- Knowledge Centre
Zurich International Life is part of the Zurich Insurance Group, offering life insurance, investment and protection solutions throughout the world.
Operating in international markets around the globe for many years, Zurich Insurance Group employs around 60,000 people in 170 countries.
Zurich International provides individual savings, investment and protection products, and has established branches in Bahrain, Hong Kong, Qatar, Singapore, Taiwan and the United Arab Emirates.
Zurich Futura is a whole of life, unit-linked protection policy designed to provide life insurance.
It will pay out a sum assured upon the death of the policyholder.
In addition to life cover, Futura allows you to add any combination of the following optional benefits:
Zurich Futura’s key features:
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:
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.
There are a few! Not least is the fact this is meant to be an insurance policy yet it looks like anything but!
here's what you need to be aware of:
Buying 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.
Your choice of funds plays an important part in maintaining your level of benefits. You should always remember that the primary purpose of the funds selected by you is to ensure your benefits are maintained for as long as you need them.
Futura gives you the flexibility to choose funds from a comprehensive range covering a wide selection of asset classes and currencies. Each individual fund will have its own level of risk rating and it is very important that you discuss and understand your choice of funds with a financial professional.
The value of your policy is linked to your fund selection. The value of these funds can fall as well as rise and is not guaranteed.
If the investment return of the funds selected is less than illustrated, you may have to increase your premium payments to maintain your chosen benefits, or if your vanishing premium term has already ended, you may have to recommence premiums. If you choose not to increase/ recommence your premium payments, your policy value may fall to zero which means your policy will lapse and all benefits will stop.
If you choose to invest in more volatile funds and/or funds with a higher risk rating, the risk of not achieving your illustrated growth rate is increased as greater risk/volatility could result in large and sudden falls in the prices of funds.
If you make a withdrawal and your policy value is not sufficient to cover future policy and benefit charges, your policy may lapse and all benefits will stop.
If you don’t answer all the questions on your application fully, truthfully and accurately, Zurich may not pay a benefit claim.
Your premiums will be used to buy units in your chosen funds. The value of the units will increase or decrease depending on the investment performance of the fund(s).
The value of your policy, at any time, will be the current value of the units in the fund(s) you have chosen, less any charges.
Zurich says - you can invest in our low risk, managed or mirror funds...
Note: mirror funds can be extra expensive
From the tenth policy anniversary and each year thereafter, Zurich will add 0.5% each year of the policy value to your policy as a loyalty bonus.
For single life, joint life first death and joint life both death policies the bene t options are:
Any benefits are offered subject to underwriting (which may require medical examination/tests) and may be accepted on standard terms, at an increased rate, postponed or declined.
All benefits are offered on a yearly renewable basis.
With Futura, you can choose from a wide range of fund options as follows:
Low risk funds
These funds form the foundation of Zurich's investment range, and invest in cash, money markets and international fixed-interest securities.
Our range of managed funds offers differing levels of risk. The range offers the benefits of diversification across equities, cash and fixed- interest securities that are listed in the world’s stock markets. The asset allocation within these funds is managed by Zurich's fund adviser Threadneedle.
Mirror funds are created where Zurich have negotiated agreements with leading investment management organisations around the world to offer a range of funds to suit all risk appetites.
For each fund managed by these external investment managers, Zurich has created a fund, investing exclusively in the external fund (apart from small cash holding from time to time).
The mirror funds offer access to a range of specialist funds with more specific investment criteria than the managed funds. They include bond funds, equity funds and sector themed funds, e.g. healthcare, technology, property and commodities.
You should note that when investing into a mirror fund, the fund structure, charges, expenses and taxation of the mirror fund are not the same as the underlying fund, and as a result the performance between the funds may differ and the fund prices will not be the same.
AND mirror funds can carry extra charges!
The value of any investment and the income from it can fall as well as rise as a result of market and currency fluctuations and you may not get back the amount originally invested.
So, I was really sold on the Futura. Then I googled for a review of it...
After a bit of sniffing I came to a site by Andrew Hallam (hadn't heard of him before - but now I am really impressed by his work...anyway, digress)...
He had a full article about why you shouldn't buy an investment wrapped with an insurance policy...and it turns out this is EXACTLY what the Futura is.
So...I walked away - and I bought an insurance policy that's just that, plain insurance.
In the words of Mr. Hallam "Buy insurance for insurance purposes. Buy investments for investment purposes. Never mix the two, or you end up with duds."