Insurance par policy primer: What smoothing and cross subsidy mean for you

MOST policyholders of traditional participating life plans can breathe a sigh of relief that they will not suffer any bonus cut this year.

But a relatively small proportion of policies from three firms - AIA, AXA and Tokio Marine Life Insurance - will suffer some reductions in bonus and dividend payouts.

Why the bonus cuts, you might ask, since investment returns of life funds in 2019 were strong? Based on our compilation of the returns of eight insurers - HSBC Insurance's returns were not available as at press time - most life funds delivered double-digit returns.