5x Investment Return Strategy - Dividend
This strategy focuses on dividend funds, showcasing how dividends can reduce annual investments over time, eventually reaching a breakeven point where dividends cover premiums and generate profits.
It encourages long-term planning to optimize ILP benefits, leveraging higher bonuses and maximizing returns within an extended time horizon.
The table below highlights current ILP charges in the market, providing information for you to input into your InvestView table.
This allows you to demonstrate that even with charges factored in, the plan can still illustrate a potentially strong return.
Current Market ILPs 📊
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[Charges & Fees] 🔴
‣ Premium Charge - 5% of each Top-Up
‣ Supplementary Charge - 3.9% p.a for first 10 years
‣ Holiday / Withdrawal / Surrender - Applicable till 11-21 years onwards depending on IIP
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[Charges & Fees] 🔴
‣ Policy Fee - 1.5% to 2.5% during Premium Terms, subsequently at 0.7% for whole policy term
‣ Holiday / Withdrawal / Surrender - Applicable during premium term
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[Charges & Fees] 🔴
‣ Account Maintenance Fee - Ranging from 2.15% to 2.3% p.a during MIP, 1.0% p.a subsequently
‣ Premium Charge - 3% for Top Ups
‣ Holiday / Withdrawal / Surrender - Applicable during MIP period
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[Charges & Fees] 🔴
‣ Administrative Charge - 2.5% p.a during MIP Period, dropping to 0.7% to 1% p.a subsequently depending on MIP
‣ Policy Fee - $5/Month
‣ Holiday / Withdrawal / Surrender - Applicable during MIP period
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[Charges & Fees] 🔴
‣ Administration Charge - 2.6% to 3.3% ranging from 8 to 12 years
‣ Premium Charge - 3% for Top Ups
‣ Holiday / Withdrawal / Surrender - Applicable, same model as Adminstration Charge
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[Charges & Fees] 🔴
‣ Supplementary Charge - 1.9% p.a for first 10 years
‣ Administrative Charge - 0.6% p.a for whole policy term
‣ Holiday / Withdrawal / Surrender - Applicable during MIP Period (Varies for Fixed & Flexible Choice)
Example
Using the Allianz Income and Growth Fund as an example, which offers an approximate annual dividend rate of 6.5% and a 6.5% performance since inception (Using Dec 2024 Fund Factsheet), we moderate expectations to a 5% dividend rate and 4% annual fund growth (after factoring in management fees).
Allianz Income and Growth Fund Factsheet
With a 2.5% policy charge over a 25-year term, we illustrate the benefits of this planning approach with a $500/m premium below. (Do click onto Withdraw Dividend button)
1) Reducing Premiums Model & Achieving Breakeven Point
Annual dividends reduce investment outlay; by year 7 (age 36), $2.3k in dividends offsets a $6k investment, requiring only a net $3.7k contribution.
With the stated dividend rate and fund performance, factoring in charges, breakeven could be achieved by year 17. From then, dividends fully cover premiums, generating excess profit as the account grows.
2) Achieve 5x Growth Over 20/25 Years with Reduced Outlay
Over 25 years, total premiums paid amount to $150,000 (25 x $6,000). With total dividends of $112,000 paid out by then, the net investment premium is reduced to $38,000.
Assuming a forecasted 4% performance, the principal grows to an estimated $182,000, representing nearly a 5x return over 25 years.
Script 🗒
Advisor - Ok xxxx, for the past 2 years, our company has been onboarding dividend funds to our investment plan, and due to the performance of the dividend fund and structure of the policy, there is a retirement hack in place to allow user to achieve very low-cost retirement to even free retirement, you want to learn more about it?
Advisor - Under this hack, your yearly investment amount will keep reducing because of the dividends coming out (Provide an example - Example xxx, you were to invest $6k a year, you will not be expected to invest this amount year by year but instead it will reduce), until it breaks even on est xxth year, and subsequently you will get to profit a lump sum of money on the xxth year with very little total investment made on it,
Advisor - For example, now you’re xx years old, assuming a xx investment a year, and welcome bonus of xx% and with dividend return at x% and fund performance at x% along with the policy charge, here is the illustration for you to understand better,
Advisor - As you can see on the chart, year by year, your yearly investment amount will reduce, and breakeven on the xxth year, and by the end of the xx years, your total net investment amount will only be xxx amount with principal account of est $xxx ready to draw out,
Advisor - Your net investment of $xxx vs principal account represent almost a 100x return
Objection Handling ❌
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Totally agree, the downside to this is the discipline to commit to it with it being hands free only from the x-th year as you can see from the chart,
And also the patience to wait for it to mature on the 25th year though you can withdraw prior to it but any withdrawals are subject to potential charges prior maturity,
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This fund has actually been in the market since xxxx and is created by reputable fund house with almost $50 billions in holding, consistently perform about x% of dividend and x% of fund performance,
The computation above in the chart I shown to you actually is discounted from their real performance as I try to manage the expectation too,
With this being a mid-long term planning, it’s given sufficient time horizon to ride out any waves and come out stronger with this policy allowing you to top up upon any down market to seize the opportunity also
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Absolutely! You can choose to invest on your own. However, this fund is exclusive to our company and is typically accessible only to accredited investors. One of the few ways to gain access is through an ILP.
Additionally, the welcome and loyalty bonuses, along with other fringe benefits, are unique perks that wouldn’t be available on your preferred platform.
Most importantly, our structured approach helps instill the discipline needed for effective Dollar-Cost Averaging (DCA), ensuring long-term consistency which is required to make this work.
