How does GREAT Wealth Advantage work? Where is the insurance coverage portion?

You're right, it is a pure investment policy with minimal insurance insurance coverage of 110% TIV. There is also a insurance cum investment ILP called Great Life Advantage.

Allocation for Great Wealth Advantage is 100% from year 1, but there's a "lock in" period of about 10 years whereby withdrawals and premium holidays have charges. Withdrawal charges are up to the 10th year and premium holiday charges are up to the 5th year.

There's a 5% welcome bonus of units on the first year, and a 5% loyalty bonus from the 10th year onwards for each and every year. However, between year 1 to year 10, there's a 2.5% charge on the account value.

The policy is back end loaded, meaning that charges are imposed during the term of the policy instead of charging up front.

Hope this helps to clear things up!

Hi Anon,

For ILPs, usually what happens is that in the first 2 years, most of your premiums will be used to build up the protection aspect of your policy and from the 3rd year onwards, bulk of your premiums will be used into investments (buying of units).

Also, usually in regards to ILPs, in the Policy Illustration, there is usually a table that explains to you mortality charge. Of which it will show you the different age bands and the different coverages and their cost, which for example using a male aged 35, non-smoker; the mortality charges below;

Monthly Modal Factor = 0.0834

Death, TPD & TI = $0.69 per 1,000 Sum At Risk (Higher between Sum Assured & Policy Value)

Crisis Cover = $0.90 per 1,000 Sum Assured

Early Crisis Cover = $4.04 per 1,000 Sum Assured

With a sum assured of 50,000 and having an policy value of 10,000 after having the policy for a few years, the calculation is as follows;

Current month's Death, TPD & TI = (Sum at risk - policy value) x (0.69/1,000 x month modal factor)
= (50,000 - 10,000) x (0.69/1,000 x 0.0834)
= $2.30

Current month's Crisis Cover = Sum assured x (0.90/1,000 x month modal factor)
= 50,000 x (0.90/1,000 x 0.0834)
= $3.75

Current month's Early Crisis Cover = Sum assured x (4.04/1,000 x month modal factor)
= 50,000 x (4.04/1,000 x 0.0834)
= $16.85

Current Month's Mortality Charge = $2.30 + $3.75 + $16.85 = 22.90

So if the premiums are at $150 a mth, 150 - 22.90 = 127.10

127.10 will be used to purchase units, and 22.90 is for the insurance coverage.

I hope this clears things up abit, doing the best I can to explain this cause ILPs are a hybrid product and are more complex & risky in nature.​​​