AIA Invest Easy is a single premium investment-linked policy that aims to help you invest your money with just a single investment.
Invest in 1 or more sub-funds based on your preference under this investment-linked policy.
You can invest via cash on hand, your Supplementary Retirement Scheme (SRS) Account, or your Central Provident Fund (CPF-OA & CPF-SA) funds.
In this post, we reviewed the AIA invest Easy to help you decide if it’s the right ILP for you.
There are 3 different ways to pay for this policy, and each premium payment option has a different age range.
- Cash (0-70 years old),
- SRS (18-70 years old),
- CPF (18-61 years old).
The minimum investment amount is S$12,000, with options of S$300 top-ups every month.
There are no minimum investment periods required for the AIA Invest Easy.
The coverage period for the AIA Invest Easy is for your whole life, as long as the policy is still in force.
Premium Payment Terms
AIA Invest Easy only has a single premium account whereby 100% of your premium is used to buy units at the bid price in your chosen ILP sub-funds.
|Entry Age||Minimum Single Premium Amount|
|70 and below||S$12,000|
You can make ad-hoc and monthly top-ups. 100% of your top-ups will be used to buy units within your chosen ILP sub-funds.
The following table shows the minimum premium amounts applicable.
|Regular Top-Up Premium||Minimum Premium Amounts|
|Ad Hoc Top-Up Premium||S$1,000|
With this ILP, you can make ad-hoc or regular top-up premiums as often as possible – monthly, quarterly, semi-annual, or annual payments.
Notably, the first regular top-up following your request will start right at the inception of your policy. Therefore, you don’t have to worry about the waiting period.
If the insured passes away, their beneficiaries will receive a lump sum payment of 100% of the policy value minus any charges and fees.
Like most policies, the death benefit ends immediately after a claim.
First-Year Accidental Death Benefit
In case of an accident and death occurs within 90 days, and if it’s within a year after signing up for the policy, your beneficiaries will receive a higher of;
- Death benefit or
- 110% of the single premium plus top-ups minus any withdrawals.
It’s important to note that the policy can only pay for the Death Benefit or First Year Accidental Benefit but not both.
As the name suggests, Maturity Benefit is payable when the policy matures. You will receive the policy value minus any applicable fees.
The policy matures at age 100 and automatically terminates on this date.
Worth noting; the value of the ILP depends on the price of the underlying units, which is affected by factors such as the performance of the investments in the fund.
Your policy value is, therefore, not guaranteed.
The dividends you receive from the ILP sub-fund (if you invested in a dividend-paying fund) depend on the number of units you hold on the ex-date.
It’s important to note that these dividends are not guaranteed. Additionally, the frequency of dividend distribution is at the fund’s discretion.
You can choose to receive your dividends payouts in cash or have them re-invested in the ILP sub-fund.
By default, any dividends reinvested as additional units in the fund are based on the bid price prevailing on the reinvestment date.
The policy offers the option of withdrawing a portion of your cash value before its maturity date while keeping the remaining balance invested.
AIA reserves the right to restrict the amount you want to withdraw and your frequency limits.
Under AIA Invest Easy, partial withdrawals are allowed any time after the free-look period, which is 14 days after receiving your policy documents.
The minimum amount you can withdraw is S$1,000, and the policy’s value after withdrawal must be at least S$1,000.
You can direct the transfer of any or all units in a sub-fund to another sub-fund offered under your policy.
Note that the minimum amount you can switch is S$50. The switching fee may be applicable.
Automatic Fund Rebalancing
You can enable Automatic Fund Rebalancing for your Invest Easy policy.
This feature ensures that your holdings in various sub-funds are regularly rebalanced to match pre-determined fund allocations subject to the plan’s terms and conditions.
Subsequently, the plan will adjust your funds based on any changes in rebalancing after the date.
However, they cannot execute any switches (in or out of an ILP sub-fund) that are less than S$50 or 1% of the policy value (whichever is lower).
Fees and Charges
For each Single Premium and Regular Premium Top-Up made using cash, you will be charged 3%.
For example, if you pay $100 as a single premium or add respective top-up premiums on top of it, 3% will be deducted – $3.
We’ll break it down so that the calculations are easy to understand.
