Greatlife Portfolio Insurance – Regular Premium Investment Link Plan

During this week, I will post a series of Great Eastern Insurance Life Assurance products review. An analysis will be posted everyday from Monday to Friday as scheduled below:

  • Monday: Greatlife Portfolio Insurance (Regular premium investment-linked plan)
  • Tuesday: Supreme Living Care Plus (Whole life living participating assurance plan)
  • Wednesday: Great Junior/Income Advantage Series 2 (Whole life income plan)
  • Thursday: Great Eduplanner (Education Endowment Plan)
  • Friday: Supreme Care (Whole life non-participating plan)

In this article, I will show you the details, benefits, features and popular riders of the bestselling regular premium investment-linked plan from Great Eastern: GREATLIFE PORTFOLIO INSURANCE (GPI), also known as GREAT PROTECTLINK INSURANCE. Before I introduce the features to you, let’s look at the reason why GPI is a bestselling insurance product

Why People Love GPI

Almost 90% of my clients own a Greatlife Portfolio Insurance plan. People prefer GPI for the following reasons:

  • GPI is the only all-in-one plan, which will give you all the necessary protection in one single plan. If you only want to own one life insurance policy in your whole life, this is the best plan for you.
  • GPI provides flexibility for policyholder to alter the protection, supplementary benefits, premium increase/decrease. This flexibility enable you to change the overall protection according to your needs in different stages of life.
  • GPI allows you to decide the investment strategy of your allocated premium. You can choose to invest in more aggressive portfolio or conservative funds, switch between funds, and also reallocate your premium apportionment at any point of time.
  • GPI allows you to redeem your investment return without the need to surrender the policy. It is also not in the form of policy loan where you need to pay interest. Just fill in a form to redeem the cash value by selling off a certain number of unit fund.
  • GPI is a very transparent insurance products that shows you in details where your money goes after paying premium.
  • GPI can be designed in a way that it is sometimes even cheaper than a term policy. You can buy a GPI that maximizes protection. You can also own a GPI that maximizes cash value. Most of the time, people will choose a GPI designed in between the two extreme. Anyway, it all depends on the client’s personal needs and budget. GPI is like Web 2.0 – can be customized to suit a person’s preference. ( Highly customizable)
  • Premium holiday is allowable at any time, on your own comfort, without interest charges.
  • For younger folks, GPI can provide a very comprehensive protection with affordable premium.

Basic Plan

GPI is a whole life regular premium investment-linked insurance plan. The premium is payable until age 99 with as low as RM100 per month. In contrast to single premium policy, regular premium policy requires the policyholder to pay a fixed amount of premium in a regular basis, most of the time until the policy matures. A policyowner may cease premium payment at any time. The policy will lapse if the Total Investment Value (TIV) falls to zero and below. The policy values of this plan will vary directly with the performance of the unit funds.

Cash Value ties directly to the Funds’ Performance

A policyowner can choose to invest in one or more of these unit funds:

  • Lion Balanced Fund – A fund which invests in a mixture of equities (ranging from 40% to 60%) and fixed income securities. This fund seeks to provide medium to long-term capital appreciation, with a moderate level of volatility.
  • Lion Growth Fund – A fund where 70% to 100% of the investment instruments are equities, which may be volatile in the short term. This fund seeks to provide medium to long-term capital appreciation.
  • Dana Restu (formerly known as Barakah Fund)A fund where 70% to 100% of the investment instruments are equities, which may be volatile in the short term. This fund seeks to provide medium to long-term capital appreciation. Dana Restu invests in Syariah-approved securities.
  • Lion Fixed Income Fund – A fund which invests in fixed income securities like government and corporate bonds (ranging from 40% to 95%) with the balance invested in cash and cash equivalents. This fund seeks to provide consistent return at low levels of volatility.
  • Lion Progressive Fund – A fund which invests in a mixture of equities (ranging from 50% to 90%) and fixed income securities. This fund seeks to provide medium to long-term capital appreciation, with a moderate-to-high level of volatility.
  • Dana Sejati (formerly known as Mauzuun Bond Fund) – A fund which invests in fixed income securities like government and corporate bonds (ranging from 40% to 95%) with the balance invested in cash and cash equivalents. This fund seeks to provide consistent return at low levels of volatility. Dana Sejati invests in Syariah approved securities.
  • Lion Strategic Fund – A fund which invests in a mixture of equities, fixed income securities and money market instruments. There is flexibility in asset allocation as this fund may invest solely in fixed income securities or equities. This fund seeks to provide medium to long-term capital appreciation, with a moderate level of volatility.

