FTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge

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FTLife launches Prosperous Deferred Annuity Plan 2 for customers’ retirement need with tax deduction

 

  • In survey, 70% said
    they lack confidence in retirement due to pandemic, four times that pre-Covid
    level. Top three retirement worries are rising medical expenses (53%), lack of
    stable income (52%) and managing expenses (50%);
  • High market
    volatility arouses risk-adverse sentiment among Hongkongers. 37% of the
    respondents prefer to hold cash savings, especially for young people aged
    between 20 and 29 (62%). Around a quarter are more interested in capital
    guaranteed or low risk investment. Many people are re-examining their
    retirement needs, with 62% of the respondents expressing interest in
    subscribing to a qualifying deferred annuity plan in the coming year.
  • FTLife is launching
    Prosperous Deferred Annuity Plan 2, which is open to customers who are 20 years
    old or above. The guaranteed breakeven
    period is as short as eight years [1]and the range of total internal rate of return at maturity between 3.28%
    to 4.32% [2] ,
    so as to encourage different customers, especially the younger generation, to
    start their retirement planning early for a better future.

 

HONG KONG SAR – Media OutReach – 25 January 2021 –
FTLife Insurance Company Limited (“FTLife”) commissioned a market research
company to conduct “Retirement Planning and Confidence Survey” in December 2020.
The survey interviewed 405 working adults aged 20 or above to understand how
the pandemic affects Hongkongers’ retirement planning, wealth
management preference
and behaviours.

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FTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge

FTLife launches Prosperous
Deferred Annuity Plan 2 (Prosperous 2) today. From now until 31 March 2021,
customers who successfully subscribe to Prosperous 2 as well as one of the designated
Voluntary Health Insurance Scheme plans or insurance plans (basic plan/rider)
can enjoy up to 15% of first-year premium refund. The minimum issue age of
Prosperous 2 is 20 years old and the range of total Internal Rate of Return at
maturity can be up to 3.28% to 4.32%, helping customers achieve a stable and
independent retirement life.

COVID-19 pandemic has deeply
impacted the global economy. The survey revealed increased pessimistic about
retirement among respondents since the start of the pandemic. Before the outbreak,
around 16% said that they lacked confidence in retirement. During the pandemic,
the number quadrupled to around 70%, illustrating how the pandemic has
intensified Hongkongers’ worries about retirement. The top three worries cited are
rising retirement medical expenses (53%), a lack of stable income post-retirement
(52%) and greater difficulty coping with retirement expenses (50%).

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Younger generation fall short
on mid- to long-term financial planning

 

About a quarter (24%) of the
respondents said their investment awareness has improved due to the uncertain
economy. However, two fifths (41%) are concerned about not making good investment
decisions in the current volatile market owing to a lack of market and
investment knowledge.

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This is especially true among the
younger generation. Half (52%) of the younger respondents (aged 20 to 29) said
they lacked knowledge on investment products and nearly three fifths of them (59%)
said they did not know how to do mid- to long-term financial planning. Almost
three quarters (73%) said they have no regular saving habits.

 

Only 17% of those respondents aged
30 and over said they have no regular saving habits, with 40% saying they did
not know how to do such financial planning. That said, about one-third (35%) of
this group said that they didn’t have enough knowledge about investment products.

 

Hongkongers increasingly risk-averse

 

Due to the volatile market and the
pandemic, Hongkongers have become more risk-adverse leading to the adoption of more
conservative investment strategies. Nearly two fifths (37%) of those surveyed
prefer to hold cash savings, especially those aged
between 20 and 29
(62%). A quarter (25%) of the respondents are more
interested in capital guaranteed or low risk investment.

 

As the pandemic continues and dents
Hongkongers’ confidence in retirement, more respondents expressed their desire
for a stable income in retirement (55%) and acknowledged that qualifying deferred
annuity plan is a suitable first step of retirement planning (41%).

 

FTLife Chief Commercial
Officer and Chief Product Officer Christine Yeung
said:
“Our latest survey found that Hongkongers’ confidence in retirement dropped during
the pandemic and many young people did not have regular saving habits. This may
result in missing the best timing to save for retirement and to achieve the rolling
effect of compound interest. Regardless of any economic cycle, it is best to
plan retirement early. For Hongkongers with limited amount of capital and little
investment experience, they can consider subscribing to a qualifying deferred annuity plan to start saving
early. They can enjoy tax deductions while taking the first step to plan for
retirement.”

