Family and Personal Income Plan (FPIP) Sum Assured Formulae

FPIP is a monthly benefit contract with the option to have a lump sum at claim stage.

In order to compare FPIP with normal term assurance policies, a commuted lump sum valve is calculated based on the term of the policy, and whether the policy is required on a level or indexed basis.

The lump sum can then be measured against medical evidence limits and reinsurance treaty limits.

For applications quoted on or after 15 February the formula is:

Level or Indexed Sum Assured

Monthly benefit x 12 x term / 2

For applications quoted before 15 February 2009, the following calculation was used:

For the calculations below, please note that * means “to the power of” and the symbol for this on the scientific calculator is X^Y:

Level Term Assured

Monthly benefit x 12 x [1 – 0.9615* (term in years)] / 0.04

Indexed Sum Assured

Monthly benefit x 12 x [1 – 0.9901* (term in years)] / 0.01