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REVIEW SUMMARY

Zurich International Futura

Zurich Middle East is part of Zurich Insurance Group, one of the world’s largest and most experienced insurers, with over 140 years' experience in 170 countries. They employ 55,000 professionals and insure AED110bn in life cover.

In August 2019, they were selected as the scheme administrator of DEWS (DIFC Employee Workplace Savings), a defined contribution plan designed to reform the end-of-service benefit approach and support DIFC’s vision to drive the future of finance in the region. 

Zurich Middle East is regulated by UAE Insurance Authority, Central Bank of Bahrain and Qatar Financial Centre Regulatory Authority.

Zurich Futura:

Futura is a flexible whole of life, unit-linked protection policy designed to accommodate changes to benefits as the circumstances of your life change.

Overview
FAQ
Customer Reviews
Expert Verdict

Futura is a protection policy; it is not an investment policy. However, your choice of funds plays an important part in maintaining the level of your benefits. You should always remember that the primary purpose of the funds selected by you is to ensure that your benefits are maintained for as long as you need them.

Futura has a wide range of additional benefits that can protect you, your family and/or your business against the financial impact of severe illness, accident or death at any stage of your life.

The right financial planner will help you to decide if this policy is suitable for you, the levels and types of cover that are appropriate for your circumstances and the funds in which to invest.

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.

Product details:

1. Policy ownership:

Individuals, trustees and companies can own this policy.

2. Life insured: Futura can be written on the following bases:

  •  single life;
  • joint life first death;
  • joint life both death; or
  •  joint life last death.

3. Age Limit:

Policy owner - Minimum age of 18 when the policy starts.

Life insured - Minimum age of 18 when the policy starts. Maximum age of 74 when the policy starts (some additional benefits have different age restrictions.

4. The policy currencies: Include US dollars, Euros, Pounds sterling, Hong Kong dollars, Swiss francs and Japanese yen.

5. Premium payment frequency: You can pay regular premiums monthly, quarterly, half-yearly or yearly.

Single premiums may be paid at any time.

Aims of the policy:

  • Pay a cash sum on the death of the life or lives insured.
  • Provide a range of comprehensive additional benefits to protect against the financial impact of serious accident and illness.
  • Allow you to change the levels of protection and benefit options available.

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 for how long a cover is required.
  • Encashing when no longer required.

However, this flexibility is highly debatable.

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. 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.

NOTE:

  • 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.
  • 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 months, (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 Pros

> Wide range of rider options
> Capable of adapting to your situation
> Portable - can be taken with you if you are leaving the UAE

The Cons

> Expensive
> Inflexible
> Commonly mis-used
What are the main risk factors with the Zurich Futura?

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 professional financial planner.

  • 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.

Who can apply for a Zurich Futura policy?

• Individuals, trusts or companies.
• You can own the policy yourself or jointly with someone else.
• Anyone aged 18 or over.

How are Futura premiums invested?

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 very expensive!

Is there a loyalty bonus with Futura?

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.

What benefits does the Futura offer?

For single life, joint life first death and joint life both death policies the benefit options are:

1. Compulsory benefits:

Life cover pays a lump sum benefit on the death of the relevant life insured. If you choose to include any additional benefits to your Futura policy, the maximum amount of cover for these benefits will be limited to the lower of the life cover sum insured on your policy or the maximum cover amount allowed for that benefit.


Terminal illness benefit pays a lump sum benefit of the lower of the life cover sum insured or USD1 million (or currency equivalent determined by Zurich International Life (Zurich)) on the diagnosis of a terminal illness of the relevant life insured. Terminal illness benefit claims are paid as an advance of the life cover sum insured, so in the event of a claim the life cover sum insured will be reduced or extinguished altogether.

