Understanding the Par funds

• The reversionary bonus rates and cash bonus rates are maintained for 2022.
• The terminal bonus rates have been adjusted for 2022 for some policies.

Once declared and vested, bonuses are guaranteed and payable in the event of a claim. Future bonuses, including maturity or terminal bonuses, are projected. The actual bonus rates declared in the future may be higher or lower, depending largely on the investment climate and economic conditions.

There is an adjustment of the bonus rates for some policies and as such, the surrender values of the policy have been revised accordingly.

There are two components of the surrender values – guaranteed and non-guaranteed. The surrender terminal bonus which is the final bonus added at surrender are not guaranteed and has been revised. Hence there is a change in the overall surrender value.

Premiums of participating policies are pooled to be invested and to pay for deductions due to claims and expenses. Premiums from different participating plans may be different in terms of magnitude and the timing in which these premiums are paid. Given these differences, the level of bonuses supportable by each participating plan may be different. As a result, the required bonus adjustment, if any, will not be equal across every policy.

The illustrated yield of your policy may be affected after the bonus revision. A copy of the revised policy illustration will be available on eConnect / Great Eastern App, otherwise, you may approach your Financial Representatives or contact our Customer Service Officers for more details.

The policy illustration is meant to illustrate the potential level of policy benefits to policyholders, including the non-guaranteed elements, based on the prevailing outlook of the performance of the Par Fund. One of the key elements affecting the non-guaranteed policy benefits is investment returns which can vary from year to year.

The rates used in the illustration are not a reflection of the actual returns of both existing and future participating policies. The actual returns received for a participating policy will depend on the actual experience, including investment performance, of the Par Fund that will develop over the lifetime of the participating policy.

No. The bonus declared for financial year 2022 is based on the performance of each fund in 2022, while the merging of the two funds began from 1 January 2023.

The illustrated values will be different from last year’s bonus statement if your policy is a Whole Life policy and the Life Assured’s Age is between 45 to 79 as the illustrated values are based on the year that is 20 years later from current year.

For example:

If your age today is 47, illustrated values this year are based on the year 2043 (20 years later from 2023). In the last year’s bonus statement, your age will be 46 and illustrated values are based on the year 2042 (20 years later from 2022).

Bonus rates declared are approved by the Board of Directors after written recommendation from the Appointed Actuary. When making recommendation for the amount of bonus to be declared for each policy, the Appointed Actuary has to take into consideration key factors that will affect the surplus available for distribution. These key factors include not only the investment performance and the outlook of the performance of the Par Fund in the medium to long term; they also include the claim experience, expenses, surrenders and lapses. The cumulative effect of past investment performance would be different for different plans, depending on the year of issue and type of plan.

We will be sending the Bonus Statement for 2022 to all our policyholders by batches in June 2023. The statement will give you details of the bonus declared, including the current and past three years’ reversionary bonus rates allocated. The statement will also provide details of the change in the illustrated values if the bonus rate of your policy has been adjusted.

Hardcopy Bonus Statements together with the Participating Fund Update for 2022 will be mailed out to the policyholders who are

• Aged 60 years old and above, or
• Has previously opt for hardcopy communication from the Company
  

The statements will be sent out progressively in batches in June this year.

*The Annual Bonus Statement will be accompanied by the Participating Fund Update for 2022. The Participating Fund Update will inform policyholders of the performance of our Par Fund in 2022, the asset mix, overview of the economic outlook and the allocation of Annual Bonuses to Par Policies for the year. We have included explanatory notes and infographics in the Statement to help you understand the common insurance terms used as well as how illustrated values are derived.

You may wish to update your preference via the following:

• Log on to eConnect

OR

• Call our Customer Service on 1800 248 2888 or email us at wecare-sg@greateasternlife.com

Once declared, bonuses are guaranteed and are payable in the event of a claim.

We do not encourage you to withdraw the accumulated bonus prematurely. This is because you will be paid only the surrender value of the accumulated bonus. If you have short-term financial needs, you may wish to consider taking a policy loan instead. You can contact our Customer Service Officers at 1800-248-2888 for more information on policy loan.

We will be sending the Bonus Statement for 2022 to all our policyholders by batches in June 2023. For policies with Reversionary/Terminal Bonus, you will receive a Par Fund Update for 2022 together with your Statement. You may refer to the Par Fund Update for the details on the asset mix of the Par Fund, fund performance and economic outlook.

This Bonus Statement is an annual statement applicable for participating policies which were in force at the end of 2022. In addition to this, the Cash Bonus will be allocated on the policy anniversary and the Cash Bonus Statement will be sent within one month from the date of allocation. Non-participating policies will not be reflected in the Statement.

For Endowment policies, we will show the “Illustrated Maturity Value”.

For Whole Life policies, we will show the “Illustrated Surrender Value” and “Illustrated Death Benefit” based on the Life Assured’s (LA) Age today as follows:

• If LA’s age is below 45 – the illustrated values are based on the year that the LA turns 65.
• If LA’s age is between 45 to 79 – the illustrated values are based on the year 2043 (20 years later).
• If LA’s age is above 79 – the illustrated values are based on the year that the LA turns 99.

Please note that Illustration Values may exclude Survival Benefit and Cash Bonus, if any. You may refer to the original Policy Illustration for these values.