HSBC Life announced the launch of Aspire Prime Indexed Universal Life (IUL), amid evolving regulatory developments in IUL insurance in Hong Kong and the surging demand from high-net-worth individuals for a broad range of legacy solutions.
In March, the Hong Kong Insurance Authority and the Hong Kong Monetary Authority eased the regulatory measures for IUL insurance products when offered to professional investors. Authorities have recognised that certain provisions for investment-linked assurance schemes and linked long-term business may not be strictly applicable to IUL products.
According to HSBC, Aspire Prime will enable policyholders to access the S&P 500, Hang Seng Index, and the LBMA Gold Price Index USD AM. “The tracking of Gold Prince Index is a first in the [Hong Kong IUL] market, providing policyholders an opportunity to diversify investments beyond equities,” the business stated.
Policyholders can choose to allocate their premiums to either an Index Account, linked to the index performance, or a General Account, which earns daily interest.
In addition, HSBC’s new IUL offer includes downside protection to safeguard against market volatility. This feature covers 0% minimum rate for the index account when the underlying performance is negative.
A cumulative guaranteed 3% interest rate per annum is also offered on the premium paid, less charges, upon full policy surrender.
Commenting on the launch, Daisy Tsang, HSBC Life chief executive in Hong Kong and Macau, said: “As a leading insurer in Hong Kong, we are excited to be among the first insurers to launch an Indexed Universal Life product, as we see a strong demand from wealthy clients across Asia showing interest to allocate their wealth into insurance products.”
IUL policies provide life coverage combined with a cash value component and flexible premium payments. The cash value is either partially or entirely linked to the performance of one or more financial indices. The IUL structure specifically allows policyholders to benefit from market gains alongside protective features, subject to market caps and floors set by the insurer.
