Zurich Vista Savings Plan Review

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Zurich Vista Savings Plan Zurich Vista Savings Plan Review
Zurich International Life is part of the Zurich Insurance Group, offering life insurance, investment and protection solutions throughout the world. Operating in international markets around the globe for many years.Provides individual savings, investment and protection products and have established branches in Bahrain, Hong Kong, Qatar, Singapore, Taiwan and the United Arab Emirates. This review is focused on the Zurich Vista Savings Plan.

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Zurich Vista Savings Plan Summary

Zurich Vista Savings Plan Review

The Zurich Vista Savings Plan is good if you can guarantee that you will maintain your savings at the same level for the whole term that has been selected (maybe as long as 25 years). If you cannot guarantee this then early access will result in severe penalties.

When considering a Zurich Vista Savings Plan then ensure you fully understand the local taxation position and weigh any benefits against its lack of flexibility, access and charges which are often not explained. The General Vision Savings Plan is an expensive option compared with a pure platform custodian plan and supposed tax benefits are usually outweighed by charges and lost through penalties.

We think there are other better options.


 

For


  • Widely available and sold
  • Offers some tax protection in certain jurisdictions
  • It could be considered for a 5 years investment term where no withdrawals required
  • If kept running to original planned term then may promote savings concept

Against


  • No flexibility of full withdrawal or full access in the early years without penalty
  • Many countries do not recognise any tax concessions
  • Commission wipes out all initial investments made making this an extremely expensive option
  • Does not provide full access to lowest cost funds and passive trackers



Policy Currency:The Zurich Vista Plan can be denominated in USD, Euros, Sterling, AED, BHD and QAR. Benefits will be paid in the plan currency.
Why choose the Zurich Vista Plan: : Leading Fund Houses offer a wide choice of investment funds. Investment choice through a selection of more than 30 top performing investment options, from leading fund houses, to match a wide variety of investment profiles.

Expat Money Expert Verdict on Funds 

Zurich Vista Plan Promotion: What does Zurich write about their own Zurich Vista Plan/strong>? Zurich say “Good plans shape good decisions. That’s why good planning can help to make your dreams come true. Those dreams may include early retirement, ensuring your children or grandchildren are well educated, arranging a wedding, taking a career break or travelling the world.”
Eligibility: The Zurich Vista Plan is a regular premium, whole of life, life assurance contract issued by Zurich International. It is available to most international investors outside of main regulated territories such as the UK, the U.S.A. and Australia. Zurich also offer a range of individual unit-linked regular and single premium-based savings, retirement and investment plans and an open-architecture portfolio bond along with Group retirement and savings products, Group Life and Disability and Healthcare products.
Minimums: You can start saving with as little as USD 300 a month (this can always be increased later). 100% of each premium paid will be allocated to the purchase of units in your policy. For larger premiums, the allocation rate can increase up to 102.5%. You can pay premiums via a number of different methods including credit card. There is no additional cost if you do choose to pay by card but you will have card charges to consider.
Initial Charges: This will depend on the amount of commission taken by a third party salesman or adviser.A charge of 4% each year of the value of the initial units, deducted monthly will be deducted from the value of the initial units held within your policy. This charge will be deducted throughout the premium term or 25 years if later.

Contract charge: There is an ongoing contract charge of 0.125% of the current fund value, deducted each month in arrears. The charge is applied proportionately across both initial and accumulation units.

Policy fee: A monthly policy fee of USD 8.25 will be deducted in arrears from your policy’s accumulation units. During the initial allocation period, the deduction of the policy fee will create negative accumulation units.

Are charges explicit: By explicit, it means that it is clear to see not only the charges for taking out the plan but also the cost of funds annually, any upfront fund costs, penalties on access, etc. Yes, in the main the RL360 Quantum Savings Plan charges are clearly shown and any professional should be able to interpret them. We have had feedback from clients though that they find it extremely difficult to interpret charges such as how any early access penalties would be calculated.

Documents

Zurich Vista Plan Brochure
Zurich Vista Plan Key Features

Expat Money Expert Verdict on Charges 

Accessibility: A partial surrender on your Zurich Vista Savings Plan may be treated as a one-off withdrawal. Further details on how it is treated is available in the relevant brochure. A full encashment results in penalties being applied through surrender charges linked to the term of the policy. In effect this means that on polices with an original term of more than 15 years most, if not all, of the first 18 months-2 years premiums are lost upon surrender.

You can surrender your policy at any time, but during the premium term it will be subject to a surrender charge and you may get back less than your premiums paid. If you surrender your policy whilst your original premium is still within its initial allocation period, your policy will have no surrender value – in effect suffering a 100% surrender charge.

A policy or sub-policy surrendered after the initial allocation period, but during the premium term, will be subject to a surrender charge equal to a percentage of the initial unit value. The charge depends on the period of time remaining between the date of surrender and the end of the premium term. For example, if you select a 15 year premium term and opt to surrender the policy after 10 years, you would have 5 years remaining and the initial units within your policy would be subject to a 37.04% charge.

It is important to be aware that the Zurich Vista Savings Plan is a long term savings plan, if you decided to cancel the plan early you could lose a large proportion of the money you have saved, we have heard that as much as 80% of the value of the plan value can be lost by surrendering the Zurich Vista Savings Plan early, or indeed in the first year or so it is not unusual to get nothing back.