Suppose the number of units in the ILP sub-fund you will receive depends on a single premium amount of S$2,000 and a notional bid price of S$1.00.
The premium charge will be 3% of S$2,000, which is equal to S$40 as shown in the table below;
|Single Premium Amount||S$2,000|
|Charges 3% of S$2,000||S$40|
|Remainder Premium After Charges||$1,960|
|Divide by bid price||$1.00|
|Number of units||1,960|
The same applies when calculating the premium charge for investments made using your SRS funds.
For investments made via your CPF-OA and CPF-SA, there is a 0% premium charge.
Fund Management Charge
The Fund Management Charge is a percentage of the net asset value of the sub-fund. It covers expenses such as investment research, portfolio management, and other related costs.
The fund management charge depends on which funds you’re invested in and could be between 0.5% to 3% per annum.
Take note that the AIA Invest Easy invests in an insurer sub-fund instead of directly into the unit trusts; this means that you’re paying an additional layer of fees.
Click here to understand more about insurer sub-funds and directly invested sub-funds.
You may submit a written request to AIA to make a full surrender with no surrender charges incurred. You will receive your total account value should you make a full surrender.
Summary of the AIA Invest Easy
|Cash and Cash Withdrawal Benefits|
|Cash Value Benefits||Available|
|Health and Insurance Coverage|
|Death||Death & First Year Accidental Death Benefit|
|Total Permanent Disability||N/A|
|Early Critical Illness||N/A|
|Health and Insurance Coverage Multiplier|
|Total Permanent Disability||N/A|
|Early Critical Illness||N/A|
|Optional Add-on Riders||N/A|
|Additional Features and Benefits||N/A|
My Take On AIA Invest Easy
The AIA Invest Easy is a unique offering that could be an ideal fit for individuals looking to make a one-time lump-sum investment for both the short and long term.
It’s also one of the few investment-linked policies that let you invest your SRS funds and CPF-OA/CPF-SA; potentially offering higher returns than endowment and annuity plans.
Nonetheless, it’s important to note that this policy may have potential investment risks and market volatility.
Additionally, it may not be a good fit if you are looking for guaranteed financial returns or guarantees on your capital. It’s also not for those looking to make multiple contributions due to the 3% premium charges you’ll incur every time you make a top-up.
Oh, and I feel that the 3% premium charge (also called a sales charge in other policies) might be a tad too high. You can usually get this anywhere between 1% to 2%.
However, I have to say that the AIA Invest Easy is an attractive option due to it not having any minimum investment periods and no surrender charges – something that many investment-linked policies (even the best ILPs in Singapore) struggle with.
This means you don’t have to worry about paying surrender charges if you want to withdraw the full amount from your policy, or even partial withdrawal charges too!
However, there’s one thing I have to counter this with, though; personally, I feel that if you’re gonna pay a 3% sales charge, have no surrender value, and can withdraw the full amount anytime, then investing via iFAST through a financial advisor could be better.
If you’re investing a large enough amount, you can negotiate with your financial advisor to reduce your asset under management (AUM) charges to as low as 0.5% (or 0% if you are besties), and pay a lower sales charge that can range between 1% to 2% (depends on the company).
You might wonder, wouldn’t an AUM fee be more in the long run?
Yes, however, your financial advisor will have direct access to sub-funds via iFAST, which means that the Fund Management Fees are usually included in the calculation of returns.
For insurer sub-funds (AIA or not), Fund Management Fees are usually not included and can range between 0.5% to 3% per annum, as mentioned earlier.
So instead of you paying Fund Management Fees (0.5% to 3%), you pay in AUM (0.5% to 2%) instead, which could be lesser.
However, you can only use your CPF funds and cash to invest via iFAST, so if you want to invest with your SRS funds, AIA Invest Easy is an excellent option.
Now, I’m not saying that the AIA Invest Easy is not good. I’m saying that you should always explore different options available to reduce the fees you incur – regardless of which policy you buy.
That’s why I always recommend you to read and understand the different ways to invest your money and to always seek advice from a financial advisor.
A financial advisor worth their salt would be able to share with you the different ways they can help you invest your money.
Need a financial advisor you can trust? We partner with MAS-licensed financial advisors to help you with this.