• For both, non-guaranteed surrender bonus accumulates in an accelerating pace 🙂 Looks like timeIsOnYourSide. The longer you hold, the sweeter.
• .. FWD grows a bit faster, by 1k/Y on average if you look at “non_guaranteed_included” column
• — FWD
• FWD Surrender value … entails up to 20% loss .See Risks section.
• — FLI25
• 3rd window .. 10M, better than FWD. LIR risk lower.
• loan quantum .. 190k, better than FWD 228k. Both 76% of totalPrem
• upfront .. 1%, inferior to FWD 1.87%
• FLI2 guaranteed surrender value starts at 80% (200k) , growing beyond 100% after 30M. See BenefitIllustration
• FLI2 death benefit 101%, lower than FWD 105%
• partial surrender is a unique /option/ in FLI2

— my overall favorite i.e. asset to force-surrender last, asset to keep longest = Singlife

1. clawback [f] .. (after N years) SSSSSSinglife … amount bigger than the upfront
2. my confidence in payout commitment for first 10 years .. FFFFFWD as an eager new entrant [4]
3. surrender bonus [f].. (over long term) FFFFFWD … will enhance XIRR
4. worst case PnL .. (i.e. earliest exit) SSSSSSinglife way better , due to clawback + better quantum
5. quantum .. SSSSSSinglife
6. payout rate [f] .. FFFFFWD slightly better, partly to compensate for longer prison term, but I won’t “choose” it
7. upfront .. FFFFFWD 1.87%
8. LIR exposure .. during 3rd window. SSSSSSinglife wins, due to prison
9. prison .. (years without 100%BrE possibility) SSSSSSinglife. 6M shorter powerless-regret phrase.
10. death benefit .. FFFFFWD

Silvester pointed out FWD is the deal to hold long term, given those [f] items.

— all the risks .. With BGC, I overlooked/neglected currency risk. This time I want to highlight those neglected but realistic risks. This secion is gaining attention and importance.

• LIR risk .. if LIR skyrockets (K.Hu #2), I need to surrender partially, or liquidate ASAP, or pay_down the loan as describe below. See am long LIR !
• LIR risk .. if LIR drops very low, Wayne felt good for me as insurance annual payout would tend to stay up (FWD 3.38 ppa) for a long time.
• inflation risk .. (K.Hu #1) affects all fixed-income investments. See my first bpost on FLI2
• Giro operational risk .. esp. if I work overseas. A common risk in any monthly Giro / billPaymentObligation.
• If I lose my job .. Luckly, there will be no pending /payable/. This payout would support family /livelihood/.
• If I pass away .. FWD policy terminates with 105% death benefit (101% for FLI2), and loan paid off. simplicity
• early-surrender risk .. surrender value can show up-to 20% loss if within 36M. See BenI.
• projected payout risk .. see separate section

— “Projected payout” .. not as good as guaranteed. Similar risk in any long-term fixed-income.

FWD, Singlife, ChinaLife and GEL all give a top-line payout rate (like 2.98 ppa, or 3.55 ppa of total prem). I confirmed with Wayne of ICBC and Iris of GEL that this payout rate was computed from the annual payout amount in the 4.25% illustration column.  Clearly the sales team and the insurer treat this payout rate as a promise, not just a fake illustration. As such, Singapore insurer bends over backward to keep this promise. Singapore insurers do cut payout rate selectively, usually targetting the “expensive” policies first. These insurers (like TokyoMarine) once promised /unsustainable/ payout rates to early customers, and subsequently had to cut it. It is probably not a default event, becasue insurers have plenty of protective clauses in all official documents that give them leeway to cut bonus/payout.

The industry-standard illustrative return was reduced from 4.75% to 4.25% exactly for the goal of sustainable payout rate.

[4] FWD as an eager new entrant presumably has a large reserve to help prop up projected payout, at least for N years

See also my email [[cashflow situation]] to Silvester and [[GEL annuity with prem financing]] to Iris Pek

— which month to surrender … Comparing the two surrender scenarios, Singlife pays me up to 12M additional !
* FWD.. Cleanest month to surrender is right Before receiving annual payout. If you surrender 3M after that, then 9M clawback is factored into the surrender value.
* Singlife.. best done right After receiving annual payout. No “monthly” option. If you surrender 3M after that, then you would have paid 3M of LIR for no gain.

— Owner of policy  .. is CIMB. CIMB receive all annual payout, surrender value, death benefits … from insurer and forwards to me.

nomination, change of person insured … doable after you pay off loan and take over ownership.