PRULifetime Income Premier Series are a single premium participating annuity plan that is designed to provide you with regular income payments over a specific period to supplement your retirement or your children’s needs.
Read on as we explore the PRULifetime Income Premier Series to help you decide if it’s the best whole-life insurance plan to meet your needs.
- Single premium
- Minimum investment period of 5 years
Before continuing, it’s important to clarify that the PRULifetime Income Premier Series contains 2 policies – the PRULifetime Income Premier III (SGD) and the PRULifetime Income Premier (USD).
In this review, we will be focusing on the PRULifetime Income Premier III (SGD).
Premium Payment Terms
As the PRULifetime Income Premier Series is a single premium policy, you only have to make a one-time premium payment at the start of your policy.
However, the aggregate premiums you can pay in the past 24 months cannot exceed S$10 million (or equivalent) – you know, just in case you’re a baller.
The PRULifetime Income Premier Series will be in force for as long as you live.
The plan offers compensation to your loved ones in the unfortunate event of your passing. This ensures that they are financially protected during this difficult time.
The benefit amount is a lump sum, which will be the higher of:
- 105% of your single premium paid
- 101% of what would be your surrender value at death.
Cash benefits that have not yet been paid will also be added, less any outstanding amounts.
Accidental Disability Benefit
An accidental disability payout is paid if you become totally and permanently disabled (often referred to as TPD) as a result of an accident before the policy’s end date.
If such an unfortunate event occurs, the payout amount will be the greater of these 2 options:
- A payout of 105% of the initial premium paid when you first purchased the policy.
- If certified, you are totally and permanently disabled, with a payout of 101% of this surrender value.
In addition to the above amounts, any outstanding cash benefits will also be included in the payout amount.
However, if you owe any money to Prudential at the time of your disability, that amount will be deducted from the total payout.
The maximum amount you can receive from this accidental disability benefit is S$2,000,000.
If the benefit exceeds this amount, the remainder of the assured sum will be aggregated 12 months from the initial payment or if you pass away, whichever comes first.
The accidental disability benefit will stop being applicable on the policy anniversary before your 70th birthday.
Any overpayment of monetary benefits resulting from late notification of an accidental disability benefits claim will be deducted.
The PRULifetime Income Premier Series offers a guaranteed and non-guaranteed cash benefit paid on a monthly basis for life from the 5th policy year onwards.
The non-guaranteed income may vary depending on factors such as the participating fund’s investment performance.
Your monthly income is calculated as a percentage of the single premium paid to purchase the policy.
The higher the premium, the higher the monthly income you can expect to receive.
The table below shows the yearly Cash Benefit for PRULifetime Income Premier III (SGD):
The non-guaranteed portion of the annual Cash Benefit becomes payable from the 2nd policy anniversary.
The performance bonus may be paid out when you surrender your policy. However, this bonus is not guaranteed.
It’s also a one-off bonus, which means that it may or may not be paid out. That depends on whether the participating fund performed or underperformed.
The illustration below provides bonus rates as a percentage of the single premium, which is based on the illustrated IRR of 4.25% per annum of the participating fund:
PRULifetime Income Premier Series lets you make withdrawals from your accumulated cash benefits.
If you have accumulated cash benefits, you may request to withdraw a minimum of $1,000 at any time.
However, if your cash benefit balance is less than $1,000 at the time of your request, you must withdraw the entire amount if you proceed with the application.
To apply for cash benefit withdrawal, complete the relevant application form and fulfil the specified conditions.
These withdrawals may be subject to surrender charges and other fees.
It’s worth noting that the cash benefit will be terminated in case of a death or accidental disability benefits claim.
Change of Life Assured
You can choose to change the life assured to another person only after 2 years from the policy’s start date.
Once you change the life assured, the coverage for the previously assured will cease, and coverage for the newly assured will commence on the new cover start date indicated in the updated life assurance certificate.
Policy, Surgical & Nursing Loans
While you can take these loans when you want to, they will reduce the long-term value of the policy.
