pulsar II investment insurance plan Product Handbook

Transcription

1 pulsar II investment insurance plan Product Handbook For Internal Use Only

2 Section Contents Page 1. Background 2 2. Product Summary 3 3. Product Details Charges Breakeven Growth Rate Investment Options Administration Guidelines AXA Proposal System Marketing Support Frequently Asked Questions and Answers Appendix Appendix 1. Insurance Charge Rate Table 39 Appendix 2. Monthly EEC Rate Table Appendix 3. Sample Application Form Appendix 4. Delegation of Investment Option Management and Consultant Service Fee 51 The information furnished herein by AXA China Region Insurance Company (Bermuda) Limited (Incorporated in Bermuda with limited liability) ( AXA ) is private and confidential and may only be used for internal training purpose. This is not an invitation to the public. This training material is not authorized by AXA for public distribution. Do not duplicate, distribute or disclose such information to any unauthorized person in whole or in part, or use any such information for any other purpose without the prior written perm ission of AXA. Unauthorized use or disclosure of this document is strictly prohibited.

3 1. Background There are various new ILAS regulatory requirements introduced in 2013/4. This arouse the customers awareness towards ILAS. This created an opportunity for us to further capture the linked business and leverage off regulator s educational promotion on ILAS. AXA ILAS contributed approximately 40% of total APE YTD Nov AXA market share in ILAS raised from 20% in 2013 to 35% in 2014 Q3 1. As a result, this is paramount to maintain the competitiveness of AXA ILAS products. In July 2014, OCI has launched Guidance Note on Underwriting Class C Business ( GN15 ) on product design to further enhance customer value. The directive principles and impacts are highlighted as follows: Principle Impacts Bringing insurance value Death benefit Fair treatment of customers Shorten surrender charge period Surrender charge Minimum contribution period Total fees and charges Suitability assessment Issue age Meet clients expectation Illustration Appropriate commission structure Commission Structure At AXA, a series of revamped products were designed in order to meet GN15 and maintain the product competitiveness. This creates a win-win-win situation to customers, distributors and issuers. 1. Source: Quarterly Release of Provisional Statistics for Long Term Business 2014, published on November 28, P.2, total 51 pages

4 2. Product Summary Pulsar II Investment Insurance Plan is a regular premium investment-linked insurance product with various contribution periods of years. It offers a wide range of investment options for customers to capture potential investment growth as well as to balance the risk of their investment portfolios over different sectors and markets. In addition, the increase in death benefit and addition of accident death benefit also offer customers comprehensive protection. I. Key Selling Points and Benefits Key Selling Point Advantage Benefit 1. Target contribution period A total of 16 payment choices Choices to meet different financial needs 2. Monthly regular premium of Start investment with life With low entry requirement as low as HKD1,600 protection with low premium investment options in 26 A wide range of investment Meet different investment categories choices objectives 4. Start-up bonus Extra investment award Enhance potential returns 5. Loyalty bonus On-going investment addition Offset the ongoing charges 6. Death benefits To provide life protection Should the market fluctuates, customer at least get 5% of account value as life protection or original investment amount 7. Accidental death benefits Extra protection to customers during minimum contribution period Double protection during MCP 8. Partial withdrawal Flexibility To cope with unexpected financial needs 9. No bid-offer Spread Minimise the cost of Maximize the investment transactions 10. No switching fee Minimise the cost of Maximum the investment transactions II. Target Customers Customers who look for long-term investment through a diversified investment vehicles for retirement, educational fund for child(ren) or estate planning Customers who look for investment which allows the original investment protected when death Customers who look for savings with upside potential and minimum life protection P.3, total 51 pages

5 3. Product Details I. General Information Plan Name Pulsar II Investment Insurance Plan ( 雋宇 II 投資保險計劃 ) Product Code PULB + Target Contribution Period (e.g. Pulsar II 10-year Plan, Product Code = PULB10) Product Type Investment-linked insurance plan Launch Date 2 Jan, 2015 for Hong Kong Issue Age Age 0 (14 days) 55 (age last birthday) Different maximum issue age for different Target Contribution Period Target Contribution Period + Issue Age Age 75 Target Issue Age of the Issue Age of the Contribution proposed policy proposed insured Period (years) owner days days days days days days 50 Benefit Period To age 100 Rider Attachment Not applicable P.4, total 51 pages

6 II. Plan Structure Policy Date Target Contribution Period (TCP): years End of TCP End of policy 1. Premium Regular Premium (for MCP) Regular Premium (for period after Minimum Contribution Period MCP ) Initial Units Account (IUA) Accumulation Units Account (AUA) Policy Date Target Contribution Period (TCP): years End of TCP End of policy 2. Bonus Start-up Bonus (in 1 st policy year) Loyalty Bonus (from 3 rd - 6 th policy anniversary until end of policy) Initial Units Account (IUA) Accumulation Units Account (AUA) Policy Date Target Contribution Period (TCP): years End of TCP End of policy Initial Units Account (IUA) Accumulation Units Account (AUA) 3. Policy Charges Administration Charge, payable till end of policy Account Service Fee, payable till end of policy Insurance Charge, payable till end of policy Account Maintenance Fee, payable till end of EEC Period (10 12 years, subject to TCP) EEC payable upon surrender/termination during the EEC Period (10 12 years, subject to TCP upon surrender/termination) 4. Reduction During MCP Premium reduction Premium holiday During TCP Premium reduction After MCP Premium holiday, but relevant Policy Charges will remain payable Policy surrender/ termination, subject to EEC within EEC Period N/A N/A After TCP No EEC for policy surrender/ termination *Apart from Policy Charges, Charges on Reference Funds (including the Fund Management Charge and Other Charges) are also payable. P.5, total 51 pages

