Who Are:
Zurich?
Zurich International Life, which is a part of the globally operating Zurich Insurance Group, offers individual products for savings, investment, and protection. The company has established branches in key locations such as Bahrain, Hong Kong, Qatar, and the United Arab Emirates. Zurich International Life provides life insurance solutions and a variety of investment and protection products. Zurich Insurance Group, with a workforce of approximately 60,000 individuals spanning 170 countries, has been a longstanding player in international markets.
***Some of these products may have commissions built directly into them. If you've been advised to consider a Zurich investment policy reach out to us to explore if we can establish the policy at a lower cost.
Kevin's Review:
Zurich are a household name in many parts of the world and the established brand given an element of comfort to many investors.
Their most common policy in the middle east is the Futura Whole-of-Life Insurance policy. This policy allows a policy holder to provide life and critical illness cover for themselves and loved ones, whilst also building a pot of wealth in an investment account. Whole-of-Life insurance can be a particularly powerful wealth and estate planning tool when used in the correct circumstances and properly managed.
Zurich's policies should be considered as long-term wealth planning vehicles as much as they are investment accounts and should be taken out only when appropriate to do so and with the proper time horizon in-mind. If you are considering a Zurich policy it is worth speaking with a qualified financial adviser who can ensure it is appropriate for you.
Whole of Life Insurance:
Futura
Zurich Futura stands out as a versatile whole-of-life protection policy, offering unit-linked benefits that can adapt to evolving life circumstances. It's essential to note that Futura is primarily a protection policy, focusing on providing a cash sum in the event of the life or lives assured passing away, rather than an investment policy.
The benefits offered through Zurich Futura include:
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Life Cover
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Terminal Illness Benefits
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Aeroplane Cover
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Waiver of Premium Benefits
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Critical Illness Benefits
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Children’s Critical Illness Benefit
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Permanent and Total Disability Benefit
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Family Income Benefit
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Accidental Death Benefit
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Dismemberment Benefit
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Hospitalisation Benefit
The age limitations for Zurich Futura require the policyholder to be aged 18 or above, with a maximum age limit of 74 years.
Payment terms for Zurich Futura are available in multiple currencies, including USD, EUR, GBP, HKD, CHF, and JPY. Accepted payment methods encompass Credit Card, Cheque, Bank Standing Order, Telegraphic Transfer, and Direct Debit. Premiums can be paid on a monthly, quarterly, half-yearly, or yearly basis.
In terms of fees and charges, the allocation rates for regular premiums vary over the policy term:
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Years 1-2: 0%
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Years 3-9: 93%
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Years 10+: 98%
This implies that the initial premiums mainly cover setup charges in the early years, with Zurich deducting 7% from regular premiums in years 3-9 and 2% from year 10 onwards. Single premiums face an 16% initial charge, and a monthly administration charge of $7.50 or the equivalent in other currencies applies.
Additionally, an annual fund management charge is applied by the fund manager, and Zurich's mirror fund charges may also come into effect, currently at 0.75%. Other charges, such as premium cessation, credit card, and currency charges, are applicable. It's advisable to review the most recent documents or consult directly with Zurich for the latest and most accurate information on fees and charges.
Before committing to a Zurich Futura plan, several key considerations should be kept in mind:
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Long-Term Commitment: Zurich Futura is designed for the long term, and discontinuing or reducing premiums could lead to policy lapses. If the policy lapses, all benefits cease, and there is no refund of the premiums paid.
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Accurate Application Information: Providing accurate and complete information in the application is crucial. Failure to answer all questions truthfully and accurately may result in complications when making benefit claims.
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Policy Currency: The choice of policy currency is made at the outset and cannot be altered later. It's important to select the most suitable currency for your needs.
Discounts and Bonuses:
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10% Premium Discount: Zurich Futura offers a 10% discount on monthly premiums throughout the policy term. Availability of this discount is subject to change and may have an expiration date.
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Loyalty Bonus: Starting from the tenth policy anniversary and continuing annually thereafter, Zurich Futura provides a loyalty bonus equal to 0.5% of the policy value each year. This bonus serves as a reward for the policy's longevity and the commitment of the policyholder.
It's advisable to stay informed about the availability of discounts, as they may be time-sensitive, and to carefully review the terms and conditions associated with bonuses. Understanding these aspects ensures that policyholders make informed decisions aligned with their long-term financial goals.
Term Insurance:
Vista
The Zurich Vista savings plan, once widely marketed to expatriates, is an international, unit-linked life insurance policy designed for the medium to long term. It is no longer available to new investors in the UAE. Here are some key features:
Investment Choice:
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A selection of approximately 170 funds is available, with most being MIRROR funds, incurring additional expenses.
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Managed funds in US Dollar, Euro, and Sterling are also offered, each with varying risk and return profiles.
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The investment strategy is subject to market risks, and the guidance of an investment adviser is recommended for effective management.
Multi-Currency:
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The Zurich Vista Plan can be denominated in USD, GBP, EUR, and AED.
Minimum Deposit:
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£200 Monthly, £600 Quarterly, £1,200 Half-yearly, £2,400 Yearly (or currency equivalent).
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Minimum term is 5 years, extendable up to a maximum of 25 years based on the selected contribution level.
Early Access to Funds:
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Full early encashment incurs surrender charges linked to the policy term.
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Maturity bonus, refunding a percentage of yearly management charges, is applicable after specific policy terms.
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Regular withdrawals and partial surrenders, free of penalty charges, are available after the initial period.
Fees and Charges:
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An annual charge of 4% on the value of initial units is deducted monthly throughout the premium term or 25 years, whichever is later.
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Monthly policy fee of £5.50.
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Yearly management charge based on policy value, deducted monthly at a rate of 1% per year.
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Underlying fund charges vary (0.5% to 3%), covering annual management charge, performance fee, bid-offer spread, and/or switching fee.
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Mirror fund charge of 0.75% annually on the net asset value of the underlying fund is imposed by Zurich.
It's crucial to consider the long-term commitment, potential penalties for early withdrawals, and the impact of fees on the overall returns before opting for the Zurich Vista savings plan.
Discounts and Bonuses: Zurich Vista offers various bonuses to enhance your savings:
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Welcome Bonus: Credited during the first 12 months of the policy, the amount depends on your monthly savings and the contract term.
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Loyalty Bonus: Paid every five years, refunding a percentage of the total yearly management charge deducted in the previous five years. Gradually increasing with each five-year interval.
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Maturity Bonus: Received at the policy maturity date.
Considerations:
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Early Surrender Implications: Surrendering the policy early may result in substantially lower returns due to early encashment penalties.
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Long-Term Commitment: Zurich Vista is recommended for long-term financial goals, not suitable for short-term objectives.
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Monthly Premium Commitment: Committing to a high monthly premium is cautioned if uncertain about maintaining that level for the plan's duration, as fees are dependent on the initially agreed premium.
Before committing to a Zurich Vista savings plan, it is crucial to assess your ability to commit to a long-term plan and understand the potential implications of early surrender, emphasizing the need for clarity on financial goals and premium commitments.