Hi everyone. Anyone compared Great Eastern's Great Wealth Advantage (GWA) to AIA's Pro Achiever 2.0?

Hi anon,

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Ignoring suitability aside, what are you aiming to compare?

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To truly compare, you must set parameter of both plans to be the same. That means the same premium terms, the same premium amount, the same type of coverage.

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Then you have to compare what you are invested in. This becomes very difficult because both insurers offer different funds. But broadly you could look at the sector, themes, etc.

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Then you'll realise, even if you have exactly the same funds on both plans, the policy illustration is still pegged at 4% and 7.2% projections which is not an indication of the returns that the fund may give. So in truth, even the policy illustration is only a guide since 1) investments don't grow at a steady rate each year and 2) you will have down periods and up periods.

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And then I come to the biggest question of all: Why are you even considering an ILP for investment purposes?

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For ILPs that are purely for investment, most of them have a lock in period of some sort. Failing to adhere to the minimum lock in period will often lead to severe surrender penalties. Also, you have to be aware of the fees involved with such ILPs, I'm not talking about fees at the fund level, which are priced into the fund NAV, but rather, fees at the policy level, which directly eat into your returns. Depending on the policy, there can be anything from administration fee, to policy fee, investment management fee, etc. Very likely, your policy will have a severe termination penalty if you terminate early. Premium holidays, or withdrawals, will have conditions on them as well. This really depends on the policy, so you will have to be very clear about what you're getting into. Such fees will greatly erode whatever returns you have, include any 'start up bonus'

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Also, look at the projected values of the policy, and do some computations on your own if you were to invest and really get those 4% or 8% returns. The differences in the numbers might surprise you.

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Having access to institutional funds via an ILP is not necessarily a good thing too; they are institutional funds for a reason. Not everyone is suited to invest in funds that employ riskier techniques to grow wealth. Sometimes, sticking to mass market funds may still net you a decent return, without unduly increased risk.

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There are many ways to grow your wealth. ILPs don't have to be one of them.

Personally I have the AIA Pro Achiever 2.0 (APA)

Both works similarly in a sense where the "lock in" period is 10 years. After these 10 years, then you will be able to withdraw your policy value in whole without any charges.

The first difference lies in coverage. As for APA, it only covers death. Whereas, GWA covers death and total and permanent disability.

Another difference is the bonus. For APA, the bonuses are more extensive. If annualised premiums are at least $4,800, you will receive a 5%, 8% and 10% welcome bonus in the 1st, 2nd and 3rd year respectively. From 11th policy year to 20th policy year, you will receive a 5% loyalty bonus. After that, you will receive 8% loyalty bonus.

For GWA, the bonuses are 5% for the welcome bonus and only for the 1st year. The loyalty bonus remains constant at 5% from 11th policy year onwards.

Lastly, I would say is the funds. Not entirely sure how and who manages the funds/portfolios. AIA have partnerships with fund managers such as Baillie Gifford, Blackrock and Wellington Management for their portfolios.

However, I am unable to find much information if there are any portfolios readily available or the Financial Advisers will be the one assisting in picking the fund for you.

Take my comparison with a pinch of salt as I already have an APA plan. Ultimately, ILPs imo are not that great but I see APA as a pure investment plan as the death coverage essentially means I get a payout of whatever returns I have from the plan. If you need coverage consider getting a separate plan.