You can get more information on the investment-linked funds at Great Eastern company homepage. Unit fund prices is updated daily and previous year annual investment report are also available for download if you are a policyholder.

Basic Benefit

The basic sum assured covers death and total permanent disability (TPD) until age 99. There are 4 situations which the policy will cease:

  • Death of the policyholder – Total benefit of sum assured plus Total Investment Value (TIV) will be paid to the beneficiaries
  • Total Permanent Disability – Total benefit of sum assured plus TIV can be claimed by the life assured. Alternatively, life assured can opt to claim only the basic sum assured, and left the TIV in the policy if waiver premium rider is attached. For this case, the policy will still carry on
  • Zero cash value – When there is no TIV left in the policy (due to insufficient funds), the policy will cease automatically
  • When the policy mature at age 99, and I don’t see any reason why a person would keep GPI until age 99 because the insurance charges will be ridiculous at old age.

I previously wrote an article showing you some practical strategies to avoid investment-linked policy lapse.

Supplementary Benefits (Riders)

Besides the basic 2D coverage (Death & TPD), what make the plan appealing is the flexibility to add in, modify, change, reduce, increase many supplementary benefits that is only available if you have a basic plan of GPI. There are more than 10 riders available, but I will just elaborate the most popular riders here.

  • Critical Illness Benefit Rider – covers the event of 36 dread diseases. The benefit amount shall not be more than the basic sum assured
  • Great Income Rider – In the event of the Life Assured becoming Totally and Permanently Disabled (TPD) as defined in the policy before the policy anniversary on which his age next birthday is 65 years, the Company shall pay 10% of the Sum Assured annually commencing from the next policy anniversary up to the policy anniversary age 65 next birthday.
  • Health Protector – Hospitalization and surgical benefit. 4 packages available which provide different room & board limits and overall lifetime limit.
  • Premier Comprehensive Accidental Benefit – This Supplementary Benefit provides coverage in the event of death or injury caused solely and directly from accident. The coverage is extended to accidents arising from assault, murder, riot, hijacking, kidnapping and civil commotion.
  • Waiver Premium Plus – This rider waives all annual premiums for Investment-Linked policies upon Total and
    Permanent Disability or occurrence of any 36 critical illnesses whichever is earlier. Also known as investment replacement, this is a great feature that beats unit trust.

Premium Allocation


Figure 1: Premium allocation schedule

The premium paid is subjected to allocation. For every premium paid, the money goes into two portions:

  • allocated premium
  • unallocated premium

Allocated Premium
This section shows the ratio of premiums that is used for investments (to buy units). The schedule of allocation is as following:
Year 1-2 – 42.75%
Year 3-4 – 76.00%
Year 5-6 – 85.50%
Year 7 onwards – 99.75%

This portion of premium will be used to purchase investment fund unit. Insurance charges and policy fees will be deducted by selling off unit fund.

Unallocated Premium
This section of the premium is used to pay insurer’s expenses including the commissions payable to the agency force / other intermediaries in the investment-linked funds.

Quotation Analysis


Figure 2: Sample of GPI illustration

Great Eastern provides its agency force with a regularly updated software – GELSIS to generate the insurance plan illustration. GPI illustration is over 20 pages. If you want to look at a sample, please contact me and provide details such as date of birth, premium budget etc.

For the insightful analysis of the quotation, you can refer my previous post that show how to calculate the insurance charges and cash value.

Protection, Cash Value & Premium Chart


Figure 3: Death benefit, Cash Value and Total Premium paid chart

Red line – Death Benefit increases parallel with cash value (green line)
Blue line – Total premium paid
Green line – projected total investment value (TIV)

In Figure 3, the green line will never hit the blue line, indicating that the TIV is always less than the premium paid. The graph may varies in different circumstances depends on the below factors:

  • investment fund performance
  • changes of insurance charges – fees increase according to age
  • alteration of riders and basic sum assured will alter the insurance charges as well
  • investment top up

If the red line (protection) is lowered, it is very easy to get the green line (cash value) surpass blue line (premium paid) around 20 years.

Transparency: Quarterly Statement

GPI is a very transparent plan. Great Eastern sends four statements to policyholders in one calendar year. If you are a GPI owner, refer my tutorial on how to read the investment-linked policy financial statement.

Tomorrow, I will show another great bestselling products from Great Eastern Life Assurance. Stay tuned!

INSURANCE JARGON

Rider: a life insurance rider is insurance that:

  • is attached to a policy of life insurance
  • adds specified events and contingencies to those insured under the policy
  • is subject to the terms and conditions of the policy.

