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Pros and Cons of Manulife Heirloom

Manulife Heirloom is a universal life policy offered by Manulife (Singapore). It is a legacy planning tool that creates an immediate estate for the policyholder by paying a single premium. It is also used as keyman protection for companies insuring their most important employees.

There are four underwriting risk classes, and they are Standard, Standard Plus, Preferred and Super Preferred for both smoker and non-smokers. The underwriting class will be confirmed after the medical underwriting assessment is completed. The current version is version 5 (launched in July 2017)

Manulife Heirloom

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The current crediting rate is 3.9% per annum with guaranteed minimum crediting rate of 2% per annum. The minimum sum assured is USD 500,000 and this is an open tranched plan. The first-day cash value is slightly above 80% of the initial premium. Premium financing is available for leverage.

Pros of Manulife Heirloom

  1. An “Age 100 Advantage” feature which the policy will not deduct any mortality and policy charges after the life insured’s 100th birthday
  2. The maximum charge is capped at 110% of the initial charges
  3. Flexible payment option in which the policyholder can choose to pay over several years instead of a single premium lump sum
  4. A “Change of Life Insured” option that provides unlimited changes for keyman policy or maximum 2 changes for an individual policy. This is especially useful for keyman protection for companies
  5. A “Quit Smoking Incentive” feature that allows selected smokers to enjoy Standard non-smoker policy charges for the first 3 years

Cons of Manulife Heirloom

  1. The current crediting rate of 3.9% is lowered than other insurer’s crediting rate and is locked in for the first year only
  2. The single premium pricing is slightly higher compared to similar policies in the market based on the standard classification risk in general

As the current crediting rate of 3.9% is only guaranteed for the first policy year, it is prudent to find out the projected outcome of Manulife Heirloom (especially at which age the plan will terminate) based on a lower crediting rate such as 3.5% or 3% per annum.

To view a projection of Manulife Heirloom projected based on crediting rate between 3% to 3.9%

To know more Pros and Cons of Manulife Heirloom

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Besides Manulife Heirloom, you may want to read up more about universal life policy here.

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