BNP Paribas Cardif Life Insurance, the Korean subsidiary of BNP Paribas Cardif, the insurance arm of BNP Paribas, is pleased to announce that ‘(NP) ELS Master VL’ and ‘(NP) ELS Pro VL’, introduced to the market last year as industry’s first ever VLs (Variable Life Insurance) to invest in ELS (Equity Linked Securities), recorded sales exceeding KRW 100 billion only a year since their launches.
In April 2013, BNP Paribas Cardif Life Insurance launched ‘(NP) ELS Master VL’, the first product of the industry to invest in ELS. The product posted soaring sales of KRW 10 billion only one month after its launch, taking a favorable turn in sales. Backed by such impressive success, BNP Paribas Cardif Life Insurance introduced ‘(NP) ELS Pro VL’ in October last year. Both products combine medium risk and medium return which enjoy popularity from investors in a low interest era, and are on a rapid rise by offering tax exemption to policyholders when the investment fits the requirements of relevant tax laws.
In particular, ‘(NP) ELS Master VL’ saw most of its ELS from the ELS Master Equity Index Linked Fund record an average annual interest rate of 8% at early redemption. Following the redemption, the product is invested in another ELS which targets to post 7-8% of annual rate of return and continues to post positive performances.
Byung Uk Lee, Chief Marketing Officer (CMO) of BNP Paribas Cardif Life Insurance, said: “VL products investing in ELS allow to access to ELS more easily and more safely through insurance. They seek a relatively higher rate of return than the average bank deposit rates and offer tax exemption in a long term to investors. Product subscribers have shared their high satisfaction. BNP Paribas Cardif Life Insurance has launched innovative products that allow us to meet the customers’ needs and perfectly fit the market conditions. For example, we introduced a variable life insurance product in 2011 which removes the early cancellation cost and increases CSV (cash surrender value) when policyholders surrender the policy at an early stage. This product was the first of its kind for the industry. Last year, we launched ‘Creditor Protection Insurance’ which pays off policyholder’s loan in the event of sudden accidents. We remain committed to providing customer-centric products and services in a timely manner so that ultimately, profit returned to the customers is maximized.”
Beyond quarterly asset management reports, every month, BNP Paribas Cardif Life Insurance makes a public announcement on its home page about how ELS funds are invested for the policyholders of ‘(NP) ELS Master VL’ and ‘(NP) ELS Pro VL’. In addition, when policyholders sign up for the product, BNP Paribas Cardif Life Insurance provides a product description with the main features of the fund. Subscription is available at the 4,000 branches of 12 partners of BNP Paribas Cardif Life Insurance.
In 2013, BNP Paribas Cardif Life Insurance expanded its bancassurance channel, doubling its partnerships compared to 2012. Last month, ‘(NP) ELS Master VL’ and ‘(NP) ELS Pro VL’ were nominated as candidates for the “Best Financial Product of 2013” by 100 representative Private Bankers from the banking, securities and insurance sectors.
|(NP) ELS Master VL||KB Kookmin Bank, Hana Bank, Busan Bank, Daegu Bank, KDB Daewoo Securities, Hana Daetoo Securities, Hanwha Investment & Securities, Shinhan Investment., HMC Investment Securities|
|(NP) ELS Pro VL||Shinhan Bank, Citibank Korea, Standard Chartered Bank Korea|
[Appendix: Product Description]
VLs investing in ELS: One-time subscription allows long-term investment in ELS and tax exemption
‘(NP) ELS Master VL’ is a product that makes diversified investment by investing in several ELS through the ELS Master Equity Index Linked Fund. The product enhanced the stability in the investment by transferring returns to bonds or bond-type funds.
Besides, ‘(NP) ELS Pro VL’ selectively invests in ELS which seek stability through ELS Pro Stock Index- Linked Funds. Upon redemption, it will identify and invest in additional ELS with similar features as the ones initially invested, helping customers to have a better understanding of the product’s investment method.
Both products are automatically reinvested by asset management companies in more ELS within the same fund upon early redemption or when they reach maturity, so there is no need for policyholders to worry about how to manage the investment. The non-taxation benefit on earnings from the insurance is available if the investment fits the requirements of relevant tax laws, relieving tax burdens on investors under the newly adopted global taxation on financial income which lowered the amount of financial income subject to taxation. Thus, investors can expect to see their profits up.
The entry age for both products range from 15 to 70, and customers can sign up via single payment. If the premium exceeds KRW 30 million, a 0.7%~1% discount will be applied to the exceeding amount. Policyholders can withdraw the investment without cancelling the policies and utilize the investment when needed or can even convert the product into annuity in preparation for retirement. They can also diversify their investments by transferring the fund to stocks, bonds, MMF funds, etc., based on the market conditions.