7 III. Premium Payment Target Contribution Period (TCP) Payment Frequency and Modal Factor Policy Currency Minimum Regular Premium Minimum Contribution Period (MCP) years (Must be in whole year) TCP is the regular premium payment period TCP cannot be changed once the policy is issued After the end of the TCP, no premium will be accepted Annual Semi-annual Monthly 1 1/2 1/12 HKD / USD / EUR / GBP / AUD / SGD Policy currency cannot be changed once the policy is issued Policy Currency/ Payment HKD USD EUR GBP AUD SGD Frequency Annual 19,200 2,400 2,400 1,560 2,880 3,840 Semi-annual 9,600 1,200 1, ,440 1,920 Monthly 1, AXA reserves the right to change the Minimum Regular Premium with prior written notice of not less than one month to the customers. TCP (years) MCP 10 First 24 months (2 years) from the policy date First 30 months (2.5 years) from the policy date First 36 months (3 years) from the policy date First 48 months (4 years) from the policy date First 54 months (4.5 years) from the policy date Consists of 2 accounts: Initial Units Account (IUA) Regular premium paid for the MCP will be allocated to the IUA Policy Accounts Accumulation Units Account (AUA) Regular premium paid for the period after the MCP will be allocated to the AUA Account Value = IUA value + AUA value P.6, total 51 pages

8 Reducing Regular Premium: Allowed after the MCP, customers may reduce the regular premium to no less than the Minimum Regular Premium Reducing / Increasing Regular Premium Increasing Regular Premium: Allowed only if the regular premium has been reduced, customer may increase it back up to the original regular premium amount committed at policy issuance Application for increasing regular premium will be subject to the underwriting requirements and administrative rules Except the condition above, customers cannot increase regular premium. However, customers can apply for a new Pulsar II policy to increase the regular premium Important Note Reduction in regular premium will lead to loss of entitlement to the Loyalty Bonus and reduction in the Account Value and further lead to reduction in any applicable Loyalty Bonus P.7, total 51 pages

9 During the MCP Not Allowed During the TCP but after the MCP Not allowed Allowed Not allowed from the IUA Can be made only from the AUA if the remaining AUA value immediately after the partial withdrawal is greater than 0 (please refer to Termination under section 3 for details) After the TCP Partial Withdrawal Allowed Can be made from the IUA and / or AUA if (i) the remaining Account Value immediately after the partial withdrawal meets the Minimum Account Balance (ii) if the AUA value immediately after the partial withdrawal is greater than 0 Minimum partial withdrawal amount (per withdrawal) HKD4,000 / USD500 / EUR500 / GBP320 / AUD600 / SGD800 AXA reserves the right to change the minimum partial withdrawal amount by giving the customers one month s prior written notice Important Note Making a partial withdrawal will lead to reduction in the Account Value and further lead to reduction in any applicable Loyalty Bonus, as well as termination of the policy (please refer to Loyalty Bonus under section 3 for details) Minimum Account Balance HKD12,000 / USD1,500 / EUR1,500 / GBP960 / AUD1,800 / SGD2,400 P.8, total 51 pages

10 During the MCP: Not allowed The policy will terminated and the EEC will apply if the regular premium remains outstanding after the expiry of grace period (Please refer to Termination under section 3) After the MCP: Can be applied only if the AUA value is sufficient to cover the relevant Policy Charges due Premium holiday will not be available if the requirements above are not satisfied Premium Holiday Important Note During the premium holiday, relevant Policy Charges will continue to be deducted from the AUA value. If the AUA value is insufficient to cover charges due, the premium holiday will cease and we will notify the customer to resume payment of the regular premium A 31-day grace period will be allowed immediately following the due date for the Policy Charges. If the Policy Charges remain outstanding after the expiry of the grace period, the policy will terminate (please refer to Grace Period, Termination and Early Encashment Charge under section 3) Taking a premium holiday will lead to loss of entitlement to the Loyalty Bonus and reduction in the Account Value and further lead to reduction in any applicable Loyalty Bonus (please refer to Loyalty Bonus under section 3 Benefits for details) P.9, total 51 pages

11 IV. Policy Benefits Start-up Bonus = Regular premium paid for the 1 st policy year x Start-up Bonus rate of (1% x No. of years in the chosen TCP) Payable upon receipt of each payment of regular premium for the 1 st policy year in cleared funds while the policy is in effect Allocate to the IUA in the form of additional units according to the customer s latest investment option allocation instruction (Please refer to section 3 for Illustrative Examples) Start-up Bonus clawback All / part of the Start-up Bonus will be clawback if the policy: 1. is surrendered during the MCP; 2. terminates due to the regular premium for the MCP remaining outstanding after the expiry of grace period; and 3. terminates due to the insured committing suicide within one year commencing from the policy date, or the date of reinstatement, whichever is later. Start-up Bonus Start-up Bonus clawback = IUA value x [ Total actual amount of Start-up Bonus allocated / ( Total regular premium paid for the MCP + Total actual amount of Start-up Bonus allocated ) ] x Clawback factor Where clawback factor is (a) During the 1 st policy year = 1; or (b) After the 1 st policy year = No. of months from the date of termination till the end of the MCP (any incomplete month will be rounded up to a full month) / (MCP (in months) 12 months) Deducted from the IUA in calculation of the EEC, the Surrender Value and the death proceeds (Please refer to section 3 for Illustrative Examples) Important Note This bonus will form part of the Account Value and is therefore subject to relevant Policy Charges If the policy is cancelled within the cooling-off period, the account value relating to the Start-up Bonus will not be paid (Please refer to Cooling-off Period under section 3 for details) P.10, total 51 pages

