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Zurich Wealth Accumulation Plan |Review |Financial Planning in Dubai

The Wealth Accumulation Plan is a Lump Sum Investment Solution from Zurich International Life.

You can start this plan with a minimum investment of USD 30,000 and add additional premiums (Min USD 2,500) as and when you prefer.

With this plan, you can build a portfolio of international investment funds helping you beat inflation and grow your wealth.

Zurich Wealth Accumulation Plan - Asset Allocation.jpgUnlike Zurich's other unit-linked plans, the Wealth Accumulation Plan provides access to both direct and managed funds offering diversification across different asset classes like equities, bonds, cash, commodities and real estate.

Click here to download Zurich's guide to direct, managed and money market funds you can use to invest in this plan

Insurance Wrapper

The Wealth Accumulation Plan is an investment vehicle, within an insurance wrapper. Such an arrangement is ideal for financial needs like wealth protection, tax planning and transfer of wealth.

Zurich Wealth Accumulation Plan - Insurance Wrapper.jpg

A will or a trust is an efficient estate planning mechanism, but they do not help in wealth creation. The Wealth Accumulation Plan can not only help you accumulate and grow wealth, but it can also be a useful estate planning medium.

Enhanced Life Cover

Like all investment plans on Insurance platform, this plan also has a primary life cover equal to 101% of the fund value. In the first five years of the plan, an investor of age less than 60 is covered for an amount higher of;

  • 101% of the fund value or
  • The actual amount invested less any partial withdrawals (if made).

Since the life cover amount is not very significant, this feature is not very attractive.

Isle of Man Advantage

The Isle Of Man holds exceptional political and economic stability, thanks to its history of over 1000 years of continuous parliamentary government. It is world renowned financial centre with stringent legislation governing the companies incorporated in it. 

Zurich Wealth Accumulation Plan - Isle of Man Advantage.jpg

Zurich International Life Limited is fully authorised under the Isle of Man Insurance Act 2008.

It is regulated by the Isle of Man Financial Services Authority which protects the interest of the investors by ensuring that registered insurance companies are professionally managed and hold adequate reserves to meet their liabilities.

For life assurance companies authorised in the Isle of Man, the Isle of Man’s Life Assurance (Compensation of Policyholders) Regulations 1991, ensure that in the event of a life assurance company being unable to meet its liabilities to its policy owners, up to 90% of the liability to the protected policy owner will be met.

Policy Charges

 

Establishment ChargeAn establishment charge applies to each premium received and is deducted for up to five years from the date it is paid. The charge, based on the premium amount, will be deducted at a rate of:

Year 1

Year 2

Year 3

Year 4

Year 5

2%

2%

1%

1%

1%

This equates to an approximate monthly charge of:

0.17%

0.17%

0.08%

0.08%

0.08%

 

 

Policy Management ChargeA yearly management charge applies to the whole life of the policy and is applied to the policy value in each month. The percentage charge taken depends on the policy value at the time the charge is taken.

This charge is deducted at the beginning of every month by cancelling units from your plan.

Currency Yearly Charge
1.00% 0.80% 0.50%
 

USD

Up to & including 29,999 

Between 30,000 & 224,999  Over 225,000
 

AED/QAR

 Up to & including 110,099  Between 110,100 & 825,749  Over 825,750
GBP   Up to & including 19,499  Between 19,500 & 146,249  

Over 146,250

EUR  Up to & including 23,999 

Between 24,000 & 179,999 

 Over 180,000
BHD  Up to & including 11,099  Between 11,100 & 83,249  Over 83,250 
Approximate monthly charge equivalents   0.083% 0.066%   0.0416%
 
This charge is deducted at the beginning of every month by cancelling units from your plan.
 
Click here to download the Key Features Document for a detailed list of charges, scope, benefits and limitations of the plan
 
The policy terms and conditions can be downloaded by clicking here.
 

Yearly policy charge

A yearly policy charge of USD 165 or equivalent in other currencies applies for the whole life of the policy, although once your total premiums reach USD60,000, AED/ QAR220,000, GBP40,000, EUR48,000, or BHD22,000, Zurich will stop charging under this head. 

Like others, this charge is also deducted at the beginning of every month by cancelling units from your plan.

Benefits Summary

  • 300 + direct funds including the Zurich multi-asset and risk-rated funds
  • 24/7 online access to your plan details
  • Free switching and no initial charges, but Underlying funds annual management charges do apply
  • Insurance Wrapper - ideal for financial needs like wealth protection, tax planning and transfer of wealth.
  • Isle of Man Advantage - Investment is secure and safe
  • No charges on Regular & Partial withdrawal 
  • Surrender charges only for the first 5 years

Hurdles 

  • Surrender charge can be as high as 8.25% in the first year and it slides down to 1.00% in the year 5 
  • Not suitable for short-term financial needs/goals

Review

Many might argue that the ongoing charges and the surrender charges on this plan are relatively high, but given the above-discussed advantages, these charges are justified.

While there are many trading platforms like Swissquote, SaxoBank, Interactive Brokers and Internaxx where the transaction costs seem lower, but when you actually calculate the minimum transaction cost and other ancillary costs, the overall charges can be higher than the Wealth Accumulation Plan.

Also, such trading platforms are more suitable for professional DIY Investors. For investors who are not savvy and don't want to be glued to their monitors tracking the market movements, the Wealth Accumulation Plan is ideal.

If you are looking to invest less than $60,000 you may also consider the Generali Choice, who have a different charging structure and do not have the yearly policy management charge. 

If your initial investment is more than $60,000 the Wealth Accumulation Plan may be suitable for you, subject to other aspects of the plan and your personal situation.

Independent & Professional Advice

Damodhar Mata

As Qualified and independent financial adviser a have more than ten years experience in helping UAE residents make educated decisions with their money. I work with many insurance and investment providers; hence I can provide unbiased & expert advice. 

Contact me to arrange a free consultation to help you choose the best investment solutions based on your financial goals/needs, risk appetite and investment horizon

 

 

 

 

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Money Mata - aka - Damodhar Mata

Author, Blogger & Independent Financial Advisor. My goal is to give you actionable tools for creating passive income and building wealth. More than 10,000 expats have already used my ideas to jumpstart their journey towards financial independence. Connect with me to start yours...

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