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QDAP and TVC are both retirement financial planning tools. However, they differ in terms of nature, features and limitations. You should study the details and select appropriate products based on your own needs. Product information can be obtained from the product providers. For tax deduction-related questions, please visit the website of the Inland Revenue Department (www.ird.gov.hk)。

 
QDAP TVC
Nature Insurance Fund investment
Investment decision A policyholder does not need to make any investment decision. The insurance company is required to disclose the internal rate of return of the relevant products, of which the guaranteed part must comply with the minimum return requirement. There are various funds available for selection under the MPF schemes. Scheme members have to bear investment risks.
Minimum premiums or contribution amount Minimum total premiums of $180,000 N.A. (Note)
Minimum payment or contribution period 5 years No
Fixed premiums or contributions intervals
Subject to contract terms.  Usually, premiums are paid yearly, half-yearly or monthly. A scheme member can make TVC anytime or regularly.
Payment or contribution break
Subject to contract terms. Usually if a policyholder misses a payment, he or she will suffer financial loss because part of the cash value of the annuity would be used to cover the payment in the form of policy loan. This may also result in policy lapse. Contributions can be stopped or the amount can be changed at any time. However, withdrawal of benefits from the account is subject to the preservation requirement until the age of 65 (unless exempted on other statutory grounds, e.g. early retirement at the age of 60).
Termination Subject to the contract terms. Early surrender or termination will incur financial loss. The surrender value could be much less than the total amount of premiums paid. Contributions can be stopped at any time. However, withdrawal of benefits from the account is subject to the preservation requirement until the age of 65 (or on other statutory grounds, e.g. early retirement at the age of 60)
Age of payout or withdrawal 50 or beyond 65 (unless exempted on other statutory grounds, e.g. early retirement at the age of 60)
Payout or withdrawal period Minimum 10 years, with payouts by instalments Can be withdrawn in a lump sum or by instalments upon retirement
Can a married couple jointly claim the tax deductions? Yes (provided that the deductions claimed by each taxpayer does not exceed the individual cap) No
Cooling-off period Yes, the policy can be cancelled within the cooling-off period No, but a scheme member can stop making contributions at any time
Product provider Insurance companies MPF trustees

Note: Individual MPF schemes may have relevant administrative requirements. Please contact the relevant MPF trustees for details.

 

20 March 2019