12 Loyalty Bonus = The average calendar month-end AUA value for the 12 months prior to the relevant policy anniversary on which the Loyalty Bonus is payable x Loyalty Bonus rate of 0.95% Loyalty Bonus Payable every policy year from the respective policy anniversary according to the chosen TCP while the policy is in effect During the TCP but after the MCP Payable if the regular premium committed at policy issuance has been fully paid After the TCP Payable if the policy remains in effect Loyalty Bonus payable every policy year TCP (years) starting from 10 the 3rd policy anniversary the 4th policy anniversary the 5th policy anniversary the 6th policy anniversary Allocate to the IUA in the form of additional units according to the customer s latest investment option allocation instruction (Please refer to section 3 for Illustrative Examples) Important Note Taking a premium holiday / reduction in the regular premium during the 12 months prior to the relevant policy anniversary on which the Loyalty Bonus is payable will lead to loss of entitlement of the Loyalty Bonus. However, it will be resumed if premium holiday is ceases and regular premium is resumed / increased to the original amount committed at the policy issuance during the whole duration of the 12 months prior to the relevant policy anniversary. Once the entitlement to the Loyalty Bonus payable on a policy anniversary is forfeited, no Loyalty Bonus will be paid for that policy anniversary. P.11, total 51 pages

13 The higher of: (a) 105% of the Account Value; or (b) Total regular premium paid Total partial withdrawals made less any outstanding Policy Charges (Please refer to section 3 for Illustrative Examples) Death Benefit If the insured commits suicide within 1 year commencing from the policy date or the date of reinstatement, whichever is later, the death proceeds shall be: The lower of: (a) Total regular premium paid; or (b) Total Policy Charges paid + IUA value + AUA value IUA value x [ Total Start-up Bonus paid / ( Total regular premium paid for the MCP + Total Start-up Bonus paid ) ] Accidental Death Benefit Annual regular premium at policy issuance Accidental Death Benefit HKD19,200 USD2,400 < HKD100,000 < USD12,500 HKD300,000 USD37,500 EUR2,400 < EUR 12,500 EUR37,500 to GBP1,560 < GBP8,000 GBP24,000 AUD2,880 SGD3,840 < AUD15,000 < SGD20,000 AUD45,000 SGD60,000 HKD100,000 USD12,500 < HKD500,000 < USD62,500 HKD500,000 USD62,500 ERU12,500 < EUR62,500 EUR62,500 to GBP8,000 < GBP40,000 GBP40,000 AUD15,000 SGD20,000 < AUD75,000 < SGD100,000 AUD75,000 SGD100,000 HKD500,000 USD 62,500 HKD1,000,000 USD125,000 EUR62,500 EUR125,000 and above GBP40,000 GBP80,000 AUD75,000 SGD 100,000 AUD150,000 SGD200,000 Applicable to the Insured aged from 14 days to 65 (age last birthday) on the policy issue date Applicable if the insured dies before attaining the age of 65 solely and directly as a result of an accident during the MCP, independently of any other causes and within 90 days of the accident P.12, total 51 pages

14 Surrender Value Accidental Death Benefit will terminate on the earliest of 1. At the end of the MCP; 2. When the policy terminates; 3. At the policy anniversary on or immediately following the 65th birthday of the insured; or 4. When the Accidental Death Benefit is paid or becomes payable Accidental Death Benefit will not be paid if the insured s death results from one or more of the following: 1. Any self-inflicted injury or suicide, whether sane or insane; 2. Disease or infection (except infection which occurs through an accidental cut or wound), including infection with any Human Immunodeficiency Virus (HIV) and/or any HIV-related illness including Acquired Immune Deficiency Syndrome (AIDS) and/or any mutations, derivations or variations thereof; 3. Bodily or mental infirmity; 4. Taking poison, drugs not prescribed by Medical Practitioner, alcohol, sedatives, or inhaling gas (except from hazard incidental to occupation); 5. The attempt or commission of assault or unlawful act by the insured; 6. Any act due to war, declared or not, military, naval or air service for any country at war, declared or not; 7. Travel or flight in any aircraft, except as a fare-paying passenger on a public licensed air services; 8. Pregnancy, childbirth, miscarriage or any of their consequences, pre-existing physical or mental defect or infirmity; or 9. Any chemical, nuclear and biological attacks. Account Value Start-up Bonus clawback (if any) outstanding Policy Charges, including EEC (if applicable) P.13, total 51 pages

15 V. Fees and Charges 1. Policy Charges AXA reserves the right to vary the Policy Charges or impose new charges with not less than one month s prior written notice or such shorter period of notice in compliance with the relevant regulatory requirements. Payable monthly in advance by cancelling units from the IUA during the EEC Period Account Maintenance Fee (AMF) Monthly Account Maintenance Fee = 5.5% / 12 x IUA value as at the due date for the payment of AMF Administration Charge (AC) Payable monthly in advance while the policy is in effect During the MCP Payable by cancelling the units from the IUA After the MCP Payable by cancelling units from the AUA Monthly Administration Charge = HKD50 / USD6.5 / EUR6.5 / GBP4 / AUD7.5 / SGD10 Account Service Fee (ASF) Payable monthly in advance by cancelling units from the IUA and the AUA while the policy is in effect Monthly Account Service Fee = 1% / 12 x Account Value as at the due date for the payment of the ASF P.14, total 51 pages

