10Life Long Term Savings Scoring Methodology

1. Overview

Guaranteed Return

Based on the guaranteed cash value that the insurance company is obliged to pay.

Projected Return

Based on the projected cash value under the base scenario

Insurer Dividend Fulfilment Score

Based on the the dividend fulfilment by insurers reported in 2022

2. 10Life Score Weighting

10Life score is designed to compare products based on different insurance needs and objectives. 10Life score weighting varies according to the insurance objectives and target horizon, and is tabulated as follows:

Objective	Target Period	Guaranteed Return Score	Projected Return Score	Insurer Dividend Fulfilment Score
Golden 10 Years	10 Years	40%	50%	10%
Education	20 Years	30%	60%	10%
Retirement	30 Years	20%	70%	10%
Legacy	60 Years	10%	80%	10%

3. Assumptions

Male non-smoker age 35;
Total premium payments USD100,000;
No policy loan taken and no withdrawals of cash value and/or interest throughout the policy term.

4. Return Score Details

Guaranteed return is one of the key differentiators between buying a mutual fund and a savings insurance product. In assessing the attractiveness of the products, 10Life compares the guaranteed return, as well as the projected return (pessimistic) and projected return (base), to reflect different risk levels at the end of the specified policy period, benchmarked against the market. The detailed methodology is as follows:

4.1. The Levels of Risk Reflected

Three levels of risk are used for assessing the savings return after the policy is in force for a certain period of time.

	Is this return guaranteed?	Includes all guaranteed benefits?	Includes non-guaranteed benefits?	Cash Values Measured
Guaranteed Return Score	Y	Y	N	The minimum cash values obligated by the insurer at the end of the specified policy period.
Projected Return Score	N	Y	Y	Cash values assumed under the current “Base Case Scenario” by the insurer in the policy proposal.

4.2. Compare the Cash Values

The two return scores measure the 10/20/30/60-year cash values, assuming the policyholder withdraws the total cash value (including guaranteed & non-guaranteed values) as a lump sum at the end of the 10/20/30/60th policy year.

4.3. Benchmark Return against the Market

For each of the three return scores, the 99th percentile of cash values in the market is used as benchmark. To assess the attractiveness of the returns, the return score is calculated as the 10/20/30/60-year cash value vs the respective benchmark. The benchmarks may be updated from time to time to reflect changes in the market.

5. Insurer Dividend Fulfilment Score Details

Since the implementation of GL16 in early 2017, insurers are required to disclose fulfilment ratios of non-guaranteed dividends/bonuses. In early years, the published data available in the market mainly cover the fulfilment ratios of the first few policy years, making it insufficient to determine the ability of insurers fulfiling the long term nature of these non-guaranteed returns. Moreover, products and market assumptions are constantly changing, making it difficult to predict future returns based on past returns.

In spite of the difficulty, starting 2024, 10Life considers the published fulfilment ratios into the calculation to better compare long term savings products.

Insurer dividend fulfilment score depends on the following factors:

Average dividend fulfilment ratio
Frequency of dividend fulfilment ratio lower than 70%
Experience

6. Long Term Savings Insurance 5-Star Rating

10Life Long Term Savings Insurance 5-Star Rating is awarded to the top products under three common financial goals of whole life savings insurance for the policyholder:

Golden 10 Years
Education funding
Retirement planning
Legacy planning

Each financial goal has its own specified target period, premium payment term and risk preference. The 5-Star Rating criteria for each category are summarised below.

Objective	Target period	Premium payment terms	Guaranteed return ratio	Projected return ratio	Insurer dividend fulfilment score
Golden 10 Years	10 Years	Single-Pay, including Pre-payment	At least 100%	At least 1.35-fold	9.5 or above
Education funding	20 Years	5-12 Years	At least 100%	At least 2- to 2.4- fold, depending on the premium payment terms	9.0 or above
Retirement planning	30 Years	10-18 Years	At least 100%	At least 3- to 4- fold, depending on the premium payment terms	8.5 or above
Legacy planning	60 Years	1-20 Years	At least 100%	At least 19- to 42- fold, depending on the premium payment terms	8.5 or above

Updated on Jan 1, 2024

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.

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Long Term Savings Insurance Scoring Methodology