 

With regard to the public’s retirement needs
under the pandemic, FTLife further investigated the public’s acceptance rate of
a qualifying deferred annuity plan in the
survey. The pandemic has prompted people to review their retirement protection
needs. More than three fifths (62%) of the respondents are interested in subscribing
to a qualifying deferred annuity plan in the
coming year. The most attractive features of such a plan include: stable income
in retirement (82%), regulatory supervision (53%), payment in installments involving
smaller amounts (47%), tax deductions (45%), higher guaranteed cash value and
lower investment risk (30%).

 

Minimum issue age of 20 for
FTLife’s Prosperous 2 helps customers plan ahead

 

In response to increasing public demand of worry-free retirement, FTLife
is launching the Prosperous Deferred Annuity Plan 2 ( Prosperous 2) and setting
the minimum issue age at 20 years old. This will allow customers to start their
retirement planning at an early age and enjoy tax deductions at the same time.

 

Prosperous 2 is certified by the Insurance Authority as a
tax-deductible qualifying deferred annuity policy, with options for Premium
Payment Period and Accumulation Period. Customers can accelerate potential
wealth growth through guaranteed cash value and non-guaranteed terminal
dividend [3] . The guaranteed breakeven period can be as short as eight years1
and the range of total internal rate of return at maturity is between 3.28% to
4.32% 2 . During the annuity period, Prosperous 2 provides two extra protection
that are exclusive [4] in
the market: Travel Accidental Benefit and Terminal Illness Benefit.

 

Ms. Yeung added: “Prosperous Deferred Annuity
Plan has been welcomed by customers since its launch. The enhanced version is being
launched during this special period to meet market demand and provide
Hongkongers with a simple but reassuring retirement plan. This is to encourage
more people to plan their retirement ahead, benefit from compound interest
return for a longer period, and utilise the best time to save for retirement.
With the diversified Voluntary Health Insurance Scheme that FTLife offers, we
are confident to provide customers of different ages an ideal retirement
planning package, helping customers achieve a stable and independent retirement
life while protecting capital and against health risks.”

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From now until 31 March 2021, customers who
successfully subscribe to Prosperous 2 as well as one of the designated Voluntary
Health Insurance Scheme plans or insurance plans [5] (basic plan/rider) can enjoy up to 15% of first-year premium refund [6] .

Important notes:

  • The
    information contained in this press release is intended as a general summary of
    information for reference only. For details, please refer to relevant product
    brochures and client incentive leaflet. Please refer to the policy provision
    for full terms and conditions about FTLife “Prosperous Deferred Annuity Plan
    2”.
  • This
    press release does not contain the full provisions of Prosperous Deferred Annuity
    Plan 2 and the above-mentioned designated insurance plans, and the full terms
    can be found in the Policy documents.
  • Prosperous
    Deferred Annuity Plan 2 and the above-mentioned designated insurance plans may
    be purchased as   a standalone plan
    without bundling with other type(s) of insurance product.
  • Prosperous
    Deferred Annuity Plan 2 is a qualifying deferred annuity policy, but this does
    not mean that the qualifying deferred annuity premiums paid by the policyholder
    and relevant persons are eligible for tax deduction. The nature of qualifying
    deferred annuity policy for this product depends on the product characteristics
    and the certification issued by the Insurance Authority, and not on the
    individual circumstances of the policyholder and related persons. Policyholders
    and the relevant persons should meet all eligibility requirements under the
    Inland Revenue Ordinance of the Hong Kong Special Administrative Region Inland
    Revenue Department before claiming tax deductions. For
    details on tax deductions, please visit Inland Revenue Department of HKSAR
    website www.ird.gov.hk and
    consult your tax and accounting advisors for tax advice.
  • FTLife does not provide any tax, legal or
    accounting advice or consultation. If you have any questions, please seek
    professional advice from your independent tax, legal and accounting advisors.
    The information in this press
    release does
    not constitute any tax advice.
  • For
    further details, please contact FTLife’s Customer Service Hotline on +852 2866
    8898.
  • This
    document is for distribution in Hong Kong only. It is not an offer to sell or
    solicitation to buy or provision of any insurance product outside Hong Kong.
    FTLife does not offer or sell any insurance product in any jurisdiction outside
    Hong Kong, in which such offering or sales of the insurance product is illegal
    under the laws of such jurisdictions.
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[1] Calculated based on
the 5-year premium payment period and annual premium payment mode. Guaranteed
break even period refers to the policy year that the guaranteed cash value is
equal to or greater than the premium paid for the first time (refers to the
total amount of premium(s) due and paid for the basic plan. If customer partially
surrenders this Policy, the total premiums paid will be proportionately
reduced.).