16 Payable monthly in advance while the policy is in effect During the MCP Payable by cancelling the units from the IUA After the MCP Payable by cancelling units from the AUA (Please refer to section 3 for Illustrative Examples) Insurance Charge Monthly Insurance Charge = Applicable Insurance Charge rate p.a. / 12 x Net Amount at Risk Where Net Amount at Risk is The higher of: (a) 5% of the Account Value; and (b) Total regular premium paid Total partial withdrawals made Account Value as at due date for the payment of the Insurance Charge (Please refer to Appendix 1 for Insurance Charge Rate Table) Switching Fee Bid-offer Spread Nil Nil P.15, total 51 pages

17 EEC is levied upon surrender / termination (other than as a result of the death of the insured) during the EEC Period while the policy is in effect TCP (years) EEC Period (years) Deducted from the IUA value in calculating, after which the Surrender Value will be paid EEC = Applicable EEC rate x IUA value as at date the notional units of investment options are cancelled Early Encashment Charge (EEC) For surrender / termination during the EEC Period happens: At the start of a policy year EEC rate is as listed on the EEC rate table on page 17. During a policy year EEC rate shall be determined as A [ ( A B ) x T / 12 ] Where, A = EEC rate for the start of the policy year during which the surrender / termination takes place B = EEC rate for the start of the policy year immediately following the relevant policy year T = Number of completed policy month from the start of the relevant policy year to the date of the surrender / termination, excluding any incomplete policy month. P.16, total 51 pages

18 The EEC rate table (Please refer to section 3 for Illustrative Examples and Appendix 2 for monthly EEC rate) Start of / the relevant policy year EEC rate (%) according to the chosen TCP (years) st nd rd th th th th th th th th th th Charges on Reference Funds These charges are levied by the investment manager of each reference funds, and is set out in the offering documents of the reference funds which are made available by AXA upon request, and is reflected in the unit prices of the reference funds Fund Management Charge Other Charges Fund management charge for the reference funds is calculated based on the respective net asset value of the reference funds. The charge is determined by the investment manager of each reference fund and is set out in the offering documents of the reference funds, which are made available by AXA upon request. Such charge is reflected in the unit prices of the reference funds and varies from one reference fund to another The reference funds are subject to the fees, charges and expenses levied by the investment managers and other service providers of the reference funds. Such fees, charges and expenses will vary from one reference fund to another. P.17, total 51 pages

19 VI. Other Information Cooling-off Period Grace Period Termination Policy Maturity Customer may cancel the policy within 21 days after the delivery of the policy / issue of a notice AXA will refund the amount paid, or less if the value of the customer s investment options chosen has fallen at the time when the cancellation request is received by us and will not be entitled to the Start-up Bonus During the MCP 31 days immediately following the due date for the payment of regular premium After the MCP 31 days immediately following the due date for the payment of the Policy Charges if the AUA value is insufficient to cover the relevant Policy Charges due The policy will automatically terminate on the earliest of: 1. When the policy is surrender; 2. On the death of the insured; 3. At the policy maturity; 4. During the MCP, if the regular premium remains outstanding after the expiry of the grace period; and 5. After the MCP, if the AUA value is insufficient to cover the relevant Policy Charges due after the expiry of the grace period We may terminate the policy at any time if in our opinion the customer s ownership of the policy is likely to impose any regulatory / tax obligation on us that it would not otherwise be subject to Surrender Value / Death Benefit (where applicable) shall be paid The policy will mature and terminate on the earliest of: (a) the Policy Anniversary which falls on the date on which the insured attains the age of 100 if the date of the 100th birthday of the insured coincides with such Policy Anniversary, or; (b) the Policy Anniversary immediately after the date on which the insured attains the age of 100 if the date of the 100th birthday of the insured does not coincide with a Policy Anniversary Surrender Value shall be paid P.18, total 51 pages

20 VII. Illustrative Examples 1. Start-Up Bonus (1a) Calculation of Start-up Bonus Start-up Bonus = Regular premium paid for the 1 st policy year x Start-up Bonus rate (1% x No. of years in the chosen TCP) Assumptions: TCP : 20 years Monthly regular premium : USD900 Applicable Start-up Bonus rate : 1% x 20 = 20% If the regular premium is paid on a monthly basis, the Start-up Bonus allocated upon each regular premium payment for the 1 st policy year = USD900 x 20% = USD180 Total Start-up Bonus allocated for the 1 st policy year = USD180 x 12 = USD2,160 (1b): Start-up Bonus Clawback Amount Start-up Bonus clawback = IUA value x [Total actual amount of Start-up Bonus allocated / (Total regular premium paid for the MCP + Total actual amount of Start-up Bonus allocated)] x Clawback factor Clawback factor = No. of months from the date of termination till the end of the MCP (any incomplete month will be rounded up to a full month) / (MCP (in months) 12 months) Assumptions: The policy is then surrendered at the end of the 21 st policy month during the MCP TCP : 20 years MCP : 48 months No. of months from the date of termination till the end of the MCP = 27 months Total regular premium paid : USD900 x 21 = USD18,900 Total actual amount of Start-up Bonus allocated : USD2,160 Prevailing IUA value : USD21,000 P.19, total 51 pages

