Bonus Power Plan 2 (Enhanced Protection)

Our investment philosophy is to deliver stable returns in line with the product’s investment objectives and AIA’s business and financial objectives.

Our investment policy aims to achieve the targeted long-term investment results and minimise volatility in investment returns over time. It also aims to control and diversify risk exposures, maintain adequate liquidity and manage the assets with respect to the liabilities.

Our current long-term target strategy is to allocate assets attributed to this product according to the target asset mix on the asset class below:

• Bonds and other fixed income instruments: 30% - 50%
• Equity-like assets: 50% - 70%
   

The bonds and other fixed income instruments predominantly include government and corporate bonds, and are mainly invested in the geographic region of the United States and Asia-Pacific (excluding Japan). Equity-like assets may include listed equity, mutual funds and direct / indirect investment in commercial / residential properties, and are mainly invested in Asia. Returns of equity-like assets are generally more volatile than bonds and other fixed income instruments. Subject to our investment policy, derivatives may be utilised to manage our investment risk exposure and for matching between assets and liabilities.

Our currency strategy is to minimise currency mismatches. For bonds or other fixed income instruments, our current practice is to currency-match their bond purchases with the underlying policy denomination on best-efforts basis (i.e.: US Dollar assets will be used to support US Dollar liabilities). Subject to market availability and opportunity, bonds may be invested in currency other than the underlying policy denomination and currency swap will be used to minimise the currency risks. Currently assets are mainly invested in US Dollar. For equity-like assets, currency exposure depends on the geographic location of the underlying investment where the selection is done according to our investment philosophy, investment policy and mandate.

We will pool the investment returns from other long term insurance products (excluding investment linked assurance schemes and pension schemes) together with this participating insurance plan for determining the actual investment and the return will subsequently be allocated with reference to the target asset mix of the respective participating products. Actual investments (e.g. geographical mix, currency mix) would depend on market opportunities at the time of purchase. Hence it may differ from the target asset mix.

The investment strategy may be subject to change depending on the market conditions and economic outlook. Should there be any material changes in the investment strategy, we will inform policy owners of the changes, with underlying reasons and impact to the policies.

1. You should pay premium(s) on time and according to the selected premium payment schedule. If you stop paying the premium before completion of the premium payment term, you may elect one of the non-forfeiture options to surrender the policy or convert the policy to a non-participating insurance plan with life protection only. Compare with the original plan, such a plan will have less cover.
   
   If no non-forfeiture option has been selected, the premium will be covered by a loan taken out on the policy automatically. When the loan balance exceeds the sum of guaranteed cash value and cash value of Reversionary Bonus (if any) of the basic plan, the policy will terminate and you will lose the cover. The surrender value of the policy will be used to repay the loan balance, and we will refund any remaining value.
   
   
2. The plan may make certain portion of its investment in equity-like assets. Returns of equity-like assets are generally more volatile than bonds and other fixed income instruments, you should note the target asset mix of the product as disclosed in this product brochure, which will affect the bonus on the product. The savings component of the plan is subject to risks and possible loss. Should you surrender the policy early, you may receive an amount considerably less than the total amount of premiums paid.
   
   
3. We will terminate your policy and you / the person protected under the policy will lose the cover when one of the following happens:
   1. the person protected under the policy passes away;
   2. you do not pay the premium within 31 days of the due date and the policy has no cash value; or
   3. the outstanding debt exceeds the guaranteed cash value plus the cash value of the Reversionary Bonus (if any) of the policy.
       
4. We underwrite the plan and you are subject to our credit risk. If we are unable to satisfy the financial obligations of the policy, you may lose your premium paid and benefits.
   
   
5. You are subject to exchange rate risks for plans denominated in currencies other than the local currency. Exchange rates fluctuate from time to time. You may suffer a loss of your benefit values and the subsequent premium payments (if any) may be higher than your initial premium payment as a result of exchange rate fluctuations. You should consider the exchange rate risks and decide whether to take such risks.
   
   
6. Your current planned benefit may not be sufficient to meet your future needs since the future cost of living may become higher than they are today due to inflation. Where the actual rate of inflation is higher than expected, you may receive less in real terms even if we meet all of our contractual obligations.
   

We will not cover the person protected under the policy for any of the following, except in the event of the death of the person protected under the policy:

• Any illness or disability that manifested before the policy became effective, or within the 90 days after the policy became effective;
• Attempted self-destruction or self-inflicted injuries on the part of the person protected under the policy;
• Any congenital illness or disability that manifested prior to the date on which the person protected under the policy attained 17 years of age;
• Any disability caused by war, warlike operations or restoration of public order; and
• Entering, exiting, operating, servicing, or being transported by any aerial device except when the person protected under the policy is on a commercial passenger aircraft.

If the person protected under the policy commits suicide within one year from the date on which the policy takes effect, our liability will be limited to the refund of premiums paid (without interest) less any outstanding debt.

Except for fraud or non-payment of premiums, we will not contest the validity of this policy after it has been in force during the lifetime of the person protected under the policy for a continuous period of two years from the date on which the policy takes effect. This provision does not apply to any add-on plan providing accident, hospitalisation or disability benefits.

• You have the right to cancel and obtain a refund of any premiums and any levy paid by giving written notice to us.
  
  
• Such notice must be signed by you and submitted to the Customer Service Centre of AIA International Limited at 12/F, AIA Tower, 183 Electric Road, North Point, Hong Kong or the Customer Service Centre of AIA International Limited at Unit 1903, 19/F, AIA Tower, 251A-301 Avenida Comercial de Macau, Macau within 21 days after the delivery of the policy or issue of the written notice to you or your representative informing you that the policy is available, whichever is earlier.