A 101 plan is a fund platform wrapped in a life policy: read the lock-in and the fees before the funds

What the name means

In Hong Kong a "101 plan" is not a product name. It is the market's shorthand for an investment-linked assurance scheme (ILAS) whose death benefit is 101% of the policy account value: the insurer is on risk for only 1% above whatever the chosen funds are worth, so the policy is in substance a long-term fund contribution platform wrapped in a life contract. The number is historical. From 1 January 2015 all Hong Kong ILAS products have had to provide a minimum death benefit of 105% of account value (Insurance Authority GL15, paragraph 5.2(b); trade press in August 2014 reported the increase from 101%). Products sold today therefore state 105% in their Product Key Facts Statement (KFS) and are classified by the Investor and Financial Education Council (IFEC) as "Pure 105". This site uses the familiar name but applies the current 105% rule throughout.

Structure: who owns what

The IFEC comparison table (20 February 2023) sets out the defining difference from buying funds directly. Under a 101 plan you are a policy owner with contractual rights against the insurer; the insurer owns the underlying funds and you hold notional units in "investment choices" that track those funds after policy-level charges. A fund investor owns units in a fund whose assets are held by an independent trustee or custodian. If the insurer becomes insolvent you are an unsecured creditor; Hong Kong has no policyholder protection scheme in operation as at November 2026.

A regular-premium 101 plan runs two accounts. Premiums paid during the initial contribution period, 18 or 20 months in a KFS dated September 2020, go to an initial unit account that carries the higher platform fee (0.375% a month, 4.5% a year, in that example) and is the only base for the surrender charge. Later premiums and top-ups go to an accumulation unit account with a lower fee that can usually be partially withdrawn.

Contribution and lock-in periods

Three periods matter. The premium payment term is the contractual commitment, typically 5 to 25 years. The initial contribution period is the opening 18 to 24 months used to build the initial unit account. The period with surrender charge, which the market calls the lock-in, may equal the payment term (5 to 10 years in one published KFS) or be shorter than it (5 years on a 5-year term and 9 years on a 20-year term in a KFS dated January 2025). A premium holiday is not a free pause: IFEC's FAQ notes that charges continue, bonuses fall and the policy lapses if the account can no longer cover monthly deductions.

Fees and bonuses

Policy-level charges are the platform fee (called administration or account maintenance fee by different insurers), the cost of insurance on a net amount at risk of just 5% of account value, a policy fee (US$6 a month in one example, refunded at the end of the payment term) and surrender or withdrawal charges. Fund-level management, performance and custody fees are deducted inside fund prices; fund managers may rebate up to 60%, 70% or 82% of their management fee to the insurer, a figure every KFS must disclose. Bonuses run the other way: welcome or special bonuses credited as units when first-year premium exceeds a threshold (US$1,800 in one example), and a loyalty bonus of 0.075% of account value a month after the payment term ends. Published KFS summaries put total policy-level fees net of bonuses at 23% of contributions (5-year term, 20-year hold, 3% assumed return) or 15.3%, 25.4% and 32.6% over 10, 15 and 20 years. The SFC's circular of 1 November 2021 requires cost of insurance not to exceed comparable term life, platform fees to be comparable with alternatives and surrender charges on low-protection products to be lower and shorter; existing products had until 30 April 2023 to comply.

Early surrender cost

Surrendering within the lock-in costs three things: the surrender charge on the initial unit account, the clawback of bonuses, and the platform fees already deducted. One KFS gives the formula rate = A − (A − B) × T/12 and a worked example: initial unit account US$20,000, accumulation account US$6,500, rate falling from 31% to 28.5% in the tenth month of a policy year, charge US$5,700, surrender value US$20,800. Maximum rates in published KFS are 49%, 40% and 16.5% for regular-premium plans and 5% for single-premium plans over the first five years. The cooling-off period is 21 calendar days from delivery of the policy or the cooling-off notice, whichever is earlier (GL29); an ILAS refund is subject to a market value adjustment that the SFC Code (paragraphs 5.12 to 5.13) limits to the insurer's loss on realising assets, excluding expenses and commission.

Sale process and regulation

Offering documents are authorised by the SFC under the Code on ILAS; the sale is governed by IA GL15 (insurers, effective 26 June 2017) and GL26 (insurers and intermediaries, effective 23 September 2019). GL26 requires a Financial Needs Analysis, a Risk Profile Questionnaire, an Important Facts Statement and Applicant's Declarations with remuneration disclosure on an all-year-average basis, and an audio-recorded post-sale call within five working days of policy issue or a point-of-sale recording. Top-ups within 12 months of the last FNA and RPQ through the same insurer or intermediary may be exempt from repeating them if circumstances are unchanged. Switching between investment choices is often free and unlimited; replacing an old policy with a new one falls under GL27 and is almost always the most expensive form of "switching".

Mainland Chinese applicants

Holders of a PRC resident identity card must complete the entire sale and sign all documents in Hong Kong through a Hong Kong-licensed intermediary, and must sign the Important Facts Statement for Mainland Policyholders (issued 8 July 2016, effective 1 September 2016), which warns about early surrender charges, currency risk on HK$ or US$ policies, the risk that Mainland foreign-exchange policy changes prevent premium payment, rebate arrangements, source-of-funds verification and the possible need to attend in Hong Kong for claims or disputes. Hong Kong insurers report cash value insurance contracts under CRS and the Chinese Mainland has been an exchange partner since 2018. This site carries on no sales activity in Mainland China; tax and foreign-exchange questions require advice in the reader's own jurisdiction.

Market size

IA provisional statistics put new office premiums of linked individual business at HK$11.2 billion in 2024, flat on 2023, and HK$12.7 billion in the first three quarters of 2025, up 75.7%. The figures cover all ILAS including Protection Linked Plans; the IA does not publish a separate Pure 105 series. See the comparison and the FAQ for more.