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Pros and Cons of AXA Optimus – Review

AXA Optimus is an investment-linked insurance product offered by AXA agents and financial advisors. It is often positioned as a medium to a long term regular savings plan, and it belongs to a unique category of ILPs that can be used purely for investment, without any insurance element.

Given that the purpose is solely for investment, you might wonder why people would use an ILP for such a purpose. There are 3 main reasons why people do structure their investments through such a platform:

  • Minimize/avoid inheritance taxes
  • Minimize/avoid capital gains taxes
  • Gain access to funds that are typically only available to institutional or accredited investors

Given the above, it is little wonder that this is especially popular with expatriate clients who can mitigate their tax exposures through such a structure.

Optimus also appeals to many locals and residents because of the access it gives them to funds which they would not be able to access otherwise. These funds have the potential to offer them superior returns at lower risk, hence enhancing their investment portfolios.

The minimum saving amount starts from S$800/month, and there is flexibility to access or withdraw the accumulated monies as required (subject to partial withdrawal charge, if applicable).

AXA Optimus

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Pros of AXA Optimus

  • Tax efficiency
  • Access to ‘superior’ funds usually reserved for accredited investors
  • Direct control over investment mandate
  • Start up bonuses
  • Involuntary unemployment benefit

Cons of AXA Optimus

  • Investment returns are not guaranteed
  • Performance is directly correlated to the selection of fund(s) and the expertise, or lack thereof of the adviser. A poorly constructed portfolio can lead to unnecessary volatility and even potentially a loss of the amount invested.
  • Sub-optimal if used to access funds which are more efficiently accessed through other platforms
  • Longer term commitment required
  • For some reason, this may be one of the most mis-represented plans in the market. We have heard of representations ranging from guaranteed returns to short payment term (not technically true) to being able to get all your capital back whenever you want…

To find out how you can construct a robust investment portfolio (regardless of whether you are using AXA Optimus or not) and the key investment concepts that you absolutely have to know

To view simulations of AXA Optimus investment returns on a year by year basis and discover how exactly you can fully utilise the start up bonuses to boost your investment returns (something most advisers in the market are not aware of)

To learn more about the ‘superior’ funds on AXA Optimus that can complement your investment portfolio

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Besides AXA Optimus, you may want to read our post on other insurance plans at our homepage here.

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