Survey: Tax-Deferred Annuity Products Show Return Gap of Up to 45% at Maturity

One-stop Insurance Comparison Platform 10Life Releases Latest Market Survey Comparing Internal Rate of Return (IRR) of Eight Popular Tax-Deductible Annuity Products in Hong Kong, Reflecting Average Annual Returns

The survey found that, assuming a total premium payment of HKD 300,000, even after accounting for premium discounts and tax deductions, the maturity returns of different products vary significantly. The highest guaranteed return can be about HKD 218,500 more than the lowest, representing approximately a 45% difference.

The 10Life actuarial team compared the performance of eight popular products, including AIA Hong Kong, AXA, Bank of China Life, China Taiping, Chubb Life, Chubb Insurance, Prudential, and Manulife.

Although insurance companies offer various levels of premium discounts or rebates, 10Life emphasizes that while premium discounts can reduce actual payment costs, the intrinsic return structure of the product is the key factor determining long-term performance. All return data in this survey fully reflect the effects of premium discounts and tax deductions calculated at the 17% highest tax bracket, providing the most comprehensive return overview.

Regarding maturity returns, the product with the best guaranteed return is Bank of China Life, with a guaranteed IRR of 4.3%, and a guaranteed accumulated income of HKD 709,100 at maturity. In comparison, the product with the lowest guaranteed return has a guaranteed IRR of only 2.5%, with a total income of HKD 490,600, about HKD 218,500 less than the highest.

Including non-guaranteed dividends, the product with the best expected return is Chubb Life, with an expected IRR of 5.2%, and a projected total income of HKD 903,900 at maturity. The lowest expected return product has a total income of HKD 709,100, with a difference of HKD 194,800 between the two.