Aeroplane cover pays a lump sum in addition to the life cover sum insured (up to a maximum of USD1 million in addition to the life cover sum insured), in the event that the life insured dies as a fare paying passenger on a commercial airline. Life cover, terminal illness benefit and aeroplane cover are compulsory benefits with Futura – all the other additional benefits are optional. For life cover, terminal illness benefit and aeroplane cover the maximum age at entry is 74.

2. Additional benefits:

Waiver of premium benefit ensures that in the event that a life insured is totally incapacitated by illness or accident the policy premiums are paid by us. This means that the policy can continue as originally planned.
The maximum age at entry for this benefit is 59 and the benefit stops at age 70.

Critical illness benefit provides a lump sum amount if the life insured is diagnosed with a critical illness, or undergoes a medical procedure covered under the policy. The maximum age at entry for this benefit is 59.
Critical illness claims are paid as an advance of the life cover sum insured, so in the event of a claim the life cover sum insured will be reduced or extinguished altogether.

Children’s critical illness benefit is included within the critical illness benefit definitions. This will pay a lump sum of the lower of USD10,000 or 10% of the Critical illness Benefit Sum Insured in the event of the Life Insured’s child being diagnosed with a critical illness, or undergoing a medical procedure covered under this definition. A maximum of three children are covered by this benefit. The payment of a valid children’s critical illness benefit claims does not reduce the Critical illness Benefit Sum Insured or the Policy Value.

Permanent and total disability benefit (PTD) pays a lump sum amount in the event that the life insured is diagnosed as permanently and totally disabled. The maximum age at entry for this benefit is 59 and the benefit stops at age 70. A valid claim for PTD will not reduce the life cover sum insured.

Family income benefit pays a series of regular payments for a selected period of time in the event of the death of the relevant life insured. The maximum age at entry for this benefit is 74.

Accidental death benefit is paid in addition to the life cover sum insured where the life insured dies as a result of an accident. The maximum age at entry for this benefit is 59 and the benefit stops at age 70.

Dismemberment benefit pays a lump sum if the life insured suffers the loss of sight or limb as the result of an accident. The maximum age at entry for this benefit is 59 and the benefit stops at age 70.

Hospitalisation benefit is payable if the life insured is hospitalised for more than three consecutive days. The maximum age at entry for this benefit is 59 and the benefit stops at age 70.

For joint life last death plans, the benefit options are:

1. Compulsory benefits:

Life cover pays a lump sum benefit on the death of the last of the lives insured to die.

Aeroplane cover pays a lump sum in addition to the life cover sum insured (up to a maximum of USD1 million in addition to the life cover sum insured), in the event that the last of the lives insured to die dies as a fare paying passenger on a commercial airline.

Life cover and aeroplane cover are compulsory benefits with Futura – any other benefits are optional. For life cover and aeroplane cover the maximum age at entry is 74.

2. Additional benefits:

Waiver of premium benefit ensures that in the event that a life or lives insured is totally incapacitated by illness or accident the policy premiums are paid by them. This means that the policy can continue as originally planned. The maximum age at entry for this benefit is 59 and the benefit
stops at age 70.

NOTE:

  • 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.
How long can the Zurich Futura policy last?

The policy is a whole of life plan which will come to an end:
• when the relevant life insured dies;
• when the policy is fully encashed; or
• if the policy lapses.

What's the range of funds I can invest in with my Futura?

With Futura, you can choose from a wide range of fund options as follows:

1. Low risk funds:

These funds form the foundation of Zurich's investment range, and invest in cash, money markets and international fixed-interest securities.

2. Managed funds:

This 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.

3. Mirror funds:

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.

What are the fees and charges with Futura from Zurich International?

Regular premium initial charge:

• Regular premiums are allocated at the following rates:

This means that for at least the first two years of your policy, all your premiums are used to pay the set up charges for your policy.

For years three to nine Zurich takes a 7% initial charge from your regular premiums and for year ten onwards, they take a 2% initial charge from your regular premiums.

• Single premiums are allocated at 84%. This means that for all single premiums Zurich takes an initial charge of 16%.

