AIA Pro Achiever 2.0 was a product which someone recently asked me about it. She was told by her insurance adviser that the return of 8% is guaranteed which is false. I proposed that we meet up so that I can provide her with sound financial advice, and she agreed.
1. What are the factual details for AIA Pro Achiever 2.0?
So, what are the information regarding AIA Pro Achiever 2.0 that are factually true?
Firstly, the AIA Pro Achiever 2.0 is an investment-linked policy that was manufactured for the purpose of investment. So, if you are looking for insurance protection, there are other products that are more suitable.
Secondly, its premium is meant to be paid as long as possible. However, it is possible to have a premium holiday (stop the premium). Based on my analysis, the recommended premium to pay should be at least 25 years (more on this later).
Thirdly, the AIA Pro Achiever 2.0 gives extra units according to the schedule below in the form of welcome bonus and special bonus. This is meant to encourage clients to stay with the policy for as long as possible.
Fourth, 100% of the premium will be invested. However, top-up premium will be charge 5%.
Fifth, the AIA Pro Achiever 2.0 has a supplementary charge for the first 10 years as shown below.
Sixth, there is a surrender charge for the first 10 years as shown below. Hence, this is one reason why I suggest that the premium be paid for at least 10 years.
Seven, in terms of investment choices, the client can select either:
- 3 Elite Funds. These Elite Funds have different risk profile.
- 3 Guided portfolios using ILP sub-funds below
- Ala cart ILP sub-funds consisting of about 30 funds.
2. My analysis on the AIA Pro Achiever 2.0
I ran my numbers and the following is the table of returns of assumed 8% rate of return for 1.45% management fee and $8400 per annual premium (and hence the highest welcome bonus).
| Years | Net IRR | Reduction in Yield |
| 10 | 1.88% | 6.1% |
| 15 | 4.82% | 3.2% |
| 20 | 5.52% | 2.5% |
| 25 | 5.86% | 2.1% |
My conclusion is that the 25 years premium is more reasonable from the cost perspective. A 10 year premium will be too costly at a whopping 6.1% per annum in reduction in yield!
3. Is AIA Pro Achiever 2.0 worth the purchase?
You may now wondering whether is the AIA Pro Achiever 2.0 worth the purchase.
All investors fall into three categories:
- Investors who are Do-It-Yourself or DIY.
- Investors who want to outsource to a company to manage
- Investors who want to receive financial advice on an on-going basis while retaining some level of control.
Investors who are DIY will be better off buying stocks themselves because there is zero management fee for stocks. Of course, most DIY investors will lose money.
For investors who wish to outsource to a company to manage, there are better products out in the market that has a larger welcome bonus and a lower reduction in yield.
As for the third category, I use other instruments depending on the situation and financial circumstances. I have never use AIA Pro Achiever 2.0 for any regular premium investment before primary because of the high cost and the lack of investment choices.
However, that does not mean I have never use AIA products. I have used AIA Elite Secure Income single premium for a few clients before. Before you jump to conclusion about single premium, I have use other non-AIA products for single premium investments too. And of course, I have used stocks and ETFs for investment too. It all depends on the financial situation of the client.
4. Download a comparison table of other investment-linked policies
There are many investment-linked policy in the market. The AIA Pro Achiever 2.0 is one of them. The following are some examples:
- AXA Life Wealth Accelerate
- AXA Life Wealth Harvest
- FPI Global Wealth Advance
- FWD FWD Invest Goal X
- Manulife InvestReady - Wealth (II)
- Manulife InvestReady - Wealth (II) Flexi
- SingLife Singlife Savvy Invest (fixed MIP)
- SingLIfe Singlife Savvy Invest (flexible MIP)
- TM #goUltra (Advanced DB)
- TM #goUltra (Basic DB)
- TM #goUltra Secure
- TM #goUltra (Advanced DB)
- TM #goUltra (Basic DB)
- TM #goUltra Secure
- TM #goTreasures
- TM #goTreasures Secure
- Utmost Worldwide Focus
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What do you think? Leave a comment.