[Unlimited QE] Pressure on QDAP returns may lead to a rush to lock in high guarantees (Chinese Article)
為鼓勵市民儲錢退休，政府推出合資格延期年金保單（QDAP），投保人享有稅務優惠。自推出以來，俗稱扣稅 ... >>
19/05/2020
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Qualifying Deferred Annuity Policy (QDAP) satisfies the Insurance Authority (IA)’s criteria on deferred annuity products. The policyholder of QDAP can enjoy tax deductions on the premium up to a limit of HK$60,000 deductible per year. Both the product break-even year and the rate of return can be enhanced if tax savings are considered, particularly for policyholders with high marginal tax rates. 10Life rates the products based on mainly the returns, assuming the policyholder starts paying premium at age 45.
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BOC Life | BOC Life Deferred Annuity (Fixed Term)
9.8/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Age 60 Guaranteed IRR : 2.9%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
BEA Life | BEA WiseRetire Deferred Annuity
9.8/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Age 60 Guaranteed IRR : 2.9%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
China Life | Joyous Life Deferred Annuity Plan
9.7/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Age 60 Guaranteed IRR : 2.4%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.4%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 9
Hang Seng Insurance | eIncomePro Deferred Annuity Plan (100% Guaranteed)
9.5/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
New
Age 60 Guaranteed IRR : 2.0%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.0%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
Well Link Life | Well Enjoy Deferred Annuity Plan (Supreme)
9.4/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
New
Age 60 Guaranteed IRR : 1.9%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 1.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
China Taiping | Taiping Full Shine Deferred Annuity Plan
9.2/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Age 60 Guaranteed IRR : 1.5%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.7%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 12
FWD | RetireFun Deferred Annuity Plan
8.9/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
New
Age 60 Guaranteed IRR : 0.6%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.1%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 9
YF Life | MY Deferred Annuity
8.7/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Age 60 Guaranteed IRR : 1.1%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.7%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 12
Sun Life | Foresight Deferred Annuity
8.6/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Age 60 Guaranteed IRR : 1.4%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 3.0%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 10
Tahoe Life | Shining Years Deferred Annuity Plan
8.6/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Age 60 Guaranteed IRR : 0.5%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 12
9.8/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
BOC Life | BOC Life Deferred Annuity (Fixed Term)
Age 60 Guaranteed IRR : 2.9%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
9.8/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
BEA Life | BEA WiseRetire Deferred Annuity
Age 60 Guaranteed IRR : 2.9%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
9.7/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
China Life | Joyous Life Deferred Annuity Plan
Age 60 Guaranteed IRR : 2.4%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.4%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 9
9.5/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
New
Hang Seng Insurance | eIncomePro Deferred Annuity Plan (100% Guaranteed)
Age 60 Guaranteed IRR : 2.0%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.0%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
9.4/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
New
Well Link Life | Well Enjoy Deferred Annuity Plan (Supreme)
Age 60 Guaranteed IRR : 1.9%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 1.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 8
9.2/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
China Taiping | Taiping Full Shine Deferred Annuity Plan
Age 60 Guaranteed IRR : 1.5%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.7%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 12
8.9/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
New
FWD | RetireFun Deferred Annuity Plan
Age 60 Guaranteed IRR : 0.6%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.1%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 9
8.7/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
YF Life | MY Deferred Annuity
Age 60 Guaranteed IRR : 1.1%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.7%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 12
8.6/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Sun Life | Foresight Deferred Annuity
Age 60 Guaranteed IRR : 1.4%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 3.0%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 10
8.6/10
Overall Savings Annuity Score is based on the guaranteed return, projected return and early surrender coverage. Details
Tahoe Life | Shining Years Deferred Annuity Plan
Age 60 Guaranteed IRR : 0.5%
Guaranteed Internal Rate of Return surrendering at age 60
Age 60 Projected IRR : 2.9%
Projected Internal Rate of Return surrendering at age 60
Guaranteed Breakeven Year : 12
Further Readings
QDAP (Savings) Frequently Asked Questions
What are the Insurance Authority (IA)’s criteria on QDAP?
- Minimum total premiums of HK$180,000 and minimum premium payment period of 5 years
- Minimum annuity period of 10 years
- Annuity income to start at the age of 50 or above
- Disclosure of Internal Rate of Return (IRR) of the product to allow evaluation and comparison
- Clear presentation of the guaranteed and non-guaranteed annuity payouts
- Clear separation of premiums of all riders (e.g. critical illness, hospitalisation cash, etc.) from the QDAP premiums
You may find the full details from <GL19: Guideline on Qualifying Deferred Annuity Policy> issued by IA.
How much is the tax saving?
Premium paid for QDAP is tax deductible up to a limit of HK$60,000 per year. The actual tax amount saved would depend on your marginal tax rate. For example, based on the prevailing highest tax rate of 17%, you may save up to $10,200 payable tax per year from buying QDAP.
What should I consider when choosing a deferred annuity?
An annuity product aims to protect the retirement life of the insured in the financial aspect. As you age your risk tolerance generally decreases, hence you shall focus on the guaranteed return and the longevity coverage of the annuity product. Some annuity products present attractive projected returns, but the non-guaranteed part is dependent on multiple factors including the market environment, investment performance, dividend policy, etc. and your retirement plans could be seriously affected if the non-guaranteed income is not as expected.
Would the Inland Revenue Department (IRD) recover my tax deductions if I surrender my QDAP early?
Under current arrangements, early surrender of policy would not make the tax deductions recoverable by the IRD. However, if you cancel the policy during the cooling-off period and have your paid premium refunded, you would need to pay back any tax deductions made.
Remarks:
- The above premium excludes insurance levy collected by the Insurance Authority.
- 10Life obtains public product information from different sources and applies assumptions and mathematical calculations to arrive at the product scores. All information is intended for general education purpose and reference only, and does not constitute any insurance, financial, investment or other professional purchase advice. 10Life hereby excludes any liability arising from using the information, and will not make warranty or guarantee on the accuracy, completeness and timeliness of the information or for any claims and / or losses caused thereby. You should seek independent advice before purchasing any insurance products.
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