[2] Calculation of total
internal Rate of Return at maturity includes Guaranteed Monthly Annuity Payment
and Non-guaranteed Monthly Annuity Payment, and assumes that the Annuitant
receives annuity payment on a monthly basis. Assuming the Annuitant is a 45
years old non-smoker male at application, 3.28% of total Internal Rate of
Return at maturity is calculated based on 9-year premium payment period with
monthly premium payment mode and 10 years of accumulation period. While 4.32%
of total Internal Rate of Return at maturity is calculated based on 5-year
premium payment period with annual premium payment mode and 30 years of
accumulation period. This is calculated on a best estimate basis which is based
on the current dividend scale and assume no cash withdrawal or policy loan
during the entire policy and all premiums have been paid in full within the
premium payment period. The current dividend scale does not reflect future
performance and is non-guaranteed. Please refer to the policy provisions for
details.

[3] Terminal Dividend is
non-guaranteed and will be paid upon policy termination (except maturity) and
partial surrender. Please refer to the policy provisions for details of
Terminal Dividend.   

[4] The
“Market Exclusive” item is the result comparing similar Qualifying Deferred
Annuity Plan policies of major life insurance companies in Hong Kong, until 25
January 2021. During Annuity Period, under the protection of (A) Travel Accidental
Benefit, disability of the Annuitant resulted from oversea accidents will be
compensated and (B) Terminal
Illness Benefit, the Annuitant is diagnosed with Terminal Illness will receive up to 12
months of additional installment payments, are both exclusive in the market .

[5] Voluntary Health Insurance
Scheme Series: “TopCare” Medical Insurance Plan and “BetterCare” Medical
Insurance Plan; other designated insurance plans include Regent Insurance Plan
2 Series, Regent Prime Insurance Plan (Premier), Regent Elite Insurance Plan
(Premier), “HealthCare 168 Plus” Critical Illness Protector, MediGold Plus Insurance Plan and “On Your Mind”
Insurance Plan.

[6] Subject to terms and
conditions, please refer to the promotional brochure for details.

About FTLife Insurance Company Limited

FTLife Insurance Company Limited (“FTLife”) is one of the most
well-established life insurance companies in Hong Kong and a wholly-owned
subsidiary of NWS Holdings Limited. Building on a history of more than 30 years
in the territory, FTLife provides individual and institutional clients with a
diverse range of insurance and wealth management products and services,
including life, health, accident, savings and investment insurance. As a member
of New World Group, FTLife works with diversified businesses within the Group
to create synergies and provides customers with best-in-class life-planning
solutions, from wealth management and succession to health, wellbeing and
quality of life enhancement.

 

About
“Retirement Planning and Confidence Survey”

FTLife Insurance Company Limited (“FTLife”)
commissioned a market research company to conduct “Retirement Planning and
Confidence Survey” to understand how the pandemic affects Hong Kong people
retirement planning, investment preference and behaviours. The survey was
conducted in December 2020 to collect data from 405 working people aged 20 or
above through street interviews. The survey mainly targets people with personal
monthly income above HK$20,000.

FTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge

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FTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge - Brand SpurFTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge - Brand Spur

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FTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge - Brand SpurFTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge - Brand Spur

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FTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge - Brand Spur

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FTLife survey shows Hongkongers far less confident about retirement due to pandemic, while younger generation lacks wealth management knowledge - Brand Spur
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