Thinking of retiring? Learn how to plan for the future with Qualified Deferred Annuity Policies (QDAPs)!

2024-06-05

5 Mins Read

What's a Qualified Deferred Annuity Policy (QDAP) | Why opt for a QDAP
Tips for buying a QDAP | AXA IncomeBliss Deferred Annuity Plan

Thinking about retirement often brings dreams of freedom from the daily grind, where you can pursue passions and hobbies instead of being chained to a desk. But to make that dream a reality, early financial planning is essential.

In recent years, Qualified Deferred Annuity Policies (QDAPs) have garnered significant attention in the market. As a popular saving and life product, it is important to first comprehend its features and advantages. This article will address frequently asked questions about QDAPs and clarify common concerns, enabling you to gain a deeper understanding of this product before making a purchase decision.

What's a Qualified Deferred Annuity Policy (QDAP)?

A Qualified Deferred Annuity Policy (QDAP) lays the groundwork for a financially stable future. During your working years, you can deposit funds into this ‘piggy bank,’ allowing them to accumulate over time. Typically, you can start receiving monthly annuity payments as early as age 50³.

Aside from ensuring a steady income after retirement, you can also apply for tax deductions⁵ with qualifying annuity premiums, to cover current living expenses and other costs.

IncomeBliss Deferred Annuity Plan

Earn more with monthly annuity. Save more on taxes annually. Enjoy up to HKD60,000 tax deduction limit⁵ upon successful application for 'IncomeBliss'.

With so many financial tools available on the market, why opt for a Qualified Deferred Annuity Policy (QDAP)?

Sure, there's a plethora of financial tools out there, but QDAPs Qualified Deferred Annuity Policy (QDAP) have its own distinct perks.

Firstly, one of the key benefits of QDAPs is the assurance of a reliable retirement income. After retiring, without a fixed salary, one's financial stability may waver. But with a QDAP, you can ensure steady financial support after retirement, thereby maintaining a comfortable standard of living.

Secondly, QDAPs encourage the public to make comprehensive and long-term financial planning in advance. QDAPs step up to the plate, aiding folks in preparing an uncertain retirement ahead and safeguarding their future and that of their families.

【IncomeBliss Deferred Annuity Plan】Enjoy up to HKD60,000 tax deduction limit⁵ upon successful application for 'IncomeBliss'.

Furthermore, QDAPs come with embedded benefits and tax deduction. By successfully applying for a QDAP, you could enjoy up to HKD60,000 tax deductions limit⁵. Moreover, AXA's IncomeBliss Deferred Annuity Plan offers dementia advance benefit and life protection, among other benefits. Even in the unfortunate event of the annuitant's demise, the protection won't fall short of the entire premium paid, giving both the annuitant and their family members a peace of mind.

QDAPs also provide enhanced flexibility and freedom, enabling you to tailor your retirement plan according to your individual circumstances. Take AXA's IncomeBliss Deferred Annuity Plan, for instance. Depending on your financial position, you can opt for a premium payment term of 5 or 10 years, and an annuity period of 10 or 20 years, aligning with your retirement timeline. As for policy currency options, you have the flexibility to choose between Hong Kong dollars or US dollars, bolstering flexibility for your future. Plus, you can choose to receive the monthly annuity payments in, or to leave the monthly annuity payment with us to accumulate for interests¹. If you wish to alter the annuity payment option, you can simply submit a written notice at any time, and no additional fees will be charged².

How much saving should you get ready for your retirement?

When considering a QDAP, you can start by envisioning the retirement lifestyle you desire, encompassing travel, interests, hobbies, and overall quality of life. Then, estimate the monthly income required to achieve these aspirations, factoring in inflation and other income sources such as superannuation, passive income, and investment returns. This will help you to determine the additional income needed from your QDAP.

Regardless of the product you consider at any time, it is crucial to assess its potential impact on your current quality of life and financial plans. Make a well-informed decision after careful evaluation.

How to select a QDAP?

1. Define your objectives and requirements: Firstly, reflect on your current life stage and the retirement lifestyle you want in the future. If you've been in the workforce for few years, possess a stable job, and have tax obligations, it may be time to explore a QDAP. Leverage your existing advantages, such as a steady income and a longer time horizon for retirement, to choose a QDAP that suits yourself, to prepare for retirement effectively.

2. Compare various plans: There are various types of QDAPs on the market with its own features. Conduct a thorough comparison, considering factors like guaranteed and non-guaranteed returns, contribution periods, annuity periods, death benefits, and other policy options.

3. Seek professional guidance: If you lack knowledge about QDAPs or feel uncertain about choosing one, consulting a professional financial consultant is advisable. They can provide valuable insights to help you make an informed decision.

【IncomeBliss Deferred Annuity Plan】Enjoy up to HKD60,000 tax deduction limit⁵ upon successful application for 'IncomeBliss'.

Product Highlights of the IncomeBliss Deferred Annuity Plan (‘IncomeBliss’)

Create long-term income: Secure stable monthly income starting from the age of 50³ for an annuity period of up to 20 years⁴.
Family protection: Ensure your family'’s financial security with life protection and dementia advance benefit, offering peace of mind for the future.
Tax deduction: Enjoy up to HKD60,000 tax deductions limit⁵, making it easier to manage your finances.
Yearly discounts: Offer 5% premium discount every policy year during the premium payment term, a total premium discount up to 50% of the first-year annual premium⁶.
Currency options: Choose between US dollar and Hong Kong dollar policy currencies, providing flexibility to suit your preferences.

Now, you've got a clearer grasp of QDAPs. Whether you aim to be thoroughly prepared or seek a richer and more satisfying retirement, a QDAP is your ticket. It's akin to fortifying your future with a sturdy safety net, transforming retirement apprehension into eager anticipation.

¹ The monthly annuity payment will be left with us to accumulate for interest. The interest rate is not guaranteed and shall be determined by the Company from time to time. Withdrawal from the balance of monthly annuity payment accumulated is free of charge.

² You may request to change your annuity payment option by sending written notice (in such form and manner satisfactory to us) to the Company. The change of annuity payment option is free of charge. Any approved change to the annuity payment option will take effect from the next policy monthiversary.

³Only applicable to policies with issue age of 18 - 40.

⁴ When the customer reached the annuity start age, customer can receive monthly annuity payments for a duration of up to 20 years. Please refer to the relevant product brochure for details.

⁵ HKD60,000 is the maximum tax deductions per taxpayer per year for qualifying annuity premiums and MPF tax deductible voluntary contributions. For details on tax deductions, please visit the website of Inland Revenue Department (IRD) of HKSAR or contact IRD for tax related enquiries.

⁶ Applicable to policy with a premium payment term of 10 years and subject to terms and conditions. Please refer to product brochure and promotional leaflet for more details.

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