You can lose your entire capital in this structured product!

An insurance company (not NTUC Income) sold a single premium product that pays an annual return of 4.9%. According to their advertisement, they will return 100% of the capital at the end of 7 years. There is a footnote that "terms and condition applies".

A financial expert who analysed this product told me that there is a risk that the investor may lose 100% of the capital invested, if 21 of the 120 investments failed.

Many of the investors may not be aware about this risk. If this event occur, they can lose their entire capital. If they invest $100,000, they may have to lose all of $100,000. Although the probably it low, it can be quite frightening.

Apparently, the agents who sold this product did not highlight this risk to the clients.

I advise investors who have bought this product to seek clarification from the insurance company.