In addition, if you take the policy loan, interest will be charged at a rate set by Prudential.
However, the new rate will take effect after a 3-month written notice expires.
PRULifetime Income Premier Series Fund Performance
This is the asset allocation for the PRULifetime Income Premier III (SGD):
To maintain consistent medium and long-term returns, bonuses and non-guaranteed cash benefits are smoothed to offset fluctuations in investment performance.
This means that some of the investment returns earned during good years may not be immediately distributed but instead held to enhance returns during periods of low investment return.
This smoothing approach aims to create a neutral effect over time, allowing for stable returns despite fluctuations in investment performance.
The table below illustrates the past IRR after deducting expenses only:
From the table, the fund has maintained a consistent performance over the years.
Total Expense Ratio
The Total Expense Ratio outlines the percentage of expenses the Participating Fund incurs based on its assets.
This includes investment, management, distribution, taxation, and other expenses.
Like most funds, the premiums you pay for your policy already account for the expected level of expenses, meaning there are no additional costs to you.
Here is a table showing this participating fund’s TER over the past few years:
It’s always good to compare the TER with other fund ratios so that you can know whether the fund is good at managing costs.
The table below provides a comparison of expense ratios among several insurers:
It is worth noting that Prudential’s average expense ratio is above the industry average.
However, it is equally important to recognise that Prudential has maintained this ratio at 2.92% over the past 3 years.
This indicates that the company has been consistent in managing its expenses.
PRULifetime Income Premier Series Fees And Charges
The fees and charges you’ll incur by the PRULifetime Income Premier Series are already included in your premiums and will not be of additional cost to you.
Summary of the PRULifetime Income Premier Series
|Cash and Cash Withdrawal Benefits|
|Health and Insurance Coverage|
|Total Permanent Disability||Yes|
|Early Critical Illness||No|
|Health and Insurance Coverage Multiplier|
|Total Permanent Disability||No|
|Early Critical Illness||No|
|Optional Add-on Riders||No|
My Review of PRULifetime Income Premier Series
The PRULifetime Income Premier III (SGD) offers a comprehensive package of financial benefits to secure your future and provide for your loved ones.
The lump sum death benefit ensures that your beneficiaries are well taken care of in the unfortunate event of your passing.
Additionally, the accidental disability benefit offers crucial coverage in case of severe accidents.
However, it’s important to note that the accidental disability benefit ceases before your 70th birthday, which may leave you without this safeguard in your later years.
One of the policy’s standout features is the cash benefit, which delivers a monthly income stream from the 5th policy year onwards.
This can be a lifeline during retirement, helping you maintain your lifestyle and cover regular expenses.
The flexibility to make partial withdrawals from accumulated cash benefits provides liquidity, addressing any unexpected financial needs that may arise.
While the policy offers a performance bonus, it’s essential to understand that this bonus is not guaranteed.
Its payout depends on the participating fund’s performance, which carries an element of uncertainty.
Depending on market conditions, the bonus may or may not materialise as expected.
Therefore, policyholders should consider this bonus as a potential but not guaranteed benefit.
But speaking of its participating fund’s performance, it has been doing very well with great 3, 5, and 10-year annualised returns – even with the effects of the pandemic.
One factor that warrants careful consideration is the Total Expense Ratio (TER), which is higher than the industry average.
Although the premiums already account for expected expenses, the relatively high TER could impact the long-term returns on your investment.
Comparing this ratio with other participating funds is worth it to assess whether the policy aligns with your cost management preferences.
However, it’s noteworthy that Prudential has maintained this ratio at 2.92% over the past 3 years, indicating consistent expense management.
Nonetheless, whether you should purchase a PRULifetime Income Premier Series depends on your own financial goals, risk tolerance, and budget.
We suggest researching more on other types of policies available to you and comparing the PRULifetime Income Premier Series to other annuities in the market.
If you are unsure about taking this plan, It’s important to get a second opinion and review all options carefully before making a decision.