Centennial Max Plan: Structured Single Premium Investment-Linked Insurance

In this volatile market, more investors are looking for conservative investment with capital preservation. That’s why there are so many structured fund being launched recently, including PNB Structured Investment Fund and Takaful MyAl-Afdhal. The latest structured investment fund from Great Eastern is the Centennial Max Plan.

If you are looking for something that has potential to beat the return of Fixed Deposit and gives a capital protection feature, structured funds might be your cup of tea.

Below is the information taken from Great Eastern about the newly launched Centennial Max Fund.

FREQUENTLY-ASKED QUESTIONS

Q : What is Centennial Max Plan?
A : Centennial Max Plan is a 5-year Single Premium Investment-Linked Plan with 100%
capital protection if held to maturity. This plan is available from 27 May 2008 (Tuesday) to
26 June 2008 (Thursday).

Q : What are the unique benefit(s) for Centennial Max Plan?

A : Centennial Max Plan provides: -

100% capital protection if the policy is held to maturity.

Access to a specially-designed investment-linked fund called the “Centennial Max Fund”
that offers:
1. An opportunity to gain potentially higher returns linked to a Dynamic Basket that aims to generate consistent returns with low volatility.

2. Capital protection and performance linked to a Dynamic Rebalancing Strategy that captures returns in both Bull and Bear markets.

3. Death and TPD coverage for standard lives.

4. Death coverage for substandard lives.

Q : What are the qualifying criteria to entitle for this plan?
A : To be entitled for this plan, the policy owner has to fulfil the following criteria: -

1. Purchase of Centennial Max Plan within 27 May 2008 (Tuesday) to 26 June 2008 (Thursday).
2. Minimum and maximum entry age for Centennial Max Plan applies.
3. A complete proposal form and other documentary evidence with submission or registration date must be within the period of 27 May 2008 to 26 June 2008.
4. Child lien is applicable to the Death and TPD Benefit.
5. Available for standard lives and substandard lives.

Q : What is Centennial Max Fund

A : Centennial Max Fund is designed for investors looking for diversification of their portfolio returns while providing protection on 100% capital amount upon maturity. This fund invests in a structured product issued by OCBC Bank (Malaysia) Berhad, which consists of two components:

1. Ringgit-denominated financial instruments, such as money market instruments and/or fixed income securities, and
2. A Euro-denominated option on a portfolio of indices (the Reference Index) and defensive assets, such as a zero coupon bond. The Reference Index refers to the BNP Paribas Spectrum Long/Short Style Excess Return Index, which:
• Employs a 100% market neutral investment strategy
• Aims to generate high and consistent returns with low volatility, by investing in a
portfolio of 8 indices in US and Europe.

Q : What are the riders available for attachment?
A : No riders are available for attachment.

Q : Who can apply for Centennial Max Plan?
A : Insured: Minimum: 1 month attained age
Maximum: 70 years old next birthday
Policy owner: Minimum: 19 years old next birthday
Maximum: 70 years old next birthday

Q : Are there any discount given for female, non-smoker or large Sum Assured?
A : There will be no discount for female, non-smoker and large Sum Assured discount for this policy.

Q : Can Centennial Max Plan be backdated?
A : No, backdating is not allowed.

Q : What are the minimum and maximum single premium allowable for Centennial Max Plan?
A : The minimum and maximum single premium allowable are: -
Minimum: RM20,000
Maximum: RM1 million per life (Standard Life)
RM250,000 per life (Substandard Life)

Q : What are the minimum and maximum Sum Assured allowable for Centennial Max Plan?

A : The Sum Assured is dependent on age at entry and standard/substandard lives as stated below:

Standard Lives

Age at Entry Sum Assured (RM)
1 – 40 125% of Single Premium
41 – 50 110% of Single Premium
51-70 105% of Single Premium

Substandard Lives

Age at Entry Basic Sum Assured (RM)
1 – 70 105% of Single Premium

Q : Is this plan offered to substandard life?

A : This plan is offered to substandard life with Death coverage only.

Q : Can Centennial Max Plan be issued as a third party policy?
A : Yes.

Q : Can Centennial Max Plan be any citizen or permanent resident as life assured or policy owners?
A : Centennial Max Plan can be sold to any citizen or permanent resident except US citizen or US permanent resident as life assured or policy owners.

Q : What are the payment methods available for Centennial Max Plan?

A : Policy owner can pay their FULL single premiums by cash, banker’s cheque or cheque. Partial payment is not allowed.

Q : Is partial withdrawal available under Centennial Max Plan?
A : Yes, by selling some of the units at the Bid Price in one or more of the invested funds subject to the following conditions: -

1. If the value of the invested fund from which units are to be withdrawn is less than or equal to RM 40,000, then all units from that fund must be withdrawn and sold.

2. If the value of that invested fund is more than RM 40,000, then the minimum withdrawal amount must equal to RM 20,000 and the remaining units in that invested fund equal to RM 20,000.

3. The withdrawal has to be done in units, not in RM.

4. The amount payable upon any withdrawal will be equal to the value of the cancelled units at the bid price on the next valuation date of the fund after the Company has received the policy owner’s request on the Company’s prescribed form on a date which is at least two (2) business days prior to the next valuation date. If, however, the Company receives such request on a date which is less
than two (2) business days prior to the next valuation date, then the bid price on the valuation date immediately following the said next valuation date will be used to calculate the amount payable for the cancelled units.

5.Since forward pricing is adopted, all transactions occurring on any day will be based on the unit prices determined at the next applicable valuation date, not the unit prices currently available. That is, the policy owner will not know the exact withdrawal amount from surrendering units until the next applicable valuation date after the withdrawal request is received by the Company.

Q : Is fund switching available under Centennial Max Plan?
A : No, fund switching is not available under Centennial Max Plan.

Q : Is Policy Loan available under Centennial Max Plan?

A : No, Policy Loan is not available under Centennial Max Plan.

Q : What are the available modes of payment for Centennial Max Plan?

A : Only Single Premium (one time off) payment mode is available for Centennial Max Plan.

Q : Can I increase the Sum Assured of Centennial Max Plan?

A : No, Increase in Sum Assured is not allowed for this plan.

Q : Can I decrease the Sum Assured of Centennial Max Plan?
A : No, Voluntary Decrease in Sum Assured is not allowed for this plan. However, when a partial surrender of the investment values is made, the Sum Assured will automatically be decreased to the Sum Assured prior to the withdrawal less the amount withdrawn, subject to the minimum Sum Assured required of RM6,000 (for inforce).


Q : If a policy owner decides to cancel the policy after it has been issued, will there be any refund?
A : If a policy is cancelled within the 15-days free-look period, the sum of Total Investment
Values of the policy based on the bid price at the next valuation date and Bid-Offer
Spread; less the expenses incurred for medical examination, if any, will be refunded.

Q : Can Centennial Max Plan be assigned?

A : Yes.

Q : Does Centennial Max Plan qualify for tax relief?
A : Yes.

Q : What are the charges deducted under Centennial Max Plan?
A : There will be no charges (Insurance Charge, Fund Management Charge, Policy Charge) for this plan except Bid-Offer Spread of 5%.

Q : How are premiums being allocated?
A : 100% of Premium will be allocated to the unit funds, subject to Bid-Offer Spread of 5%.

Q : What is the frequency of fund valuation?
A : The frequency of fund valuation is twice a month. The fund is valued on the 15th if it is a business day (otherwise it will be on the next business day), and last business day of each calendar month.

Relevant Press Release of Centennial Max Fund:
Great Eastern plans two more products this year,theedgedaily.com,Business Times Online

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