21 Clawback factor = 27 / (48-12) = 0.75 Total Start-up Bonus clawback amount = USD21,000 x [ USD2,160 / (USD18,900 + USD2,160) ] x 0.75 = USD1, Loyally Bonus (2a): Calculation of Loyalty Bonus Loyalty Bonus = the average calendar month-end AUA value for the 12 months prior to the relevant policy anniversary on which the Loyalty Bonus is payable x Loyalty Bonus rate of 0.95% Assumptions: TCP : 10 years MCP : 24 months Regular premium committed at policy issuance has been fully paid when due during the TCP On the 3rd policy anniversary The average calendar month-end AUA value for : USD15,000 the 12 months prior to the 3rd policy anniversary Loyalty Bonus allocated on the 3 rd policy anniversary = USD15,000 x 0.95% = USD142.5 (2b): Calculation of Loyalty Bonus in late years Assumptions: TCP : 10 years MCP : 24 months Regular premium committed at policy issuance has been fully paid when due during the TCP On the 9th policy anniversary The average calendar month-end AUA value for : USD60,000 the 12 months prior to the 9 th policy anniversary Loyalty Bonus allocated on the 9 th policy anniversary = USD60,000 x 0.95% = USD570 P.20, total 51 pages

22 3. Death Benefit (3a): Calculation of Death Benefit Death Benefit = The higher of (i) 105% of the Account Value; or (ii) Total regular premium paid partial withdrawals made, Any outstanding Policy Charges Assumptions: When the insured passed away Total regular premium paid Total partial withdrawals made Account Value Outstanding Policy Charges : USD54,000 : USD12,500 : USD35,000 : Nil Death Benefit payable = (i) USD35,000 x 105%; or (ii) USD54,000 USD12,500, whichever is higher = (i) USD36,750; or (ii) USD41,500, whichever is higher = USD41,500 (3b): Calculation of Death Proceeds for Suicide within 1 year Death proceeds = The lower of (i) Total regular premium paid; or (ii) Total Policy Charges paid + IUA value + AUA value IUA value x [ Total Start-up Bonus paid / ( Total regular premium paid for the MCP + Total Start-up Bonus paid ) ] Assumptions: TCP : 15 years Monthly regular premium : USD500 Start-up Bonus = USD500 x 1% x 15 = USD75 The policy terminated at the end of the 6th policy month when the insured committed suicide Total regular premium paid = USD500 x 6 = USD3,000 Total actual amount of Start-up Bonus allocated = USD75 x 6 = USD450 Total Policy Charges paid : USD100 Prevailing IUA value : USD3,060 Prevailing AUA value : USD0 Death proceeds payable = (i) USD3,000; or (ii) USD100 + USD3,060 + USD0 USD3,060 x [USD450 / (USD3,000 + USD450)], whichever is lower = (i) USD3,000; or (ii) USD2,761, whichever is lower = USD2,761 P.21, total 51 pages

23 4. Insurance Charge (4a) Calculation of Insurance Charge Insurance charge = Insurance Charge rate x Net Amount at Risk Net Amount at Risk = The higher of (i) 5% of the Account Value; or (ii) Total regular premium paid Total partial withdrawals made Account Value as at due date for Insurance Charge Assumptions: Insurance charge rate for a male 0.508% per annum insured at the attained age of 50 : Total regular premium paid : USD36,000 Total partial withdrawals made : USD1,000 Account Value : USD29,000 Net amount at risk = (i) USD29,000 x 5% = USD1,450 or (ii) USD36,000 (USD1,000 + USD 29,000) = USD1,450 or USD6,000, whichever is higher = USD6,000 Insurance Charge for the month = 0.508% /12 x USD6,000 = USD Early Encashment Charges (5a) Calculation of EEC during Minimum Contribution Period Assumptions: TCP : 15 years EEC Period : 10 years MCP : 36 months Policy is surrendered in the 10th policy month of the 2nd policy year, i.e. the 22nd policy month Policy date : 1 Jan, 2015 Total regular premium paid : USD27,300 Total actual amount of start-up : USD2,340 bonus allocated IUA value : USD30,400 AUA value : USD0 Date of surrender : 15 Oct, 2016 Outstanding Policy Charges : USD0 P.22, total 51 pages

24 The clawback factor = 15 / (36-12) = Start-up bonus clawback amount = USD30,400 x [USD2,340 / (USD27,300 + USD2,340)] x = USD1,500 IUA Value after deduction of the start-up bonus clawback amount = USD30,400 USD1,500 = USD28,900 Account Value = USD28,900 + USD0 = USD28,900 The applicable EEC rate = A [(A B) x T /12] A = 50% B = 41% T = 9 where A = EEC rate for the policy year during which the surrender or termination takes place B = EEC rate for the policy year immediately following the relevant policy year T = Number of completed policy month from the beginning of the relevant policy year to the date of the surrender or termination, excluding any incomplete policy month The applicable EEC rate = 50% [(50% 41%) x 9 / 12] = 43.25% EEC = USD28,900 x 43.25% = USD12,499 Surrender Value = Account Value - EEC = USD28,900 USD12,499 = USD16,401 P.23, total 51 pages

