AIA Deferred Annuity Plan is a participating insurance plan that provides guaranteed cash value, guaranteed Monthly Annuity Payment and non-guaranteed Monthly Annuity Payment for retirement. You can specify a person to become the annuitant†, who is the person to receive the Monthly Annuity Payment during the Annuity Period.

You can choose for the annuitant to start receiving Monthly Annuity Payment at age 50, 55, 60, 65 or 70 (i.e. the Annuity Payment Start Age). Alternatively, you can choose to accumulate the Monthly Annuity Payment in your policy to potentially gain interest for your withdrawal later. If no payment option has been chosen by you, AIA will pay the Monthly Annuity Payment to the annuitant monthly. You can change your payment option without additional charge.

Also, once the policy has been in force for a year, AIA will provide you with a one-off non-guaranteed cash amount (if any), called a Terminal Dividend if:

1. you surrender the policy;
2. the annuitant as the insured, who is the person protected under the policy, passes away before the policy matures and the death benefit is payable in lump sum (according to the death benefit calculation); or
3. the policy matures.

Monthly Annuity Payment is comprised of both guaranteed and non-guaranteed portions. During the Annuity Period, the guaranteed cash value of this plan will decrease when the guaranteed Monthly Annuity Payment begins whilst non-guaranteed Monthly Annuity Payment will be credited into your policy on a monthly basis. Both Terminal Dividend and non-guaranteed Monthly Annuity Payment are a share of divisible surplus (if any) from
the product group.

You can also choose for the annuitant to receive the guaranteed Monthly Annuity Payment under the level pattern or the increasing pattern when applying for this plan:

Level pattern: A fixed amount of guaranteed Monthly Annuity Payment is paid monthly giving the annuitant greater stability during retirement.

Increasing pattern: Guaranteed Monthly Annuity Payment amount increases by 5% every 3 years to help with the effects of inflation.

^† In order to be eligible for tax deduction, the annuitant must be you or your spouse. For details on tax deductions, please visit the website of Inland Revenue Department (IRD) of HKSAR or contact IRD for tax related enquiries. You can also consult your tax and accounting advisors for tax advice.

AIA Deferred Annuity Plan is denominated in US dollars, the minimum annual premium is US$4,800. With a 5-year premium payment term and premium amounts are guaranteed to remain stable throughout the entire period of your payments.

You have to select the ① Annuity Payment Start Age and ② Guaranteed Monthly Annuity Payment Pattern when you apply the policy (see the table below).

To provide you with a greater flexibility, you may opt to change once for each of these options during the following period:

1. from the end of the 2nd policy year or when the annuitant reaches age 49 (whichever is later), to
2. for the change of Annuity Payment Start Age, you should apply for 30 days before both the originally and newly selected Annuity Payment Start Age; for the change of Guaranteed Monthly Annuity Payment Pattern, you should apply for 30 days before your selected Annuity Payment Start Age.

All subsequent guaranteed Monthly Annuity Payment, any non-guaranteed Monthly Annuity Payment, guaranteed cash value and any Terminal Dividend will be adjusted according to your choice of Annuity Payment Start Age and / or Guaranteed Monthly Annuity Payment Pattern.

You can decide the amount of guaranteed Monthly Annuity Payment at the time of your application. The amount of any non-guaranteed Monthly Annuity Payment may fluctuate during the Annuity Period.

Before AIA makes payments, including Monthly Annuity Payment, surrender value, policy value at maturity and death benefit, AIA will deduct all outstanding debt under your policy.

Provided that the insured is alive at the end of the benefit term, the policy will mature and AIA will pay you any accumulated Monthly Annuity Payment with interest accrued (if accumulation has been chosen as the payment option of Monthly Annuity Payment) and any Terminal Dividend in a lump sum.

If the insured passes away, AIA will pay the death benefit to the person whom you select in your policy as beneficiary. The amount of death benefit will be calculated according to the tables below.

In either of the cases above, AIA will deduct all outstanding debt under your policy before AIA makes the payment of death benefit to the beneficiary.

Apart from lump sum payment, during the insured’s lifetime, you can choose in advance to let the beneficiary continue receiving the unpaid Monthly Annuity Payment from the insured’s death (the death should occur on or after the commencement of the Annuity Period) until the end of the Annuity Period. If there is any accumulated Monthly Annuity Payment accrued before the insured passes away, such amount with any interest will be paid in a lump sum to the beneficiary at the time of the insured’s death.

Simply Love Encore 5 provides guaranteed cash value, non-guaranteed Annual Dividends (if any) and non-guaranteed Terminal Dividend (if any).

If the insured passes away and no contingent insured has become the new insured, AIA will pay the death benefit to the person whom you select in your policy as beneficiary. The death benefit will include the higher of:

1. guaranteed cash value; and
2. the total premiums paid or one-time premium paid (if applicable) for the basic plan;

plus

• non-guaranteed Annual Dividends (if any) that have accumulated with interest (if any) under the policy;
• non-guaranteed Terminal Dividend (if any); and
• any remaining balance of the Terminal Dividend Lock-in Account (if applicable).

All outstanding debt under the policy will be deducted before making the above payment to the beneficiary.

