QDAP (Savings) Scoring Methodology

• Age 35 and 45 male
• 5 year (or nearest) payment period
• Annual contribution USD 7,800 (equivalently HKD 60,000)
• Annuity commencement: age 50 (or nearest)
• Annuity period: 10 years (or nearest)

Insurers are obligated to pay the guaranteed income as a living benefit to the policyholder. 10Life calculates the guaranteed cash flow by considering the premium paid and guaranteed income in the scenarios that the policy is terminated or surrendered at age 60.

10Life calculates the present value (PV) of income received versus premium paid discounted by the risk-free rates assuming the policy commences today. Risk-free rates of different currencies are determined by the long-term yields of the respective government bonds.

• USD: United States Treasury Bonds
• HKD: Hong Kong Exchange Fund Notes

The risk-free rates may be updated from time to time to reflect changes in the market.   
The Guaranteed Return Score is calculated by the ratio of PV of income received and PV of premium paid at age 60, compared against the benchmark. 

Some products offer a non-guaranteed income for the policyholder in the policy projection, which is subject to change by the insurer. 10Life calculates the projected cash flow by considering the premium paid and projected income in the scenario that the policy is terminated or surrendered at age 60.

10Life calculates the present value (PV) of income received versus premium paid discounted by the market rates assuming the policy commences today. Risk-free rates of different currencies are determined by the long-term yields of the respective government bonds.

• USD: United States Treasury Bonds
• HKD: Hong Kong Exchange Fund Notes

We then use the Capital Asset Pricing Model (CAPM) to derive market rates of the respective currency. The risk-free rates and market risk assumptions may be updated from time to time to reflect changes in the market.

The Projected Return Score is calculated by the ratio of PV of income received and PV of premium paid at age 60, compared against the benchmark.

Since the implementation of GL16 in early 2017, insurers are required to disclose fulfillment ratios of non-guaranteed dividends or bonuses. However, current published data available in the market mainly cover the fulfillment ratios of the first few policy years, making it insufficient to determine the ability of insurers fulfilling these long-term non-guaranteed returns. Moreover, products and market assumptions are constantly changing, making it difficult to predict future returns based on past returns. Therefore, 10Life does not take published fulfillment ratios into the calculations of the Projected Return Score.

While the intended use of QDAP (Savings) is not for early cash-out, there may be cases where an urgent unexpected use of cash is required after purchasing the product or tax reduction is not suitable anymore. 10Life calculates the Early Surrender Coverage Score based on the guaranteed benefit per premium paid in the following scenarios:

1. Issue age 35, Male
   1. Surrender at the 5th policy year
   2. Surrender at the 10th policy year
   3. Surrender at the 15th policy year
   4. Surrender at the 20th policy year   

*The Early Surrender Coverage Score is based on the average of these 4 scenarios.

1. Issue age 45, Male 
   1. Surrender at the 5th policy year  
   2. Surrender at the 10th policy year 

*The Early Surrender Coverage Score is based on the average of these 2 scenarios. 

Guaranteed benefit per premium paid is calculated by the following formula. 

 Updated on 29 July 2021.