In addition to life cover, Futura allows you to add any combination of the following optional benefits:
- Waiver of premium benefit
- Critical illness benefit
- Permanent total disability benefit
- Family income benefit
- Accidental death benefit
- Hospitalisation cover
- Dismemberment cover
Zurich Futura’s key features:
- You can add or remove benefit options.
- You can vary premium payments in line with your circumstances.
- You can choose to pay regularly, with single payments, or use a combination of both.
- You can pay your Futura premiums in one of a wide range of currencies.
International life insurance is compulsory on this product. You can then pay extra to cover serious illness, accident and long term care. Family income benefit is also available.
Whole of life insurance is designed to provide life insurance until age 85 or 95, and is a niche tool primarily of benefit for inheritance tax (IHT) planning.
The unit linked element of the policy exists to pay for the vastly increased cost of cover after the age of 55 - and is not intended to be accessed as a ‘cash back’ sum or used for retirement or other purposes.
Zurich's Futura Plan does not accrue any value whatsoever within the first 24 month, (this is known as a nil allocation period).
There is no investment value during this time because your contributions are largely being used to fund the commission paid to the salesperson or bank who sold this product to you.
The Zurich International Futura brochure states that the plan is flexible - specifically around:
- using any combination of rider benefits
- increasing or decreasing premiums
- increasing or decreasing, adding or removing benefits
- selecting how long cover is required
- encashing when no longer required
However, this flexibility is highly debatable.
The first risk warning on page 5 of the brochure states:
“Futura is a long-term commitment. Stopping or reducing premiums may cause your policy to lapse. If this happens the policy will end, all benefits will stop, and you will not get your money back.”
The subsequent risk warnings talk about the risks associated with the underlying investments. This is then followed by a list of statements which, in many ways, contradict the stated purpose and purported benefits of the product to the international expats to which it is commonly sold.
It may be argued that this product is not very flexible, and is both a very expensive and an unduly risky way to purchase protection.
Most ‘advisers’ who sell Zurich Futura forecast the underlying investment performance at 9% per annum after costs, which reduces the premium payable but, when this extremely unrealistic figure is not achieved, it means that Zurich will request a premium increase, reduce the cover or lapse the policy with no value.
Futura is a protection policy; it is not an investment policy.
Annually renewable international life insurance or pure international term insurance is, in our view, substantially cheaper, more flexible and less risky.
You may be able to get the same level of cover at around 20% of the cost, depending on how the policy is set up.
Zurich would argue that an alternative insurance such as 'annually renewable term insurance' might not be available if the clients’ health deteriorates to a position where they are no longer insurable.
Their 2015 statistics show that some two thirds of expatriates do not have adequate life cover, and during the course of that year: -
They paid an average sum assured of $207,235 on 51 life insurance claims totaling $10,569,000.
They paid and average CI sum assured of $118,029 on 121 critical illness claims totaling $14,281,524
Notwithstanding these statistics, this is not an optimum solution in our view, and is only likely to be sold via banks or other commission-driven salespeople who make a lot of money from selling the product.