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| VALUE ADJUSTMENT OPTIONS
 | | Value Adjustment Options are suitable for those who want to make sure the matured values and other benefits of their insurance policy do not lose over time.
By attaching Value Adjustment Option to your basic policy, you can increase your sum assured annually in response to inflation owing to gold price, US dollar exchange rate increase. |
1. What are Value Adjustment Options (VAO)?
- These options are to increase your sum assured on a compounding basis at every Policy year. There are 5 different rates that you can choose to adjust your sum assured per annum. The annual increase is applied from policy year 2, throughout the paying period of the base plan.
- You will have to pay additional premium on every policy year in order to make VAO valid. Under 5 options of VAO, all annual additional premiums as well as your benefits including the matured values are paid in Vietnam dong.
- However, the annual increase of the sum assured will not exceed a maximum limit set by the company. This cap may vary from product to product, from time to time.
2. Why VAO are good for you?
- Help you achieve your financial goal: since the market prices vary every year, the premium you pay in the following years may not be of the same value as that of the first policy year, thus your matured values and other benefits after several years may be affected. By adjusting your sum assured every year and paying annual additional premium, you can make sure that the value of your sum assured is basically maintained when the contract is due.
- Guaranteed increase: under VAO, your sum assured is guaranteed to increase without any additional underwriting requirements.
- No commitment and no obligation: You can stop VAO any time for any reason, and decline any subsequent increase in sum assured. You will not have to pay additional premium for any further increases. Any increases in the sum assured before your VAO cancellation remain unchanged, or are cancelled at your request, but you will not be able to apply VAO again once you cancel it.
3. There are 5 options under VAO: Fixed increase of 5% or 10% every year, annual increase rate of USD exchange rate or gold price, or CCI (Currency Composite Index)
- Option 1 & 2: Fixed increase of 5% or 10% for sum assured every year
Example: A customer buys a 10-year policy with the sum assured (SA) of 100 million dongs. He chooses 5% increase for his SA. From the 2nd year onwards, SA will increase 5% annually.
- Option 3 & 4: Sum assured increases in line with USD/VND exchange rate or gold price increase
Your sum assured will increase annually in line with USD or gold price rise, but the actual increase is capped at 10% and not less than 1%.
Percentage increase of sum assured is calculated as follows:
| % increase of USD exchange rate or gold price vs year 1 x Original SA- Total increases of Sum assured of previous years. |
- Option 5: sum assured increases according to CCI (Currency Composite Index)
CCI is calculated as the maximum of either USD/VND exchange rate increase or CPI and the sum assured will increase by the minimum of either CCI or 10%. However, the annual sum assured increase will not be less than 1%.
4. And what else should you know about VAO?
- Consideration period: You have one year to consider if you really want VAO or not, and will only pay additional premium from the 2nd policy year.
- For products of which the premium paying term is shorter than the policy term, the VAO will terminate at the end of the premium paying term.
- VAO are not applied for other riders attached to the basic policy except Waiver of Premium & Special Waiver of Premium. Any increases in rider benefit amounts are subject to normal underwriting.
- All the above examples on gold price, USD exchange rate, CPI and CCI are for illustration purposes only. The latest real rates quoted by official sources are used: 9999 SJC gold price is quoted from Gold and Jewelry Saigon Company (the average between bid - ask price), USD exchange rate is from the State Bank of Vietnam (interbanks rate) and CPI is sourced from the Department of Statistics*.
As this is an advanced product with relatively sophisticated benefit features and can be attached with certain basic plans only, you are advised to seek clarification and further explanation from our professional agents.
To ensure your family members are always well protected, sign up for your preferred VAO now. Please feel free to contact your Manulife professional agents or call our Customer Service hotline at (08) 5416 0708 (HCM City) or (04) 3936 2555 (Hanoi).
* Note: In order to calculate indexes for SA increases for every calendar month, the company use official gold price and USD exchange rate quoted on the last working day of the previous month and CPI quoted 2 months before. These indexes will be announced on the first working day of each month, but only effective 15 days later, for about 30 days, until the next month indexes are valid.
Examples:
-First working day of Jan 2010 is Jan. 4. On Jan. 4, the company announced Jan. 2010 indexes for SA increases based on official gold price & USD exchange rate quoted on Dec. 31, 2009, and CPI quoted in Nov. 2009. These indexes announced by the company on Jan. 4, 2010 are valid 15 days later, i.e. from Jan. 19, for about 30 days, until Feb. indexes are in effect.
-First working day of February is Feb. 1. On Feb. 1 based on prices official gold price & USD exchange rate quoted on Jan. 29 and CPI quoted in Dec 2009, the company announced indexes for SA increases for February, valid from Feb 16 onwards, for about 30 days, until Mar indexes are in effect.
-Contracts that have anniversary falls between Jan 19 and Feb 15 will use indexes of January. February indexes will be valid for contracts between Feb. 16 and Mar. 16.
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