How it works
MAS set out what it expects of an advance premium facility in a circular to life insurers in July 2017. The facility should only help with the policy itself, for example when an owner can't pay for a while because they're travelling. Insurers shouldn't market it as a savings account or offer attractive interest rates to draw money in.
- It should normally hold no more than the next annual premium, unless the owner's circumstances call for longer.
- The insurer has to say in writing that it isn't a bank account or a deposit, whether you can withdraw, and any penalty for doing so.
Worked example: a client paying S$2,400 a year is going overseas for a year. The facility can hold up to S$2,400, next year's premium, and the insurer pays it when it falls due.
Paying a year ahead where the insurer applies the money to the premium straight away isn't an advance premium facility, by MAS's definition. MAS still expects the insurer to warn that the money may not be refunded if the policy ends early or there's a claim.
The other APF: on some advisors' commission statements, APF is a payment to the advisor, not a client facility. Some insurers run a provident fund for their advisors under that name. What it stands for and how it's worked out are in that insurer's contract. We couldn't find a public source for it in Singapore, so there are no figures here.
Where it shows up in your week
It comes up when a client is about to travel or asks to pay ahead. ActivityTracker for financial advisors keeps that chat on the client's record, so next year's premium date isn't a surprise.