In addition to the death benefit, if the insured passes away due to a covered accident within the first 12 months of the policy, the accidental death benefit will equal the total premiums paid or one-time premium paid (if applicable) for the basic plan. The maximum aggregate amount of the accidental death benefit with respect to the same insured under all Simply Love Encore 5 polices is US$100,000 / HK$750,000 and the benefit payable under each policy will be prorated according to its total premiums paid or one-time premium paid (if applicable) for the basic plan.

Through the Terminal Dividend Lock-in Option, Simply Love Encore 5 enables you to realise potential returns by transferring the latest value of the non-guaranteed Terminal Dividend into a Terminal Dividend Lock-in Account to earn interest at a non-guaranteed rate. This is available once per policy year, starting from the end of the 15th policy year.

To provide further flexibility for your financial needs throughout various life stages, subject to AIA ’s rules and regulations, you can also withdraw cash from the Terminal Dividend Lock-in Account anytime without reducing the principal amount of your policy, where the principal amount is used to calculate the premium and relevant policy values and will not be payable as death benefit.

Any balance of your Terminal Dividend Lock-in Account may accumulate at a non-guaranteed accumulation interest rate that may be declared by AIA from time to time.

During the lifetime of the current insured after the end of the 1st policy year, the Change of Insured Option allows you to change the insured to another loved one, in whom you and the beneficiary have insurable interest. That way, the value of your policy can be inherited by later generations, adding extra flexibility to your legacy planning.

With the Contingent Insured Option, during the lifetime of the current insured, you can designate another loved one as a contingent insured, in whom you and the beneficiary have insurable interest. There is no limit on the number of times you can designate, modify or remove a contingent insured, as long as it is done during the lifetime of the current insured, but you may only have one contingent insured per policy at any time during the benefit term. Upon the passing of the current insured, the contingent insured may become the new insured without affecting your policy values so as to protect your legacy for the next generation.

You may change the insured under the Change of Insured Option and / or the Contingent Insured Option as many times as you wish, subject to AIA’s approval.

During the lifetime of the insured, you can select specific benefit amounts to be paid to your beneficiary at regular intervals chosen by you, provided that the total annual payment is equal to at least 2% of the sum of the death benefit and accidental death benefit.

The remaining amount of benefits will be left with AIA to accumulate interest at a non-guaranteed interest rate determined by AIA, until the full amount of benefits has been paid to the beneficiary.

The Death Benefit Settlement Option is not available if the sum of the death benefit and accidental death benefit payable is less than US$50,000^*.

^*If the policy is issued in a currency other than US$, the amount would be

available in the respective policy currency and the prevailing exchange rate will be used to calculate the above amount.

Unemployment may cause a significant impact on your finances. To help ease your financial burden while keeping the insured protected, you may claim for the Unemployment Benefit if you are laid off and become involuntarily unemployed during the premium payment term of the basic plan. Once your application approved, the grace period for late premium payment under the basic plan and any add-on plans will be extended from 31 days up to 365 days. The Unemployment Benefit is available once per policy and relevant proof is required.

No medical examination is required for your application as long as the total annual premiums or one-time premium payment (if applicable) does not exceed the aggregate limit set for each insured, subject to AIA’s prevailing rules and regulations.

With Simply Love Encore 5, you can select from three premium payment terms according to your personal financial needs. You can choose a one-time premium payment, or you can spread payments over a 5-year or 10-year period.

Provides you with guaranteed cash value, guaranteed death value, guaranteed annual income, as well as non-guaranteed Annual Dividends (if any).

Once the policy has been in force for 5 years or more, it will also provide you with a one-off non-guaranteed Terminal Dividend (if any) if:

• you surrender the policy; or
• the insured, who is the person protected under the policy, passes away and the death benefit is payable in a lump sum.

You may also choose to receive the guaranteed annual income and non-guaranteed Annual Dividends (if any) in cash or allow these sums to accumulate in your policy with potential interest (if any), and withdraw them at any time on or before the maturity of your policy in a lump sum.

You can choose a one-time premium payment, or you can spread payments over a 3-year or 5-year period and receive the guaranteed annual income from the end of the policy year after the policy paid up, until the end of the income period (the income period is the period during which you will receive guaranteed annual income).

Offers guaranteed annual income throughout the income period.

You can also choose to receive your guaranteed annual income under the level mode or the increasing mode when applying for this plan:

If the insured passes away within the first 3 policy years (for one-time premium payment policy) / prior to the commencement of the Income Period (for 3-year or 5-year premium payment policy)

If the insured passes away after the end of the 3rd policy year (for one-time premium payment policy) / after the start of the income period (for 3-year or 5-year premium payment policy), but before the policy matures

If the insured passes away due to a covered accident within the first 3 policy years (for one-time premium payment policy)/ prior to the commencement of the Income Period (for 3-year or 5-year premium payment policy), AIA Spring Income Plan also pays an additional benefit equal to the total annual premiums paid for the basic plan with no extra premium loading. The maximum aggregate amount payable relating to this benefit is US$1,000,000 / HK$7,500,000 taking into account all policies issued with any benefit of a similar nature paid or payable for the same insured.

At the end of the benefit term, the policy will mature and a maturity benefit will be paid to you. This benefit will include:

1. accumulated guaranteed annual income with interest (if any); and
2. accumulated non-guaranteed Annual Dividends with interest (if any).

AIA will deduct all outstanding debt under your policy before making payment to you and provided that the insured lives till the end of the benefit term.

No medical examination is required, subject to the prevailing rules and regulations