This is a participating insurance plan designed to be held long term. Your premiums will be invested in a variety of assets according to our investment strategy, with the cost of policy benefits (such as charges to support guarantees) and expenses deducted as appropriate from premiums or assets. Your policy can share the divisible surplus (if any) from related product groups determined by us. We aim to ensure a fair sharing of profits between policy owners and shareholders, and among different groups of policy owners.

Future investment performance is unpredictable. Through our smoothing process, we aim to deliver more stable dividend payments by spreading out the gains and losses over a longer period of time. Stable dividend payments will ease your financial planning.

We will review and determine the dividend amounts to be payable to policy owners at least once per year. The actual dividends declared may be different from those illustrated in any product information provided (e.g. benefit illustrations). If there are any changes in the actual dividends against the illustration or in the projected future dividends, such changes will be reflected in the policy anniversary statement.

A committee has been set up to provide independent advice on the determination of the dividend amounts to the Board of the Company. The committee is comprised of members from different control functions or departments within the organisation both at AIA Group level as well as Hong Kong local level, such as office of the Chief Executive, legal, compliance, finance and risk management. Each member of the committee will exercise due care, diligence and skill in the performance of his or her duties as a member. The committee will utilise the knowledge, experience, and perspectives of each individual member to assist the Board in the discharge of its duty to make independent decision and to manage the risk of conflict of interests, in order to ensure fair treatment between policy owners and shareholders, and among different groups of policy owners. The actual dividends, which are recommended by the Appointed Actuary, will be decided upon the deliberation of the committee and finally approved by the Board of Directors of the Company, including one or more Independent Non-Executive Directors.

To determine the dividends of the policy, we consider both past experiences and the future outlook for all the factors including, but not limited to, the following:

Investment returns: include interest earnings, dividends and any changes in the market value of the product’s backing assets. Depending on the asset allocation adopted for the product, investment returns could be affected by fluctuations in interest income (both interest earnings and the outlook for interest rates) and various market risks, including credit spread and default risk, fluctuations in equity prices, property prices and foreign exchange currency fluctuation of the backing asset against the policy currency.

Claims: include the cost of providing death benefits and other insured benefits under the product(s). 

Surrenders: include policy surrenders, partial surrenders and policy lapses; and the corresponding impact on the investments backing the product(s).

Expenses: include both expenses directly related to the policy (e.g. commission, underwriting, issue and premium collection expenses) and indirect expenses allocated to the product group (e.g. general administrative costs).

Some participating products (if applicable) allow the policyholder to leave annual dividends, guaranteed and non-guaranteed cash payments, guaranteed and non-guaranteed incomes, guaranteed and non-guaranteed annuity payments with us, potentially earning interest at a non-guaranteed interest rate. To determine such interest rate, we consider the returns on the pool of assets in which the annual dividends, guaranteed and non-guaranteed cash payments, guaranteed and non-guaranteed incomes, guaranteed and non-guaranteed annuity payments are invested with reference to the past experience and future outlook. This pool of assets is segregated from other investments of the Company and may include bonds and other fixed income instruments.

For dividend bonus philosophy and dividend / bonus history, please visit our website at https://www.aia.com.hk/en/dividend-philosophy-history.html

Our investment philosophy is to deliver stable returns in line with the product’s investment objectives and AIA’s business and financial objectives.

Our investment policy aims to achieve the targeted long-terminvestment results and minimise volatility in investment returns over time. It also aims to control and diversify risk exposures, maintain adequate liquidity and manage the assets with respect to the liabilities.

Our current long-term target strategy is to allocate assets attributed to this product as follows:

• Bonds and other fixed income instruments 50%-100%
• Equity-like assets 0%-50%

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Our investment strategy is to actively manage the investment portfolio i.e.: adjust the asset mix in response to the external market conditions. The proportion of equity-like assets would be lower when interest rate level is low and would be even lower than the long-term target strategy so to protect the guaranteed liability and to minimise volatility in investment returns over time, and vice versa when interest rate is high.

