The policy, Secure SET50, is a five-year plan through which policy-holders pay a one-off premium of between Bt150,000 and Bt10 million that is returned to them once the policy matures along with a return based on the SET 50 Index's performance. It is being sold through UOB Bank and AIA agents and is available to people aged under 65 years.

Given the complex nature of this product, AIA said it would target UOB Bank customers and people with investment knowledge. The insurer says it has set a sales target and will cease offering the policy once that undisclosed target is met or at the end of this month, whichever comes first.

Thomas James White, AIA Thailand's executive vice-president and general manager, described the policy as a safe alternative to investing directly in stocks.

"Usually, customers participate 100 per cent with all losses and gains, with no guarantee of return of capital. But customers who purchase Secure SET50 are buying a life insurance contract backed by AIA.

"AIA guarantees the return of the single premium paid at the end of five years plus a bonus based on a guaranteed calculation of the increase in the SET50 index," said White.

Policyholder's returns will be calculated quarterly. Any gain in the SET 50 Index during each quarter, in comparison to the index at the policy start date, will be locked-in. Any quarterly losses will be cancelled, with the return for that quarter recorded as zero.

The maturity bonus that is paid along with the initial premium at the end of the five-year policy will be calculated from the average of 20 quarterly figures multiplied by a participation rate of between 60 to 80 per cent. The exact participation rate will be set on the date the policy is issued.

White said AIA has reviewed the performance of the SET 50 Index since its inception in 1995 and found that the Secure SET50 would have provided a maturity bonus of up to 65.8 per cent during that time.

If the policy is cancelled in less than five years, AIA will pay a guaranteed surrender rate that is staggered according to how long the policy was held but is always less than the initial premium paid.

The death payout of the policy is 101 per cent of the premium.

AIA, the country's biggest life insurer, earlier planned to set up an asset-management firm and has previously launched the investment-linked products Unit Link and Universal Life product.

Piyarat Setthasiriphaiboon

The Nation