China Life Lifetime Income Plan Review

I've done analysis on this plan for private clients and this plan can be a solution to adding on more passive income streams for retirement planning.

You may find this plan also in banks ICBC and BOC!

China Life Lifetime Income Plan is an annuity plan and the first key benefit to note is it's yearly (not monthly) lifetime income.

This payout will last for your LIFETIME, similar to CPF LIFE. The longer you live the more total payouts you get.

What is different however is that your bequest amount (death benefit amount) will not decrease. It will stay intact. 

The 2.2% guaranteed as show below is based on the "sum insured" and does not mean guaranteed yield. Will discuss the yield below.

You can also decide when to get this payout from.

In this example below, payout was chose to be from age 45 all the way for lifetime.

This is the white elephant question!

If you lived in China before, you would certainly have known of them as they are one of the leading insurers there.

Parts from their website, Click here for more, : "Established in 2015, China Life Insurance (Singapore) Pte. Ltd. is a licensed life insurer which is regulated by the Monetary Authority of Singapore. 

The immediate parent company is China Life Insurance (Overseas) Company Limited ("China Life (Overseas)") who in turn is a wholly-owned subsidiary of China Life.

China Life is a state owned enterprise and it's financial ratings are by Moody's was "A1" (insurance financial strength rating in August 2018) and by Standard & Poor's was "A".

From my understanding, China Life Insurance SG has it's own investment arm here in Singapore to invest into assets for the collected premiums. Because this product is new, there is only a 1y track record thus far to show for the non-guaranteed portions.

Planning perimeters: 5year premiums of around $30,000 in budget.

You would like to get retirement cashflow from age60 (hence accumulation 0 mode chosen) as shown below.

This plan gives you retirement cashflow in guaranteed and non-guaranteed portions.

The total retirement cashflows you'd get is $2,200/year (guaranteed) + up to $4,000 non-guaranteed (4% of $100,000 sum assured)

The non-guaranteed portions is based on the investment performance of China Life Insurance SG. As mentioned, there is no track record now but looking at other insurers, achieving 3.25%pa or 4.75%pa on PAR fund performance is probable. 

On a side note: There are actually 3 insurers who have done a >4.75% average return over 5years (year2013-2017) on their PAR fund. Our internal team at Promiseland Independent Pte Ltd has a summary on it for internal use but actually, all insurers PAR performance is public.

Next is the surrender value of the plan which increases every year even though you are drawing out income.

The China Life Lifetime Income Plan does give you a fast breakeven point. As soon as premiums are completed (which is the 5th year in this case), your guaranteed value is the same as premiums as highlighted below.

Lastly, below is the total illustrated yield you'd get when investing into this plan.

If you bought the plan at an age before 55, the total yield would certainly be higher.

China Life Lifetime Income plan has strong similarities to AVIVA MyLifetimeIncome Plan (click here to learn more).

Both plans give you cashflow in your retirement years (for LIFETIME!) and allows you to leave something behind for your next generation.

Now if you are young and wondering when you should start planning for retirement, check out my solutions on my youtube channel!