The bonds and other fixed income instruments predominantly include government and corporate bonds, and are mainly invested in the geographic region of the United States and Asia-Pacific (excluding Japan). Equity-like assets may include listed equity, mutual funds and direct / indirect investment in commercial / residential properties, which are mainly invested in Asia. Equity-like assets may also include private equity, which is typically invested in the United States. Returns of equity-like assets are generally more volatile than bonds and other fixed income instruments. Subject to our investment policy, material amount of derivatives may be utilised to manage our investment risk exposure and for matching between assets and liabilities.

Our currency strategy is to minimise currency mismatches. For bonds or other fixed income instruments, our current practice is to currency-match their bond purchases with the underlying policy denomination on best-efforts basis (e.g. US Dollar assets will be used to support US Dollar liabilities and HK Dollar assets will be used to support HK Dollar liabilities). Subject to market availability and opportunity, bonds may be invested in currency other than the underlying policy denomination and currency swap will be used to minimise the currency risks. Currently assets are mainly invested in US Dollar. For equity-like assets, currency exposure depends on the geographic location of the underlying investment where the selection is done according to our investment philosophy, investment policy and mandate.

We will pool the investment returns from other long term insurance products (excluding investment linked assurance schemes and pension schemes) together with this participating insurance plan for determining the actual investment and the return will subsequently be allocated with reference to the target asset mix of the respective participating products. Actual investments (e.g. geographical mix, currency mix) would depend on market opportunities at the time of purchase. Hence it may differ from the target asset mix.

The investment strategy may be subject to change depending on the market conditions and economic outlook. Should there be any material changes in the investment strategy, we will inform policy owners of the changes, with underlying reasons and impact to the policies.

1. You should pay premium(s) on time and according to the selected premium payment schedule. If you stop paying the premium before completion of the premium payment term, you may surrender the policy, otherwise, the premium will be covered by a loan taken out on the policy automatically. When the loan balance exceeds the sum of guaranteed cash value and accumulated Annual Dividends with interest (if any) of the basic plan, the policy will terminate and you will lose the cover. The surrender value of the policy will be used to repay the loan balance, and we will refund any remaining value.

2. The plan may make certain portion of its investment in equitylike assets. Returns of equity-like assets are generally more volatile than bonds and other fixed income instruments, you should note the target asset mix of the product as disclosed in this product brochure, which will affect the dividend on the product. The savings component of the plan is subject to risks and possible loss. Should you surrender the policy early, you may receive an amount considerably less than the total amount of premiums paid.

3. You may request for the termination of your policy by notifying us in written notice. Also, we will terminate your policy and you / the insured will lose the cover when one of the following happens:

   • the insured passes away, except when the contingent insured becomes the new insured;
   • you do not pay the premium within 31 days (or up to 365 days under Unemployment Benefit) of the due date and the policy has no cash value (Only applicable for a 5-year or 10-year premium payment policy); or
   • any benefit is paid under the basic plan or add-on plan that triggers termination of the policy ; or
   • the outstanding debt exceeds the guaranteed cash value of your policy. Where the premium is covered by a loan taken out on the policy automatically, the outstanding debt exceeds the sum of guaranteed cash value and accumulated Annual Dividends with interest (if any) of your policy.

4. We underwrite the plan and you are subject to our credit risk. If we are unable to satisfy the financial obligations of the policy, you may lose your premium paid and benefits.

5. You are subject to exchange rate risks for plans denominated in currencies other than the local currency. Exchange rates fluctuate from time to time. You may suffer a loss of your benefit values and the subsequent premium payments (if any) may be higher than your initial premium payment as a result of exchange rate fluctuations. You should consider the exchange rate risks and decide whether to take such risks.