25 (5b) Calculation of EEC after Minimum Contribution Period Assumptions: TCP : 25 years EEC Period : 12 years MCP : 54 months Policy is surrendered in the 6th policy month of the 11th policy year, i.e. the 126th policy month Policy date : 1 January 2015 IUA value : USD32,000 AUA value : USD45,000 Date of surrender : 15 Jun, 2025 Outstanding Policy Charges : USD0 The applicable EEC rate = A [(A B) x T /12] A = 13% B = 7% T = 5 where A = EEC rate for the policy year during which the surrender or termination takes place B = EEC rate for the policy year immediately following the relevant policy year T = Number of completed policy month from the beginning of the relevant policy year to the date of the surrender or termination, excluding any incomplete policy month The applicable EEC rate = 13% [(13% 7%) x 5 / 12] = 10.5% EEC = USD32,000 x 10.5% = USD3,360 Surrender Value = Account Value EEC = (USD32,000 + USD45,000) USD3,360 = USD73,640 P.24, total 51 pages

26 4. Charges Breakeven Growth Rate Monthly Regular Premium (HKD) TCP (Years) , % 1.85% 1.45% 1.28% 5, % 1.54% 1.22% 1.10% 10, % 1.47% 1.17% 1.05% 15, % 1.44% 1.15% 1.04% 33, % 1.42% 1.13% 1.02% Assumptions: (i) The above Annual Growth Rates assume that all contributions are paid as they fall due during the TCP (ii) The rates above are net of Fund Management Charge P.25, total 51 pages

27 5. Investment Options I. Investment Options and Categories Currently 85 investment options of 26 categories are available (Please refer to Investment Options Leaflet for details of the currently available investment options) Investment Options Categories No. of investment options currently available 1. Short-term Bond and Money Market 3 2. Global Bond 6 3. Emerging Markets / High Yield Bond 6 4. Mixed Asset 2 5. Global Equity 3 6. Regional Equity - Europe 4 7. US Equity 2 8. Other Emerging Market Equity Regional Equity - Asia Pacific Greater China Equity Japan Equity Single Country Equity - Asia Pacific Sector Equity - Health Care Sector Equity - Communications Sector Equity - Technology Sector Equity - Consumer Goods Sector Equity - Ecology Sector Equity - Energy Sector Equity - Alternative Energy Sector Equity - Natural Resources Sector Equity - Precious Metals Sector Equity - Real Estate Sector Equity - Agriculture Sector Equity - Infrastructure Thematic Funds Futures and Options Funds 1 For the list of investment options, reference funds, investment objectives and other details of the investment options, including other fees and charges etc., please refer to the corresponding prospectus or offering documents of the reference funds P.26, total 51 pages

28 II. Investment Options Allocation Minimum allocation of investment per investment option 10% of each regular premium payment. Total percentage of the investment mix must add up to 100% Maximum number of investment options Investment Options 99 investment options per policy Allocation Instruction AXA reserves the right to change minimum allocation requirement and the maximum number of investment options by giving customers one month s prior written notice Switching or transfer of investment options between the IUA and the AUA is not allowed. Switching fee is nil. Switching of investment options is subject to the Investment Option Allocation Instruction Minimum switching amount Switching of HKD4,000 / USD500 / EUR500 / GBP320 / AUD600 / Investment Options SGD800 Subject to a minimum allocation of 10% of the switched amount. AXA reserves the right to change the minimum switching amount by giving customer one month s prior written notice P.27, total 51 pages

29 III. New Investment Options Leaflet Investment objectives of investment options are removed from this new Investment Options Leaflet due to new regulatory requirement. Consultants may refer to the Company website for the Fund Factsheets, Product Key Facts Statements and Offering Documents of the individual reference funds. Company website ( At Home > Customer Service > Downloads > Investment > Pulsar II Investment Insurance Plan Offering documents of the reference funds which correspond to the investment options are available from us upon request P.28, total 51 pages

30 6. Administration Guidelines I. New Business and Underwriting Underwriting Requirements Annual regular premium of HKD120,000 1 health question If the answer is YES, application will be rejected Annual regular premium of > HKD120,000 2 health questions If the answer(s) is/are YES, have to provide the details and/or reports Medical Underwriting Applicable Follow existing Medical Underwriting Rule Underwriting Approach Geographical and residential loading Applicable Follow existing Life Geographical and Residence Rule Occupational Loading Applicable Follow existing Occupational Rule Financial Underwriting Applicable Follow existing Financial Underwriting Rule Accidental Death Benefit (Bundle) Applicable to all occupations Application Submission Requirements Investment-Linked Assurance Scheme Application Form (Please refer to Appendix 3 for sample application form) Proposal MCV customers also need to submit signed Illustration Document for Premium Holiday Taken Immediately After The First xx Months Commencing From The Policy Date. Client Need Analysis (CNA) Important Facts Statement and Applicant s Declarations (IFS & AD) Submit Initial Premium Direct Debit Authorisation (DDA) Form (if applicable) Please refer to Compliance Bulletin for detailed GN15 requirements P.29, total 51 pages

