[Make the choice for your child first] Plan early to achieve both a worry-free retirement and your child’s overseas study.

Everyone faces different choices throughout life. When we are young, we may worry about whether to have Chinese or Western food for lunch. As we grow older, we must decide which faculty or department to study at university, or even what kind of job to choose in our careers. Some important choices can affect the direction of life for decades to come.

Some of the choices we make can even affect the lives of those around us. This is especially true for parents, who need to plan for their children’s future while also starting to think about their own retirement planning. This may seem like a choice that cannot be achieved at the same time, but in fact, with early planning and by selecting the right financial tools, it is possible to achieve both.

Johnson, a 40-year-old senior executive at a listed company, has a 3-year-old son, Ivan. Johnson wants to have options in the future, so while he is still in the prime of his career, he starts planning early for his son’s future university expenses and paving the way for his own retirement. He therefore took out Sun Life’s 萬年青•星河尊享計劃, with total premiums of US$500,000 (approximately HK$3.9 million), payable over 5 years, in preparation for the future.

As time passes, 15 years later, Ivan is already 18 and plans to study overseas. As everyone knows, overseas education is expensive and can easily cost over a million dollars. At this point, Johnson’s 萬年青•星河尊享計劃 comes into play. He decides to withdraw US$100,000 (approximately HK$780,000) each year for 5 years (Note 1), totalling US$500,000 (approximately HK$3.9 million), to cover Ivan’s living expenses for his 5 years of study abroad. In effect, the total amount withdrawn already equals the total premiums paid, so every dollar withdrawn thereafter is essentially pure gain.

Five years later, Ivan has graduated at 23 and plans to stay abroad to develop his career. Johnson, now 60, also sees that his son has grown up and decides to retire early and enjoy retirement life overseas with his wife Cindy. He therefore withdraws US$45,000 (approximately HK$351,000) per year from 萬年青•星河尊享計劃 as a self-generated pension. Under the most ideal circumstances, he could continue withdrawing until he reaches 120.

Johnson’s case shows that, with early planning, middle-aged individuals can successfully turn two options that may seem difficult to achieve together — “retiring with peace of mind” and “sending their children overseas for university studies” — into a true “have the best of both worlds” outcome.

萬年青 • 星河尊享計劃 is available with 2-year and 5-year premium payment terms, offering long-term savings and growth potential, with guaranteed cash value and non-guaranteed bonuses. The guaranteed cash value can help build wealth steadily, and from the 3rd policy year onwards, it provides stable returns until the life insured reaches the age of 120 or the policy is terminated. The reversionary bonuses and terminal bonus, which form the non-guaranteed portion, offer long-term growth potential.

If you wish to lock in potential returns earlier and make wealth growth more certain, 萬年青 • 星河尊享計劃 features a Value Lock-in Option. Each time the policy owner exercises the Value Lock-in Option, part of the policy’s value will be transferred to the Value Lock-in Account and accumulate at an annual interest rate of 3.5% (Note 2). The policy owner may choose to lock in 10% to 50% of the policy’s value each time, giving greater certainty over wealth growth.

萬年青 • 星河尊享計劃 offers wealth transfer features, meaning that even if the life insured passes away, the policy can be passed on to the next generation in an orderly manner. One of the plan’s features is that it offers six death benefit payment options, including a full lump-sum payment, full instalment payments, partial instalment payments, a market-first partial instalment payment until the beneficiary reaches a specified age, full increasing instalment payments, and a continuation option. Under the continuation option, upon the death of the life insured, the policy can be split according to proportions pre-selected by the policy owner, enabling each beneficiary to become the policy owner of their respective policy (if applicable) and the life insured. Coupled with the currency conversion option, the policy can be held and accumulated in different currencies, ensuring the next generation can make good use of the wealth. 

In the above cases, after Ivan went abroad to study at the age of 18, and after Johnson retired at the age of 60, all living expenses needed to be paid in local currency. 萬年青 • 星河尊享計劃 offers currency conversion across four policy currencies, including US dollars, Canadian dollars, British pounds or Renminbi, allowing the policy owner to avoid the inconvenience of using different currencies.

In addition, while overseas transfers to bank accounts usually involve a host of fees, 萬年青 • 星河尊享計劃's overseas transfer service (Note 3) allows the policy owner to withdraw funds from the policy and remit them to an overseas bank account held in their own name, with one related remittance bank fee waived each year, helping the policy owner reduce unnecessary expenses.

Notes:

1. Any withdrawal exceeding the total of the accumulated reversionary bonus cash value balance and the value in the value lock-in account will be deducted from the guaranteed cash value and the cash value of the terminal bonus. This will reduce the policy’s face amount and be regarded as a partial surrender, thereby lowering the long-term value of the policy.
2. This annual interest rate applies to USD policies and is non-guaranteed, and is determined by Sun Life Hong Kong Limited from time to time. The non-guaranteed annual accumulation interest rate applicable to different policy currencies may vary.
3. Overseas transfer service is an administrative service provided by a third-party bank/service provider. This service is not guaranteed, and Sun Life Hong Kong Limited may amend or terminate this service without prior notice. Overseas transfer service is subject to applicable laws, regulations and guidance issued by the regulators of the relevant jurisdictions. Sun Life Hong Kong Limited shall not be responsible for any acts, omissions or negligence of the relevant third-party bank/service provider. Sun Life Hong Kong Limited shall also not be liable for any loss or damage, costs or other expenses arising directly or indirectly from or caused by this service.

The market information contained in this article is based on what is believed to be reliable sources, but Sun Life Hong Kong Limited (a limited liability company incorporated in Bermuda) does not guarantee its accuracy or completeness, and shall not be responsible for any losses incurred. This article is for general reference only. It does not constitute any guarantee or professional advice of any kind. This article does not constitute any recommendation, offer or invitation. This article shall not be used as the basis for any agreement to sell or purchase any product.

The plan is subject to the terms and conditions. This article is intended for distribution in Hong Kong and shall not be construed as an offer to sell, a solicitation to purchase, or the provision of any product of Sun Life Hong Kong Limited outside Hong Kong. The information contained herein is for the product summary only. For details of the interpretation, full terms and benefits, key product risks and exclusions, please refer to the sample policy documents. We will provide the relevant documents upon your request. If there is any inconsistency between this product summary and the policy documents, the policy documents shall prevail. 

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.