Hi. Can I confirm that for par insurance plan i do not take the risk of investment. in a market downturn my risk is only lower bonuses from insurers?

Hi anon,

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I can confirm this. The insurer takes the responsibilty to invest the premiums via the participating fund.

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Whatever reversionary bonuses annouced and credited previously cannot be taken away. But a future bonus, if not declared due to sustained poor investment returns, means that the projected returns when the plan matures will be lower.

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In a market downturn, your terminal bonuses may be affected too if your plan matures that year.

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Having said that, insurers tend to smoothen the bonuses, so in a market downturn, you may still get your bonuses. Smoothening means that in good years, insurers withhold some of the bonuses so that they can continue to pay bonuses in bad years.

It would be better if you read through the policy itself. If your capital is a concern, consider endowment plans that guarantee 100% of your capital upon maturity.