31 II. Policy Administration Rules Customer may cancel the policy within 21 days after the delivery of the policy / issue of a notice AXA will refund the amount paid, or less if the value of the Cooling-off Period customer s investment options chosen has fallen at the time when the cancellation request is received by us and will not be entitled to the Start-up Bonus Change of Basic Plan N/A Currency Conversion Riders Addition Reducing/ Increasing Regular Premium Investment Option Allocation Investment Option Switching N/A N/A Reducing regular premium: Allowed after the MCP, customers may reduce the regular premium to no less than the Minimum Regular premium Increasing regular premium: Allowed only if the regular premium has been reduced, then the regular premium can be increased up to the original regular premium amount committed at policy issuance Please refer to Investment Options Allocation Instruction under Section 5 for details Please refer to Switching of Investment Options under Section 5 for details Allowed within 1 year from the date when the policy ceases to be in effect, except termination due to surrender Reinstatement by redating only Reinstatement Example Policy Date : 13/5/2015 Regular Premium & Policy Charges Due Date : 13/11/2015 Application of policy reinstatement : 23/2/2016 Policy Date after policy reinstatement : 13/9/2015 Customers need to repay the Surrender Value paid (if any), resume the payment of regular premium and repay the relevant Policy Charges as determined by the company P.30, total 51 pages

32 Premium Holiday Request must be made by policyholder Premium holiday will cease if the AUA value is insufficient to cover 3-month of the application Policy Charges due. Customer will be notified to resume regular premium payment Policy will lapse if AUA value is 0 (Please refer to Premium Holiday under section 3 for details) Partial Withdrawal No. of unit(s) & name(s) of investment option(s) must be stated (please refer to Partial Withdrawal under section 3 for details) Surrender Policy conservation is applicable Policy Lapsation If customers suspend regular premium during the minimum contribution period of the policy, At every 15 th of the second month after the due date for Regular premium (If 15 th is not a working day, checking will be performed on last working day immediately prior to the 15 th ) Total account value less Start-up Bonus clawback and EEC will be paid to customers Policy will lapse If customers suspend regular premium after the minimum contribution period of the policy, At 15 th of the second month after the due date for Policy Charges (If 15 th is not a working day, checking will be performed on last working day immediately prior to the 15 th ) AUA value will be paid for the outstanding Policy Charges and EEC. If AUA value is insufficient for paying the total outstanding charges, the policy will be maintained in effect until no Policy Charges can be deducted from AUA value Policy will lapse For arrangement of other policy lapsation, please refer to Grace Period and Policy Termination under section 3 for details Required Forms General Policy Service Request Investment-linked Policy Service Request Reinstatement Premium Holiday Request Policy Surrender Request Use existing Policy Service Application Form I Use existing Investment-Linked Policy Miscellaneous Application Form Request Form for Investment Option Management and Consultant Service Fee Use existing Policy Service Application Form II Use existing Premium Holiday Application For Investment-Linked Policy Use existing Application for Policy Surrender P.31, total 51 pages

33 III. Claims Death Benefit Hong Kong Residents/Foreigners Mainland China Visitors Required Form and Documents 1. Death Claim Form I 2. Death Claim Form II 3. Original death certificate 4. Copy of identification document of Insured and Beneficiary / Birth Certificate (for Insured or Beneficiary age < 18) 5. Proof of relationship between the Insured and Claimant / Beneficiary (e.g. Marriage Certificate) 6. Original Policy Document 7. Legal Guardianship Paper (if Beneficiary age < 18) 1. Death Claim Form I 2. Death Claim Form II 3. Original Notarial Certificate for Death in PRC 4. Copy of identification document of Insured and Beneficiary / Birth Certificate (for Insured or Beneficiary age < 18) 5. Proof of relationship between the Insured and Claimant / Beneficiary (e.g. Marriage Certificate) 6. Original Policy Document 7. Legal Guardianship Paper (if Beneficiary age < 18) 8. Medical Record Book from PRC 9. Certificate of Cremation / Burial of Corpse 10. Proof of de-registration of Residence Certificate 11. Travel documents, such as entry permit, passport Accidental Death Hong Kong Residents/Foreigners Mainland China Visitors Benefit Required Form and Documents 1. Newspaper clippings (if applicable) 2. Policy report(s) (if applicable) 3. Coroner s report and post-mortem report (if applicable) 1.Newspaper clippings (if applicable) 2. Policy report(s) (if applicable) 3.Coroner s report and post-mortem report (if applicable) Payee Proceeds will be paid to the legal guardian if Beneficiary < age 18 In the interest of any Beneficiary, who dies before, at the same time of or within 10 days after the Insured s Death, proceeds shall pay to the estate of the Policyowner IV. Operation Support Please contact Distribution Enquiries Hotline at for the following enquiries: New Business Underwriting Application Form Policy Administration Claims P.32, total 51 pages

34 7. AXA Proposal System I. Proposal System Launch Date Proposal Systems AWB (Online Proposal System) AWB (Offline PC) ipro Tool Kit Tablet (ipad/android) Launch Date 2 nd Jan, th Jan, nd Jan, 2015 II. Proposal Content Highlight In addition to net rate of return of 3%, 6% and 9% p.a., 0% p.a. (no-growth scenario) is added Applicable to Illustration Document & Supplementary Illustration page. P.33, total 51 pages

35 P.34, total 51 pages

36 Death Benefit and Surrender Value are presented in separate page P.35, total 51 pages

37 8. Marketing Support Items Delivery Date Remarks Materials for external customers Principal Brochure (Including Product Brochure (PB), Product Key Facts Statement (KFS) & Investment Options Leaflet (IOL)) Investment Options Info (incl. Fund Factsheets, Product Key Facts Statements & Offering Documents of the reference funds) Soft copy (Bilingual) AWB on 2 nd Jan, 2015 Soft copy (Bilingual) Corporate website on 2 nd Jan, 2015 N/A Please refer to: Customer Service > Downloads > Investment > Pulsar II Investment Insurance Plan Sales support materials for internal user Product Handbook Soft copy (English Version) AWB on 2 nd Jan, 2015 Soft copy (Chinese Version) AWB by end of the week of 5 th Jan, 2015 Print copy (English and Chinese Versions) By 21 st Jan, 2015 N/A For softcopies on AWB, please refer to: Communications and Promotions > Broker > Product Information > Pulsar II Investment Insurance Plan P.36, total 51 pages