Benefit charges:

The cost of providing benefits is determined by the age, gender, smoker status and other personal details of the life or lives insured, together with the levels of cover required.

Benefit charges will increase yearly.

Benefit charges are deducted monthly in advance by cancelling units in your choice of funds.

Policy administration charge:

A policy administration charge is deducted from your policy each month. The current charge is detailed below:

Zurich International Futura policy administration charges

Monthly policy administration charge:

Zurich International Futura's monthly policy administration charge

Annual fund management charge:

The annual fund management charge (AMC), is deducted from each fund by the fund manager, prior to calculating the unit price.

Additional charges may be levied by fund managers to cover other fees and costs incurred in the running of the funds.

Zurich’s mirror fund management charge:

The mirror fund charge applies to all mirror funds and the current charge is 0.75% a year of the mirror fund value.

It is deducted daily before calculating the mirror fund unit price.

Regular premium cessation charge:

If you stop paying regular premiums within five years, your policy will be subject to a one-off charge. The current charge is detailed in the table below:

Zurich International Futura's regular premium cessation charge

This charge is deducted by cancelling units in your choice of funds.

Credit card charge:

If you pay your regular premiums by credit card, Zurich will make a charge which is currently 1.5% on each premium amount by increasing the amount collected.

Currency switch charge:

If you switch between funds of different currencies then there is a charge which is currently 0.175% of the currency switch amount.

Can I take withdrawals from the Zurich International Futura policy?

Withdrawals are allowed from policies which have a positive policy value.

Regular premium policies have no policy value during the early years, and withdrawals are not allowed whilst the policy has no value.

Taking withdrawals may result in a reduction in the benefit amounts equal to the amount of the withdrawal.

How long can I pay premiums for?

You can choose to pay your premiums throughout the life of your policy (whole of life premiums), or you can choose to pay a higher premium for a fixed period of between 7 and 50 years (vanishing premium term).

Whichever payment options you choose, all premium payments will stop once you reach age 95. Policy reviews are carried out by us at the fifth policy anniversary and every year thereafter, or whenever there is a significant change to your policy, to ensure that your premiums are sufficient to support your cover/benefit levels for at least the next five years.

Can I nominate a beneficiary for my Zurich policy?

You can appoint a beneficiary or beneficiaries to receive the sum insured payable on the death of the relevant life or lives insured. Where there are multiple lives insured or multiple policy owners on the policy, please ensure that you understand the implications of appointing a beneficiary and the effect this will have in the event of a valid death claim.

Please consult your financial planner if you are unsure whether or not you should appoint a beneficiary or unsure of the effect of appointing a beneficiary on your policy.

Saved by Andrew Hallam!

So, I was really sold on the Futura. Then I started doing some research...

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 with his work).

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."

Expert Assessment of Zurich International Futura

This product is regularly mis-sold and often represents an unsuitable protection solution. Lower cost, more flexible and better performing options are available.

If you already hold a Zurich International Futura we recommend you speak to a professional, fee-based fiduciary.

If your Futura is worth £250,000 or more, click here to get a Second Opinion from AES and discover if you are on track to get and keep the life you want.

Zurich International Futura Key Features

Zurich International Futura Technical Factsheet

Zurich International Futura - International Lifetime Protection

Zurich International Futura - Customer Product Disclosure

Zurich International Futura - Guide to Individual Protection

Zurich International Futura - Key Features for Rider Benefits

Zurich International Futura - Protecting Your Mortgage

Zurich International Futura - Critical Illness Cover

Zurich Futura Whole Life Terms And Conditions

Zurich Futura Collection Guide

Zurich Futura Post Maturity Letter

Zurich Futura - A Guide to Your Payment Options

Zurich Futura - Online Portfolio Management Guide

Zurich Futura - Latest Customer Benefits Paid Report

Zurich Futura - Customer Guide to Complaints Procedure

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