Hihi, sorry to hear that you bought into AXA pulsar. Hope you managed to resolve you policy by now already.
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Thanks for sharing your predicament. I nearly signed onto an AXA Pulsar 30-year plan myself despite me specifically telling the agent I donât want to commit for so long. Only when I pressed her on the calculations, then I realised what I was presented with, was a 30-year plan. The agent claimed she was only trying to help me get the 168% bonus, which is only possible for 30-year plans.
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If anyone has time to read on, hope to share my own experience with an AXA agent whom I feel didnât do a good job representing the terms to me holistically. She was sharing the benefits based on a 30-year premium payment term plan despite me wanting to commit to paying premiums for 5 years only. She was very careful to be accurate on specific points on a standalone basis, so that she is not mis-selling I think, but still very sneaky!
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First off, this AXA Pulzer product is a very complicated ILP policy with two types of accounts âInitial Unit Account (IUA)â and âAccumulation Units Account (AUA)â. There are various rules, charges, and fees on these 2 accounts. The product summary document alone is 23 pages long (and this is only for rules/charges/fees, the actual process of investing in unit trusts and which funds etc needs another session). The agent selectively referred to some of the charges, and glossed over the rest by saying they are not applicable.
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The agent kept stressing that âthe charges are very lowâ. I later realised thatâs because she was referring ONLY to the AUA account, which has a perpetual 1.5%pa charge slapped on the value of the unit trusts throughout the policy life, regardless of its performance. The agent said 1.5%pa on this AUA account is âone of the lowest in the marketâ because other products will charge a 5% sales charge. She kept repeating and stressing on this âvery lowâ 1.5%pa throughout the call.
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Yes she didnât fail to mention that thereâs a â4%pa chargeâ so no mis-representation here. However, I remember she distinctly said verbatin that this 4% chage is âonly for the first 18 monthsâ and âonly first 18 months, and after 18months, there is no more 4%â and âafter that the very low 1.5%pa charge will kick inâ. And did not go into details on the 4%.
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I actually thought the 4%pa will stop after 18 months. WRONG. Luckily, I read the Product Summary and I realise I have to pay for this Account Maintenance Fee of 4%pa for 30 years based on the policy illustration (stress: this 4%pa is payable during the Premium Payment Term, which is between 5 to 30 years long) not just during the first 18 months. This 4%pa is calculated based on the value of the unit trusts that is bought by the Initial Unit Account (IUA) premiums. I will need to contribute premiums for the first 18 months into this IUA. This is what the 18 months refer to.
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So even then I thought, âThis 4%pa is only payable during the Premium Payment Term and I only want to pay premium for say 5 years. So I pay 4%pa over 5 years shld be ok?â. Hereâs the kicker: the agent presented to me a plan with a Premium Payment Term that lasts for 30years, so it means Iâm going to be paying this 4%pa for 30years! (Goodness). When I pressed on, she then explained I will only get the max bonus of 168%, highest bonus in the market, if I sign up for a 30-year Premium Payment Term so she was only trying to âhelp meâ.
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Then I asked, if I have a 30-year Premium Payment Term, it means I have to contribute $X amount into the ILP for 30 years right? I will only want to commit to pay premiums for just 5 years. She then said yes, I only pay for 5 years & after that, I can use my dividends from 6th year onwards to pay off the premiums/charges/fees for the next 25 years. One will be wondering how this is possible. Well, based on her calculations, this is âvery doableâ cos she said I will be earning 15%pa on my dividends. The regular dividends can be used to contribute the premiums for 30 years. She said she is really trying to help me pay off the premiums but nowhere in her pitch did she say that the 15%pa is not guaranteed. Of cos everyone will say, nothing is guaranteed, this is basic understanding, no need to spell out so clearly - that 15%pa is never guaranteed. So I already know her âhelpâ may not materialise.
â
Back to the 4%pa to be paid for 30 years, I said all these charges added up seem very high. She said âthis is very goodâ cos I only pay more when the unit trust is doing well, that "the insurer only gets paid when Iâm doing wellâ. I then pressed her to explain what she meant. Does that mean I donât need to pay charges if my unit trusts donât perform? She said these fees ensures that the value of the unit trust will never go to zero. This is because if my account /unit trust value goes to zero means AXA doesnât get paid any fees at all ma. If my unit trust value drops to half, âAXA only gets paid halfâ. (This just means I am guaranteeing that AXA always earns 4% and 1.5%, but yet my unit trust value and dividends are not guaranteed at all.)
â
Anyway, I didnât proceed. The agent kept harping on â168% bonus being the most generousâ in the market, and â1.5% on the AUA is one of the lowest in the marketâ. Both are correct I suppose, if taken on a standalone basis.
â
Overall, this product is quite complicated, and I thankfully didnât decide just based on the high bonus and âlowâ charges. I actually spoke to this agent at length over 3 zoom sessions and only found out at the last session that she was trying to get me to sign on a 30-year plan cos she was trying to âhelpâ me get the 168% bonus. And this was only after I pressed on for her to show me how the charges are calculated one by one.
â
If I had never clarified, I will hv blur blur sign on for a 30 permium term year policy (thinking that I stop paying premums after 5 years) and get a rude shock on year 6 if the dividends didnât perform 15%pa.