Regular Premium: insurance premium is payable periodically (monthly, quarterly, half-yearly & yearly) for a period of time , normally until the policy matures.

Investment-linked plan
(ILP): insurance products that give protection features with cash value ties to investment fund performance calculated in unit value.

TIV (total investment value): equals to the cash value policyholders get when they surrender their investment-linked policies. It is calculated using this formula – TIV = No.unit x unit price

Other Great Eastern’s product:
Investment-linked, Supreme Livin’ Care Plus and GMBS, Which to buy?
Great Eastern MediCare 100: Protected up to hundred years old

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30 Comments

  • ronnie

    Reply Reply April 29, 2008

    hi kclau,
    i bought GE protectlink insurance a year ago.currently i’m paying RM200 permonth for it. i would like to know until when i can stop paying this insurance and what will be the amount i can gain? will i get back the money for on the unit trust?
    after the age of 60, can i get back the amount i paid for the policy?

    Thank you.

    • KCLau

      Reply Reply May 2, 2008

      @Ronnie,
      In fact, all the money you paid are invested in the inv-linked funds you have chosen. The RM200/month will be used to deduct all your insurance charges ( this depends on how much protection you bought with the plan).
      You can register with http://www.lifeisgreat.com.my and you will be able to monitor how much cash value you have in your policy at any time.

  • Yu

    Reply Reply July 15, 2008

    hi,
    is the quaterly statement still in force ? i didnt receive any since last year. by the way, is policyholder entitle for the cd rom on fund performance?
    thank you.

    • KCLau

      Reply Reply July 16, 2008

      Great Eastern just updated their system to cope with large amount of new policies. After the update, the statement is no longer sent quarterly. It will be half-yearly or twice a year.

      I only receive my statement after the update around May. You will have to wait another 6 months for the other update.

  • Bee

    Reply Reply April 8, 2009

    4 years ago, I have bought the GE Protectlink Insurance comprise the health protector, sum assured RM150. My question are:
    1) I have migrated to UK and the health care is free here. Should I withdraw this protection and invest on other riders.
    2) There are private hospitals in UK too, can I claim the oversea hospitalisation bill?

    Please advise.

    • KCLau

      Reply Reply April 9, 2009

      @ Bee,

      1. Since you have migrated, I don’t think you need the health protector anymore.
      2. It is only claimable for a certain period after you left Malaysia (just a few months, not years).

  • Bee

    Reply Reply April 10, 2009

    I do ask my agent before, her comment is that I should keep it just in case I will back to M’sia. In fact, I will only back for holiday.
    My protectlink insurance attached with i)waiver of premium-TPD ii)waiver of premium-DD iii) Great income rider iv)IL health protector v)critical illness benefit rider. The cover started in year 2004.

    1. Since you think that I dont need the health protector, what should I do? What is the loss?
    2. The term “claimable”, is refer to
    i) only the oversea hospital bill which is within few months period is claimable?
    ii) as long as I have left malaysia for few months period, I will not entitle to claim hospitalisation bill?
    iii) do I still have the cover during my holiday in M’sia?
    iv) if death,TPD occured in oversea, my nominee still get the premium?

  • Bee

    Reply Reply April 21, 2009

    Hi KC Lau,
    Do you have any advices for the above questions?

  • KCLau

    Reply Reply April 22, 2009

    Hi Bee,

    These are very important questions that I can’t give a definite answer. I suggest that you contact customer service department via http://www.lifeisgreat.com.my (GE’s website) to get their direct response.

    As far as I know:
    1. You can ask your agent to help to process the cancellation of ILHP rider if you think it is not needed anymore.

    2.
    i) it is within 90 days after your went oversea
    ii) you can’t claim when you are oversea for too long (over 3 months)
    iii) you will be covered when you are in Malaysia, even for holiday
    iv) other than H&S, other benefits are worldwide.

  • Bibiana

    Reply Reply August 7, 2009

    Dear KC,

    Can I buy an investment linked insurance solely for investment purposes and not the protection as I do not need the protection?

    Please advise. Thank you.

    Bib

    • KCLau

      Reply Reply August 10, 2009

      There are several kind of investment-linked products.
      For solely investment purposes, look for single-premium investment-linked products, or top up option of a regular premium products.

    • Shereen

      Reply Reply February 24, 2010

      Hi, Bibiana.
      Of course you can buy and i suggested for safe deposit plan. If you interested and for more further details, feel free to contact me at 016-716 0065.

      Thanks,
      Shereen

  • Ashlynne

    Reply Reply April 21, 2010

    Hi KC, I have a question regarding ILP premium payable.

