Last week, we received an announcement that with effect from 1st July 2021, the policy illustrated investment rate (PIRR) will be lowered from 4.7% to 4.25% and 3.25% to 3.00% respectively.

What is Your Policy’s Illustrated Investment Rate (PIRR)?

Some of your insurance policies accumulate cash values. You contribute additional capital, on top of insurance charges to it. The insurance companies will take your capital and invest in a participating fund. You can see this partipating fund as a pool of stocks, bonds, cash, property investments managed by a group of managers, much like your unit trust, hedge fund with a certain mandate. The performance of this participating fund’s return determines how much cash value is accumulated. Typically, endowment plans, limited whole life plans are the kind of policies whose cash value is tied to the performance of the participating fund. Term plans do not accumulate values so they are not impacted by this illustrated investment rate in any way....