38 9. Frequently Asked Questions and Answers Q1. Why Pulsar II consists of 2 accounts? A: Pulsar consists of 2 accounts IUA and AUA in order to provide financial flexibility to our customers. Regular premiums contributed for the minimum contribution period of the policy will be allocated in the form of units to the Initial Units Account ; any premiums contributed thereafter will be allocated to the AUA. If a customer suspends premium payment or makes withdrawal at the early stage of the policy, the account value may not be sufficient to maintain the policy in effect. Hence, the IUA is there to form the basis of Pulsar II policy such that the policy can be in effect for the longest possible period. After the minimum contribution period, customer is allowed to go on a premium holiday and may withdraw account value from the AUA in order to accommodate their emergency cash needs during the TCP. Q2. Apart from regular premium, can customers make any additional investment contribution by paying lump sum premium? A: No. Lump sum premium is not available in Pulsar II. Q3. If a Pulsar II policy is surrendered before the end of the TCP, will the Start-up Bonus paid to the policy be clawed back? A: If the policy is surrendered during the MCP within the TCP, start-up Bonus paid to the policy will be clawed back. However, if the policy is surrendered after the MCP before the end of the TCP, start-up Bonus paid to the policy will not be clawed back. However, during the EEC period, the Account Value relating to the Start-up Bonus will be subject to an EEC when calculating the Surrender Value. After the EEC period, no EEC will be charged. In the event that the policy is surrendered during the Minimum Contribution Period, the Start-up clawed back will be deducted from the IUA value in calculation of the EEC and the Surrender Value. Q4. Can customers withdraw Account Value from the IUA during the TCP? A: During TCP, no withdrawal from IUA is allowed. However, customers are allowed to withdraw account value from the AUA only during the TCP, subject to a minimum withdrawal amount of HKD4,000 / USD500 / EUR500 / GBP320 / AUD600 / SGD800 per withdrawal. If withdrawal is made from the IUA during the TCP, policy termination will be triggered and EEC will apply. Q5. What should be noted about exercising a Premium Holiday? A: Premium Holiday can only be taken after the Minimum Contribution Period of the policy. During the Minimum Contribution Period, if the relevant regular premium due is not paid after the expiry of the grace period, the policy will terminate and the EEC will apply. P.37, total 51 pages

39 During Premium Holiday, Policy Charges will remain payable while regular premium payments are suspended. This will lead to a reduction in the total amount of premiums paid and affecting the account value, the death benefit and Loyalty Bonus will thus be reduced accordingly. Consultants should remind their customers that premium holiday is a short-term solution for them to deal with financial difficulties only. Q6. After the cessation of Premium Holiday, is customer allowed to pay back the premiums suspended during the Premium Holiday? A: After the cessation of Premium Holiday, customer is required to resume regular premium only. No premiums suspended during the Premium Holiday is required to pay back. Q7. If the total Account Value drops and becomes insufficient to cover the relevant Policy Charges due during the Premium Holiday due to market fluctuations, will the policy terminate? A: If the total Account Value drops and becomes insufficient to cover the relevant Policy Charges due during the Premium Holiday due to market fluctuations, the policy may not terminate within the 31-day grace period. Regardless of a Premium Holiday has been taken or not, the policy will terminate if the Policy Charges due remain outstanding after the expiry of a grace period. Q8. After going on Premium Holiday and resumed regular premium payment for consecutive 12 months, is customer allowed to get back the Loyalty Bonus? A: After taken a premium holiday at any time during the 12 months prior to the relevant policy anniversary on which the Loyalty Bonus is payable, the entitlement to the loyalty bonus on such policy anniversary is no longer retrieved. However, if subsequently the payment of the regular premium is resumed, the entitlement to the Loyalty Bonus will be resumed. Q9. If wrong information was given in health declaration during application, how will the death claim be handled? A: We will rescind policy and reject death claim in terms of material non-disclosure. Total premium paid less any deduction of the amount by which the value of investment has fallen when rescission decision is made, will be refunded. Q10. If answer(s) to the underwriting question(s) is/ are Yes, will the application be rejected or be applied the loading? A: Yes. It is subject to the underwriting decision. P.38, total 51 pages

40 Appendix 1. Insurance Charge Rate Tables Annual Insurance Charge rate per 1,000 Standard Age Male Female Age Male Female Age Male Female P.39, total 51 pages

41 Appendix 2. - Monthly EEC Rate Table During policy month EEC rate (%) according to the chosen TCP (years) P.40, total 51 pages

42 During policy month EEC rate (%) according to the chosen TCP (years) P.41, total 51 pages

43 During policy month EEC rate (%) according to the chosen TCP (years) P.42, total 51 pages

44 During policy month EEC rate (%) according to the chosen TCP (years) P.43, total 51 pages

45 Appendix 3. Sample Application Form P.44, total 51 pages

46 P.45, total 51 pages

47 P.46, total 51 pages

48 P.47, total 51 pages

49 P.48, total 51 pages

50 P.49, total 51 pages

51 P.50, total 51 pages