Author
Bowtie Team
Updated on
2025-07-10
Disclaimer: This article is translated with the assistance of AI.
Bowtie breaks down the best USD short-term savings insurance plans of 2024, comparing minimum premiums, payment terms, and guaranteed returns.
USD Short-Term Savings Insurance
Short-term savings insurance is primarily designed for capital preservation, offering guaranteed returns. Currently, USD short-term savings insurance plans in the market mainly come with 3-year or 5-year policy terms, though some insurers also offer 1-year, 2-year, or even up to 8-year plans. Payment options include lump-sum prepayment, 1-year contributions, or 2-year contributions, with guaranteed maturity Internal Rate of Return (IRR) ranging from 1.7% to 4.61%.
USD Short-Term Savings Insurance Comparison
8-Year Plans
| Product | Company F
Plan 1 |
| Contribution Period | 1 Year or Prepayment |
| Guaranteed Maturity IRR | 4.3% |
| Guaranteed Break-Even Period | 5 Years |
| Minimum Total Contribution | USD 6,250 |
| Guaranteed Maturity Return Ratio | 140.1% |
5-Year Plans Comparison
| Product | Company B
Plan 2 |
Company W
Plan 1 |
Small H Company
Plan 1 |
| Contribution Period | 1 Year or Prepayment | 1 Year or Prepayment | 2 Years |
| Guaranteed Maturity IRR | 4.51% | 4.49% | 4.1% |
| Guaranteed Break-Even Period | 3 Years | 2 Years | 4 Years |
| Minimum Total Contribution | USD 4,000 | USD 800 | USD 1,800 |
| Guaranteed Maturity Return Ratio | 124.7% | 124.6% | 119.7% |
| Product | Company W
Plan 2 |
Company B
Plan 3 |
Big H Company
Plan 1 |
Big H Company
Plan 1 |
| Contribution Period | 1 Year or Prepayment | 1 Year or Prepayment | 1 Year or Prepayment | 2 Years |
| Guaranteed Maturity IRR | 3% | 2.71% | 2.35% | 2.3% |
| Guaranteed Break-Even Period | 3 Years | Immediate | 5 Years | 5 Years |
| Minimum Total Contribution | USD 800 | USD 4,000 | USD 5,000 | USD 5,000 |
| Guaranteed Maturity Return Ratio | 115.9% | 114.3% | 112.3% | 110.8% |
3-Year Plans Comparison
| Product | Company W
Plan 3 |
Company C
Plan 1 |
Company C
Plan 2 |
Company C
Plan 2 |
| Contribution Period | 1 Year or Prepayment | 2 Years | 1 Year or Prepayment | 2-Year Contribution |
| Guaranteed Maturity IRR | 4.34% | 3.29% | 2.44% | 1.95% |
| Guaranteed Break-Even Period | 1 Year | 3 Years | 3 Years | 3 Years |
| Minimum Total Contribution | USD 800 | USD 18,750 | USD 1,200 | USD 1,200 |
| Guaranteed Maturity Return Ratio | 113.6% | 108.4% | 107.5% | 105% |
2-Year Plans
| Product | Company B
Plan 4 |
| Contribution Period | 1 Year or Prepayment |
| Guaranteed Maturity IRR | 3.83% |
| Guaranteed Break-Even Period | 2 Years |
| Minimum Total Contribution | USD 13,000 |
| Guaranteed Maturity Return Ratio | 107.8% |
1-Year Plans Comparison
| Product | Small H Company
Plan 2 |
Company B
Plan 4 |
| Contribution Period | 1 Year or Prepayment | 1 Year or Prepayment |
| Guaranteed Maturity IRR | 4.61% | 1.7% |
| Guaranteed Break-Even Period | 1 Year | 1 Year |
| Minimum Total Contribution | USD 7,500 | USD 13,000 |
| Guaranteed Maturity Return Ratio | 104.6% | 101.7% |
Key Notes on Buying USD Short-Term Savings Insurance
Early Surrender May Lead to Losses
Most USD short-term savings insurance plans have a guaranteed break-even period of 3 to 5 years. Surrendering the policy before this period will result in financial losses. Apart from ultra-short 1-year plans, only Company B’s 5-year plan offers guaranteed immediate returns, and Company W’s 3-year plan guarantees break-even in the first year.
Take Company H’s 5-year savings plan (with a 2-year premium payment term) as an example. If you surrender in the first year, the guaranteed IRR drops to -11.13%, highlighting the potential loss from early surrender.
Therefore, before purchasing, make sure to check the break-even period and surrender policies of each plan. Understand the potential losses from early surrender. Of course, it’s always best to stick to the full policy term to maximize returns.
Know Your Insurer’s Financial Health
Unlike bank fixed deposits, premiums paid for savings insurance are not protected under any deposit protection scheme. So, before signing up, it’s crucial to thoroughly understand the insurer’s operations, financial stability, and credit ratings. If the insurer fails to honor the policy contract, policyholders risk losing all paid premiums and the promised benefits.
Why “Buy Term, Invest the Rest” Beats Savings-Type Life Insurance?
Instead of opting for whole life insurance with lower guaranteed returns (you can use Bowtie’s exclusive BTIR Calculator to check the actual return levels of such policies) , consider the “Buy Term, Invest the Rest” strategy. This means purchasing pure protection Term Life Insurance and pairing it with short-term savings insurance or other investment products with higher guaranteed returns. This way, you get life protection and decent savings returns at a lower premium cost.
Bowtie Term Life is a term life product that provides a lump-sum payout to beneficiaries upon the insured’s passing. Its key features include:
- Pure protection with no savings component
- Coverage amount up to 40 times higher than typical savings life products for the same premium*
- Monthly premium as low as HK$38 per HK$1 million coverage
- * Calculated based on standard premiums for a 35-year-old non-smoking female with a coverage of HK$1,000,000; Term Life Insurance: Data reflects standard premiums for term life insurance (20-year coverage period) in the market as of July 1, 2020.
Data Source
- 1 Comparing Short-Term Savings Insurance | 10Life
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