Expat Money Expert Verdict on Accessibility 
 



Expat Money Expert Assessment of the Zurich Vista Plan

A predominantly commission-based adviser’s product with limited use or appeal.

The Zurich Vista Savings Plan is similar to many in the offshore market place. Similar to the Generali Vision plan this type of plan may have been a common option in the UK back in the 1990s but in 2016 it lacks the transparency of the latest plans available from territories such as the UK, the USA and parts of Europe; ultimately, the Zurich Vista Savings Plan is an expensive option when compared with a pure platform plan.

The standard Zurich Vista Savings Plan funds have high ongoing fees when directly compared to platform or direct offerings from fund houses via the UK or the USA. The Zurich Vista Savings Plan can have high charges on early access. You may not get back all of your savings with an Zurich Vista Savings Plan and there are no guarantees that the portfolio will give you the returns you are expecting, but any attempt to take proceeds early in the plans life, or make it paid up, will result in access penalties or higher charges on the remaining invested funds, or both.

However, some people require help when making disciplined decisions and will welcome the fact that a plan is written to a set target date and cannot be accessed early without a surrender penalty; some people wish to deliberately lock-up their funds. Therefore, potential investors have to weigh up the benefits of locking up their investments and not having the flexibility to access their investment earlier without surrender charges applied

NOTE: The Zurich Vista Savings Plan provides the option of lump sum commission to its distributors (in the industry this is called indemnified or up-front commission) and it has a successful network of distributing agents throughout the world excluding the main regulated territories. The amount the distributor earns is linked to the length of the policy; the longer the policy term the longer the surrender penalty incurred on early access, the more money the distributor or adviser earns. Not all distributing agents have regulation or financial qualifications and may not be aware of the other saving plan options available.

WARNING: Costs and information is correct as of February 2017. Please refer to a brochure from the company for current up to date information and any changes on costs or information. You should not buy based purely on information contained within this article and EME do not accept liability for purchases. If you have any doubts then please speak with your financial adviser or a representative of the company for further advice.

If the provider improves or amends its terms then EME would like to hear from them to amend the review page accordingly, and providers are encouraged to comment on errors or omissions to ensure that readers have the latest and correct information.



Comments 4

  1. Careful people! I am stuck with my Zurich Vista plan since I moved to the US last year. Apparently, you cannot continue contributing to this plan if you are in the US and you really have two options:
    1. Withdraw what you have invested at the current value, excluding a very heavy Surrender Penalty (for me that’s a loss of 42%)
    2. Keep your contributions in Zurich Vista, until you move out of the US. You cannot change your existing plan, you cannot contribute any more, and you will be charged the annual fees of 4%. Hence, if your funds start incurring a loss, you fund value will start reducing and you cannot do anything about it.

  2. My brother recommended I might like this blog. He was entirely right. This post actually made my day. You can not imagine simply how much time I had spent for this info! Thanks!

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  • Charges criteria

    Charges are assessed inclusive of fund fees, capital units, bid/offer spread criteria and third party management fees which are often ignored but are, in effect, compulsory additional costs that essentially must be considered by clients.


    Star ratings

    The star ratings apply at inception of the products and in at least the first 2 -8 years. Some products reduce charges or become more accessible with time held, but the length varies for each product; from our reviews it is typically overall between 5-10 years.

    These ratings are awarded based on information obtained from the companies at a certain date. It is worth considering obtaining the latest updated information yourself before making a decision.


    Star ratings

    ChargesOverall charges greater than 5% per annum.
    FundsLimited selected range of collectives or mirror funds with upfront additional charges (Bid/Offer spread) or initial “capital” units.
    AccessibilityTo avoid access penalties, only accessible after establishment period of 8 years or longer.
    Overall AssessmentA commission-based adviser’s product. Not recommended under any circumstances.

    ChargesOverall charges greater than 4% per annum.
    FundsIn-house range of collectives or mirror funds with upfront additional charges (Bid/Offer spread).
    AccessibilityPenalties resulting in loss of fund value may exist for 5 years – 8 years.
    Overall AssessmentA predominantly commission-based adviser’s product with limited use or appeal.

    ChargesOverall charges between 2.5% and 4% per annum.
    FundsIn-house or limited range of collectives or mirror funds with no Bid/Offer spread.
    AccessibilityTo avoid access penalties, only typically accessible after establishment period of 12-24 months or longer, but with no penalties thereafter.
    Overall AssessmentFor those seeking lock-in target dates (perhaps with guarantees) over 5 years.

    ChargesOverall charges less than 2.5% per annum.
    FundsFull range of collectives with no Bid/Offer spread and rebates on charges reducing annual costs.
    AccessibilityImmediate within 60 days without any penalties on any item.
    Overall AssessmentRecommended for some situations and some people due to lower charges and flexibility.

    ChargesOverall charges less than 1.5% per annum.
    FundsIncludes ETPs (passive) and Individualised accessible collectives with no Bid/Offer spread and clean share classes for lowest annual costs.
    AccessibilityImmediate within 30 days without any penalties on any item.
    Overall AssessmentRecommended for most situations and most people, with full transparency and low charges.