonus are non-guaranteed, and their actual values may vary depending on the performance of the participating fund. The accumulation interest rate is also non-guaranteed and subject to change with a 30-day notice.
Surrender Value: For a single premium, the guaranteed surrender value is only equivalent to 80% of the single premium immediately after the policy is incepted, increasing to 100% at the end of the 3rd policy year, and then increasing gradually to 105% at the end of the 25th policy year where it stays level.
Death Benefit limitations: If the life insured dies due to causes other than an accident within one year of the policy issue date, only 100% of the total premiums paid will be payable.
Policy Loan Interest: Policy loans will accrue interest at the prevailing policy loan interest rate, which is 6.25% per annum.

China Taiping Infinite Harvest Plus II used for securing a Child’s Financial Future:

Robert, a 45-year-old, wants to ensure his 10-year-old daughter, Denise, has a financially secure future. He purchases the Infinite Harvest Plus II plan with a single premium of S$100,000.

Key Features and Benefits in this Use Case:

Yearly Income: Starting from the end of the 3rd policy year, Denise will receive a guaranteed yearly income of S$3,500. This income continues until she reaches age 120. The total yearly income received over 73 years is projected to be S$255,500.
Non-guaranteed Yearly Cash Bonus: In addition to the guaranteed yearly income, Denise will receive a non-guaranteed yearly cash bonus, which is illustrated as S$1,500 per year.
Booster Bonus: From an unspecified point, but starting from as early as the 20th policy year, Denise also receives a booster bonus of S$350 per year. The total booster bonus received over 41 years is projected to be S$14,350. The start of the booster bonus is dependent on the entry age of the primary life insured.
Capital Guarantee: The plan guarantees 100% of the capital from the end of the 3rd policy year. This means Robert’s initial investment is protected.
Legacy: Should Denise pass away at age 85, her loved ones will receive an inheritance of S$118,500.
Total Payout: By the time Denise reaches 85, the total projected payout from the policy is S$388,350, which is 388.35% of the single premium paid. This includes all income and the death benefit.
Flexibility: The yearly income and booster bonus can be paid out or accumulated with China Taiping.

How this meets Robert’s goals:

Financial Security: Robert secures a steady stream of income for Denise, providing her with resources to pursue her dreams.
Long-Term Planning: The plan offers a lifetime of income, ensuring Denise’s financial well-being.
Legacy: If Denise dies, her loved ones will receive a death benefit, providing some financial security to them.

Important Considerations:

Non-Guaranteed Bonuses: The yearly cash bonus and booster bonus are not guaranteed and can vary based on the performance of the participating fund.
Illustrated Investment Rate of Return (IIRR): The illustrations are based on an IIRR of 4.25% p.a. If the IIRR is 3.00% p.a., the yearly income and total payout values would be lower. For instance, for a 3.00% IIRR, the total yearly income received would be S$175,200, and the total payout would be S$292,840.
Age: All ages in the marketing materials are based on age next birthday.
Early Surrender: If the policy is surrendered early, the surrender value could be significantly less than the total premiums paid.

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.

China Taiping Infinite Harvest Plus II 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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