Product ratings based on a fair mechanism designed by 10Life actuaries, providing transparency and unbiased analyses guiding you to find the right insurance
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Product ratings based on a fair mechanism designed by 10Life actuaries, providing transparency and unbiased analyses guiding you to find the right insurance
Insurers are obligated to pay the guaranteed income as a living benefit to the policyholder. 10Life calculates the guaranteed cash flow by considering the premium paid and guaranteed income in the scenario that the policyholder is alive at the age of 105.
10Life calculates the present value (PV) of income received versus premium paid discounted by the risk-free rates assuming the policy commences today. Risk-free rates of different currencies are determined by the long-term yields of the respective government bonds.
USD: United States Treasury Bonds
HKD: Hong Kong Exchange Fund Notes
The risk-free rates may be updated from time to time to reflect changes in the market.
The Guaranteed Return Score is calculated by the ratio of PV of income received and PV of premium paid, compared against the benchmark.
Ratio =
PV (Guaranteed income received at age 105)
，using risk free rate as discount factor
PV (Premium paid)
5. Projected Return Score Details
Some products offer a non-guaranteed income for the policyholder in the policy projection, which is subject to change by the insurer. 10Life calculates the projected cash flow by considering the premium paid and projected income in the scenario that the policyholder is alive at the age of 105.
10Life calculates the present value (PV) of income received versus premium paid discounted by the market rates assuming the policy commences today. Risk-free rates of different currencies are determined by the long-term yields of the respective government bonds.
USD: United States Treasury Bonds
HKD: Hong Kong Exchange Fund Notes
We then use the Capital Asset Pricing Model (CAPM) to derive market rates of the respective currency. The risk-free rates and market risk assumptions may be updated from time to time to reflect changes in the market.
The Guaranteed Return Score is calculated by the ratio of PV of income received and PV of premium paid, compared against the benchmark.
Ratio =
PV (Projected income received at age 105)
，using market rate as discount factor
PV (Premium paid)
Since the implementation of GL16 in early 2017, insurers are required to disclose fulfillment ratios of non-guaranteed dividends or bonuses. However, current published data available in the market mainly cover the fulfillment ratios of the first few policy years, making it insufficient to determine the ability of insurers fulfilling these long-term non-guaranteed returns. Moreover, products and market assumptions are constantly changing, making it difficult to predict future returns based on past returns. Therefore, 10Life does not take published fulfillment ratios into the calculations of the Projected Return Score.
6. Longevity Coverage Score Details
Retirees face the risk of their assets being exhausted during their lifetime, which is more likely to happen if the individual lives longer than expected. Hence, annuity coverage is particularly important at later ages.
Based on the coverage term, 10Life scores longevity coverage based on the following scale.
Coverage until
10Life Score
Lifetime
10
Age 100
9
Age 85
6
Below Age 85
0
7. Early Surrender Coverage Score Details
While the intended use of annuity insurance is not for early cash out, there may be cases where an urgent unexpected use of cash is required after purchasing the product. 10Life calculates the Early Surrender Coverage Score based on the guaranteed benefit per premium paid in the following scenarios:
Surrender at the 10th policy year
Surrender at the 20th policy year
Guaranteed benefit per premium paid is calculated by the following formula.
Guaranteed benefit per premium paid
=
Guaranteed income received (if any) + Guaranteed cash value
Total premium paid
The Early Surrender Coverage Score is based on the average of these 2 scenarios.
8. Early Death Coverage Score Details
The main purpose of an annuity product is to mitigate longevity risk. However, in the unfortunate event that the insured dies during the early policy years before breaking even, most annuity products offer a death benefit either as a lump sum payout or a guaranteed continued annuity payout to the beneficiary. 10Life calculates the Early Death Coverage Score based on the guaranteed benefit per premium paid in the following scenarios:
Death at the 10st policy year
Death at the 20th policy year
Guaranteed benefit per premium paid is calculated by the following formula:
Guaranteed benefit per premium paid
=
Guaranteed income received (if any) + Guaranteed death benefit
Total premium paid
The Early Death Coverage Score is based on the average of the 2 scenarios.
Updated on 28 December 2020.
Disclaimer
10Life Product Comparison and 10Life Insurance Ratings are developed by 10Life Financial Limited, an authorised insurance broker company licensed with the Insurance Authority under License Number FB1526. 10Life Product Comparison and 10Life Insurance Ratings are developed for generic customer segments using mathematical calculations based on product information, facts and data, and are not influenced by any partnerships with or fees received from insurance companies.
Any information on 10Life Platform ("10Life Information"), including but not limited to Product Comparison, Product Ratings, Blog Articles are intended for general education purpose and reference only. None of the 10Life Information is intended, nor should they be considered or relied upon, as regulated advice, insurance, financial, investment or professional advice, recommendation, approval, endorsement, invitation or solicitation in respect of any insurance, financial or investment products. 10Life Information does not take into account your individual needs. Reading 10Life Information should not be considered as conducting a suitability assessment, and is not sufficient to form the basis of any decisions to purchase any insurance products. You should rely on information authorised by insurance companies, carry out your own research and/or seek independent advice from licensed intermediaries before purchasing any insurance products or making any insurance decisions. While reasonable effort is used when collecting, validating and updating 10Life Information from various channels, none of 10Life Group and its subsidiaries, affiliates, agents, directors, officers and employees will be responsible for any liability, claim or loss arising from or associated with you using 10Life Information. No warranty, representation or guarantee is given by 10Life Group and its subsidiaries on the accuracy, completeness and timeliness of the information.
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