6. Your current planned benefit may not be sufficient to meet your future needs since the future cost of living may become higher than they are today due to inflation. Where the actual rate of inflation is higher than expected, you may receive less in real terms even if we meet all of our contractual obligations.

Accidental Death Benefit will not cover any conditions that result from any of the following:

• self-destruction while sane or insane, participation in a fight or affray, being under the influence of alcohol or a non-prescribed drug
• war, service in armed forces in time of war or restoration of public order, riot, industrial action, terrorist activity, violation or attempted violation of the law or resistance to arrest
• racing on wheels or horse, scuba diving
• ptomaines or bacterial infection (except pyogenic infection occurring through an accidental cut or wound)
• air travel, including entering, exiting, operating, servicing or being transported by any aerial device or conveyance (except as a passenger of a commercial passenger airline on a regular scheduled passenger trip over its established passenger route)

The above list is for reference only. Please refer to the policy contract of this plan for the complete list and details of exclusions.

You must be employed under a continuous contract for not less than 24 months and be eligible for a severance payment upon termination under the employment or labour laws of Hong Kong or Macau (according to the place of policy issuance) prior to the involuntary unemployment. Further, such employment cannot be self-employment, employment by a family member (including spouse, parent, grandparent, child or grandchild) or employment as a domestic servant. The Unemployment Benefit starts on the premium due date at the time when we approve your claim and continues for up to 365 days. Proof of continuous unemployment is required by you upon our request. The Unemployment Benefit is not available if you were informed of your pending involuntary unemployment on or before the issue date or commencement date of the policy, whichever is later.

The Unemployment Benefit will cease on the earliest of the following dates:

i. at the end of extended grace period,

ii. you fail to provide proof of continuous unemployment upon our request,

iii. the date on which the policy owner has been changed,

iv. the date on which any claims on waiver of premium under your basic plan is approved,

v. at the end of premium payment term of your basic plan,

vi. the date when any withdrawals or claims of your basic plan and / or add-on plans is made, if the premium payment mode after the payment of benefits is not monthly,

vii. the date when you pay all outstanding premiums and

viii. termination date of your basic plan.

Claim for Unemployment Benefit must be submitted within 30 days of your involuntary unemployment.

The Unemployment Benefit could only be claimed once per policy and relevant proof is required. The approval of the Unemployment Benefit is subject to our prevailing rules and regulations, and the handling of policy during the extended grace period will be subject to our discretion.

If the insured commits suicide within one year from the date on which the policy takes effect, our liability will be limited to the refund of premiums paid (without interest) less any outstanding debt.

After exercising the Change of Insured Option or upon the contingent insured becoming the new insured, if the new insured commits suicide within one year from the effective date of change as recorded by us, our liability will be limited to the refund of premiums paid of the basic plan (without interest) or the sum of guaranteed cash value, accumulated Annual Dividends with interest (if any), Terminal Dividend (if any) and any remaining balance of the Terminal Dividend Lock-in Account (if applicable) as at the date the new insured passes away, whichever is higher, less any outstanding debt.

Except for fraud or non-payment of premiums , we will not contest the validity of this policy after it has been in force during the lifetime of the insured for a continuous period of two years from the date on which the policy takes effect. This provision does not apply to any add-on plan providing accident, hospitalisation or disability benefits. After exercising the Change of Insured Option or upon the contingent insured becoming the new insured, such two-year period will be counted again starting from the effective date of change as recorded by us.

You have the right to cancel and obtain a refund of any premiums and any levy paid by giving written notice to us. Such notice must be signed by you and submitted to the Customer Service Centre of AIA International Limited at 12/F, AIA Tower, 183 Electric Road, North Point, Hong Kong or the Customer Service Centre of AIA International Limited at Unit 1903, 19/F, AIA Tower, 251A-301 Avenida Comercial de Macau, Macau within 21 calendar days immediately following either the day of delivery of the policy or the Cooling-off Notice to you or your nominated representative, whichever is the earlier.