In a statement, the Life insurance Association of Singapore said that the new investment returns used to illustrate products will be 4.75% p.a. and 3.25% p.a., down from 5.25% p.a. and 3.75% p.a.
This is a reduction from the 5.25% p.a. and 3.75% p.a. in use at present.
Participating, or "par" policies are those that benefit from a share in the allocations of a so-called participating (“par”) fund, which in turn is comprised of the premiums numerous policyholders pay for their ‘participating’ policies.
The two rates used for illustrative purposes are used only for illustrating possible investment performance, "and do not represent upper and lower limits of the investment performance of the par fund", the LIA said.
In addition, it added, "actual investment returns in the future may vary from the illustrated rates, depending on the economic conditions, asset class returns and asset allocation of the par fund".