    Over http://kclau.com/insurance/investment-linked-vs-traditional-insurance/
    The graph for insurance charges or premium increases exponentially. Which means the older you get, the more you have to pay for premium.

    However under your Quotation Analysis in this post, your table shows constant premium payment (RM 4000) even as the policy owner ages. How does that work? Does policy holder pay the premium for old age up front already? I’m confused, please enlighten me as I’m contemplating ILP and I don’t want to pay for ridiculous premium that increases exponentially at old age. I’m looking for an ILP that collects constant premium even as I age.

    • KCLau

      Reply Reply April 22, 2010

      Premium and insurance charges is different.
      Paying RM4000 is for the premium. The insurance charges will be deducted from the premium paid.
      In fact, premium is first used to purchase investment-linked fund, then only being deducted for insurance charges on monthly basis.

      Since the policyholder pays more money at the initial years, there will be more funds unit accumulated over the years. At later stage when the insurance charges is even higher than the premium paid, it is assumed that the funds accumulated is adequate to pay for the extra.

      If you are young, you still have time to accumulate the fund.

  • Chuiling

    Reply Reply June 28, 2010

    Dear Sir

    I also have the policy: GREAT PROTECTLINK INSURANCE

    However, I may have to go overseas to stay for a few years. I wrote to GE about the issue and this is what they said:

    Your policy is free from restriction as regards residence, occupation or travel. You will continue to be covered during your stay overseas.

    Please note that no benefit whatsoever shall be payable for any medical treatment received by the Life Assured outside Malaysia, if the Life Assured resides or travels outside Malaysia for more than ninety (90) consecutive days.

    If you are planning to reside for an extended period overseas, you may consider cancelling the medical card (IL-Health Protector)

    -
    Does this mean my policy is redundant and there is no way to convert it to another, more appropriate one?

    Thank you for your kind attention and advice

    • KCLau

      Reply Reply July 3, 2010

      At this time, there are no oversea medical coverage (other than the first 90 days).
      If you don’t plan to come back, the policy may have no use for you unless you want to treat any illness here in Malaysia.

  • WT

    Reply Reply August 25, 2010

    I just bought an invenment-linked plan, How i want to know the insurance charges for my insurance? I want see the trend after n- years…I want see how much it increase after n-years.

  • Hash

    Reply Reply November 21, 2010

    Do you have brouchure for GREAT PROTECTLINK INSURANCE softcopy?

    Thx

  • as

    Reply Reply March 10, 2012

    Hi i always follow ur post.some of the info i can digest and understand however there r few methods that i dont get it especially when it comes to reducing coverage and i am confused when it comes to excluding unneccessary riders on my policy.i just bought with ge rm220 per month.ci 80 for stage 1&2 and 80k for ci stage 34,hospitalization benefit,waive tpd n ci till age99 pa income 50k(rm1500 per month light tpd) and medical card plan 150 with annual limit 90k and720k.how do u reduce coverage which rider should i exclude and dont need? When u said gettin older take out ci waiver? What age,condition? After retirement bcs i see the premium is high double wht i ve paid a year from the projection and by age 61 i have less cash value investment estimated 13k-30 k the highest and with that kind of balance i think at 65 my policy lapsed.i m thinking of tking another ilp link with cashless medical card ann limit 100k and 500k with another company no rider attached.just medicl card plus investment so with the cash value i can use to finance my premium if i live longer

  • as

    Reply Reply March 10, 2012

    And with inflation rate i wil get high ann limit on the medical card ,one cashless card 100k + ge 90k medicl card.d reason i bought ge bcs i like the coverage for ci n tpd is up till99 with waiver but i dont like the co insurance chrge on the cars.if i buy the cashless medical card ,it cover till age 99 but its lifetime limit is 500k ann limit 100k so i cn use this both card with 200k p.a and hv total of 1.2 mil coverage and by the time i m aging the value is half due to inflation.what do u suggest. I am 31 now and if i buy late premium will be high for medical card and hard to approve if no longer healthy n they will ask for medical report. Or should i just top up my current ci and upgrade my card? And top up investment at early stage to buy more unit n exclude hospitalization benefit rider and put it on ci or pa income?

    • KCLau

      Reply Reply March 13, 2012

      You should buy as much as you are afford comfortably now, and keep your premium within 10% of your income.

  • HENG MOOI FONG

    Reply Reply December 5, 2012

    Hi,
    I have ILHP before this. Got agent suggest me to buy another ILSM? And, the agent suggest me to keep the ILHP for at least one year, which mean I will be having 2?What should I do? As compared, ILHP benefit is lower…

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