The Manulife Signature Income (II) is a single premium participating whole-life insurance plan designed to provide regular monthly income up to age 120.
You may position it as an annuity plan to provide you cashflow in retirement &/or as a tool to provide passive income. This plan may also be able to be collateralised for premium financing.
Payout from month37 vs Payout from month49
Manulife Signature Income (II) has two plan choices.
In this analysis, you'd see why payout from month37 is largely more popular as cashflow is out a year earlier.
Both plans are using a single premium of $100,000.
NON guaranteed monthly income is also higher with payout from month37 plan.
If the sum assured is $100,000, both plans will provide $1,550/y of guaranteed income.
The guaranteed monthly income is calculated at 1.5504%pa of sum assured.
However, the non-guaranteed monthly income for month 37 payout plan is higher as illustrated below.
With the non guaranteed monthly income added, as shown below (at illustrated 4.75%pa investment return), payout from month37 plan will be $4,151/y vs payout from month49 plan which will be $3,800.
This means that the TOTAL yield for the payout from month37 plan is higher than the payout from month49 plan.
Similar plan breakeven BUT payout from month49 payout plan has higher long term surrender value
Below is the table to show what is the possible breakeven point.
The table below is when monthly income is "PAID OUT".
Using an assumption that the non guaranteed rates fall within the 3.25% to 4.75% projection, it is likely that the breakeven (using surrender value + total monthly income paid out" for both plans is around the 9th year mark.
Do note that guaranteed surrender value remains at $80,000 only throughout.
If both plans are kept long term, the surrender value for payout after month47 plan has a higher potential surrender value and death benefit for legacy.
How to position plan in your portfolio
The Manulife Signature Income (II) regular monthly income can be used to supplement your CPF LIFE payouts for your retirement.
The death benefit increases over time and can be left for your next generation. This complements the decreasing bequest from CPF LIFE well.
To learn more on CPF LFE, watch video tutorial below!
I personally prefer the payout from month37 plan vs the payout from month49 plan.
It is currently the earliest in the market for monthly income payouts amongst single premium participating whole-life insurance.
Premium financing offers!
Banks may be able to collateralise the Manulife Signature Income (II) for premium financing. We do have a partnership now to structure it for you.
With premium financing, the after interest NET YIELD can be very attractive.
However, that is predicated on interest rates remaining low for the long term.
Some investors see it as a form of investment to capitalise on the low interest environment and unlike a property investment, it is hassle free.
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Last updated on November 20th, 2020 at 06:22 am