â
Hihi, sorry to hear that you bought into AXA pulsar. Hope you managed to resolve you policy by now already.
â
Thanks for sharing your predicament. I nearly signed onto an AXA Pulsar 30-year plan myself despite me specifically telling the agent I donât want to commit for so long. Only when I pressed her on the calculations, then I realised what I was presented with, was a 30-year plan. The agent claimed she was only trying to help me get the 168% bonus, which is only possible for 30-year plans.
â
If anyone has time to read on, hope to share my own experience with an AXA agent whom I feel didnât do a good job representing the terms to me holistically. She was sharing the benefits based on a 30-year premium payment term plan despite me wanting to commit to paying premiums for 5 years only. She was very careful to be accurate on specific points on a standalone basis, so that she is not mis-selling I think, but still very sneaky!
â
First off, this AXA Pulzer product is a very complicated ILP policy with two types of accounts âInitial Unit Account (IUA)â and âAccumulation Units Account (AUA)â. There are various rules, charges, and fees on these 2 accounts. The product summary document alone is 23 pages long (and this is only for rules/charges/fees, the actual process of investing in unit trusts and which funds etc needs another session). The agent selectively referred to some of the charges, and glossed over the rest by saying they are not applicable.
â
The agent kept stressing that âthe charges are very lowâ. I later realised thatâs because she was referring ONLY to the AUA account, which has a perpetual 1.5%pa charge slapped on the value of the unit trusts throughout the policy life, regardless of its performance. The agent said 1.5%pa on this AUA account is âone of the lowest in the marketâ because other products will charge a 5% sales charge. She kept repeating and stressing on this âvery lowâ 1.5%pa throughout the call.
â
Yes she didnât fail to mention that thereâs a â4%pa chargeâ so no mis-representation here. However, I remember she distinctly said verbatin that this 4% chage is âonly for the first 18 monthsâ and âonly first 18 months, and after 18months, there is no more 4%â and âafter that the very low 1.5%pa charge will kick inâ. And did not go into details on the 4%.
â
I actually thought the 4%pa will stop after 18 months. WRONG. Luckily, I read the Product Summary and I realise I have to pay for this Account Maintenance Fee of 4%pa for 30 years based on the policy illustration (stress: this 4%pa is payable during the Premium Payment Term, which is between 5 to 30 years long) not just during the first 18 months. This 4%pa is calculated based on the value of the unit trusts that is bought by the Initial Unit Account (IUA) premiums. I will need to contribute premiums for the first 18 months into this IUA. This is what the 18 months refer to.
â
So even then I thought, âThis 4%pa is only payable during the Premium Payment Term and I only want to pay premium for say 5 years. So I pay 4%pa over 5 years shld be ok?â. Hereâs the kicker: the agent presented to me a plan with a Premium Payment Term that lasts for 30years, so it means Iâm going to be paying this 4%pa for 30years! (Goodness). When I pressed on, she then explained I will only get the max bonus of 168%, highest bonus in the market, if I sign up for a 30-year Premium Payment Term so she was only trying to âhelp meâ.
â
Then I asked, if I have a 30-year Premium Payment Term, it means I have to contribute $X amount into the ILP for 30 years right? I will only want to commit to pay premiums for just 5 years. She then said yes, I only pay for 5 years & after that, I can use my dividends from 6th year onwards to pay off the premiums/charges/fees for the next 25 years. One will be wondering how this is possible. Well, based on her calculations, this is âvery doableâ cos she said I will be earning 15%pa on my dividends. The regular dividends can be used to contribute the premiums for 30 years. She said she is really trying to help me pay off the premiums but nowhere in her pitch did she say that the 15%pa is not guaranteed. Of cos everyone will say, nothing is guaranteed, this is basic understanding, no need to spell out so clearly - that 15%pa is never guaranteed. So I already know her âhelpâ may not materialise.
â
Back to the 4%pa to be paid for 30 years, I said all these charges added up seem very high. She said âthis is very goodâ cos I only pay more when the unit trust is doing well, that "the insurer only gets paid when Iâm doing wellâ. I then pressed her to explain what she meant. Does that mean I donât need to pay charges if my unit trusts donât perform? She said these fees ensures that the value of the unit trust will never go to zero. This is because if my account /unit trust value goes to zero means AXA doesnât get paid any fees at all ma. If my unit trust value drops to half, âAXA only gets paid halfâ. (This just means I am guaranteeing that AXA always earns 4% and 1.5%, but yet my unit trust value and dividends are not guaranteed at all.)
â
Anyway, I didnât proceed. The agent kept harping on â168% bonus being the most generousâ in the market, and â1.5% on the AUA is one of the lowest in the marketâ. Both are correct I suppose, if taken on a standalone basis.
â
Overall, this product is quite complicated, and I thankfully didnât decide just based on the high bonus and âlowâ charges. I actually spoke to this agent at length over 3 zoom sessions and only found out at the last session that she was trying to get me to sign on a 30-year plan cos she was trying to âhelpâ me get the 168% bonus. And this was only after I pressed on for her to show me how the charges are calculated one by one.
â
If I had never clarified, I will hv blur blur sign on for a 30 permium term year policy (thinking that I stop paying premums after 5 years) and get a rude shock on year 6 if the dividends didnât perform 15%pa.
â