Pru Lifetime Income and Pru Life Multiplier Flex

MikeDirnt78

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thank you, what other options would you recommend?

Do you know how they calculate the total premium required for this?

Total premiums will probably rise with age.

Actual numbers must get from agents.

To ask why must check with the actuarist.

Whatever it is, just remember the expected payouts of ALL policyholders <<< premiums paid by ALL policyholders.

You are quite a senior in this forum. You should have read a lot of posts to become more financially savvy.
 

Sausage

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Thank you,

I was quoted a full premium of $96000 payable over 4 years (ie. $24k/year). Not sure how they calculated this, but I've seen a lot of variations, like in their brochure they cited for a 40-year-old example $7200/year payable over 20 years - which makes a total of $144k premium. Then there are people paying $50k total, and so on. Is it really so variable? That makes it like health insurance when the only health question they ask is whether you smoke.
 

MikeDirnt78

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Thank you,

I was quoted a full premium of $96000 payable over 4 years (ie. $24k/year). Not sure how they calculated this, but I've seen a lot of variations, like in their brochure they cited for a 40-year-old example $7200/year payable over 20 years - which makes a total of $144k premium. Then there are people paying $50k total, and so on. Is it really so variable? That makes it like health insurance when the only health question they ask is whether you smoke.

There is a time value factor at play. Assume same age.

Payable over 4 years versus payable over 20 years. If you sum up the premiums, the former will be less than the latter plan.

Why? Because the insurance company can invest your premiums earlier if you pay more upfront.
 

Sausage

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thank you, i think i'm starting to get it.

reason why I'm suddenly so interested in this is because to my untrained eye i may be able to get a better price, so I need the more experienced to see if it's really worth it.

I was quoted a $96k premium over 4 years. Now the thing is, there is an option to pay by credit card, and the credit card offers a 1.8% cashback if you spend around $2000. On top of that, if you spend it on insurance products, you get an additional 0.7%. Bet you can guess which card it is. So the thing is, if you have $100k to base this cashback on, and you pay $2000 a month for this via your credit card, you can get around $215 back a month, which can reduce the premium to around $1794 monthly => resulting in a total premium of around $86k, around $10k off the quoted amount initially.

I am not sure if I am missing anything or if this is sound as I'm new to this.


But I'm puzzled by the very early post in this thread:

Premium term of 20 for male non-smoker anb 28 is $2425.50 minimum per year.

Total premium payable is $48,510 over 20 years.

Why is the total premium here almost half of what I was quoted for a 4-year payment term, when this is for a 20-year-term? There's only a 10-year age difference, is it supposed to be so drastic?

And then I also saw this on CPF life:

Under the current CPF Standard Plan - the default option - a CPF member with about $80,500 on his accounts can expect to receive $720 a month for the rest of his life.

This seems much much better, with just $80,500, you get $720 a month for the rest of your life, as opposed to around $1000 a year for the prudential one. Am I missing something here?
 
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JuniorLion

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thank you, i think i'm starting to get it.

reason why I'm suddenly so interested in this is because to my untrained eye i may be able to get a better price, so I need the more experienced to see if it's really worth it.

I was quoted a $96k premium over 4 years. Now the thing is, there is an option to pay by credit card, and the credit card offers a 1.8% cashback if you spend around $2000. On top of that, if you spend it on insurance products, you get an additional 0.7%. Bet you can guess which card it is. So the thing is, if you have $100k to base this cashback on, you can get around $215 back a month, which can reduce the premium to around $1794 monthly => resulting in a total premium of around $86k, around $10k off the quoted amount initially.

There must be a cap to the cashback you can receive.
 

Bigoya

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There is a time value factor at play. Assume same age.

Payable over 4 years versus payable over 20 years. If you sum up the premiums, the former will be less than the latter plan.

Why? Because the insurance company can invest your premiums earlier if you pay more upfront.

While the amount is less over the 4 years premium, you forgot to mention that value wise, it is actually more expensive!
 

Sausage

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While the amount is less over the 4 years premium, you forgot to mention that value wise, it is actually more expensive!

don't quite understand this, can explain?
you mean that the amount paid for is more, but the amount you get back is less?
 

sgdividends

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what were their reasons?

Normally it's the usual reasons that they need cash or suddenly realise it's a bad deal..I didn't ask them much as I didn't want to waste their time.

Anyway, I read your post on the cc cashback but I don't think it should be a factor in your decision . Basically their premiums for the first 2 years are their commissions and if I remember I look at the BI, the total guaranteed at the end is much lower than the total premiums so it really hoping that Prudential does a good job with their investments . There is no penalty if they do badly, no matter what they earn . Why not save the commission's to buy an etf with the commission saved as a margin of saftey

Plus no lock in for a damn damn long time
 

Sausage

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the total guaranteed at the end is much lower than the total premiums so it really hoping that Prudential does a good job with their investments .

this has me interested, where can I find this info on the total guaranteed at the end? Is this a projection based on a worst case scenario for the par funds?

Of course they'll paint a very rosy picture of smoothing to show a lower but guaranteed bonus but I want to see some exact figures, and all they showed me was business times articles on how prudential is often in the top percentile of performers.
 

sgdividends

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this has me interested, where can I find this info on the total guaranteed at the end? Is this a projection based on a worst case scenario for the par funds?

Of course they'll paint a very rosy picture of smoothing to show a lower but guaranteed bonus but I want to see some exact figures, and all they showed me was business times articles on how prudential is often in the top percentile of performers.

Ask the agent for a benefit illustration.

It has effects of deductions , so u can see all the commission's .

It also shows the death benefit and surrender values every year.

Just focus on the guaranteed portion .
 

Bigoya

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don't quite understand this, can explain?
you mean that the amount paid for is more, but the amount you get back is less?

A dollar today is worth more than a dollar tomorrow due to inflation. The same dollar would have an even smaller value 20 yrs down the road.

Would u rather pay a higher amount today or a higher amount tomorrow?

And in addition, if u do your own investments, by paying less today also means u could potentially grow more for tomorrow.
 

Bigoya

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Ask the agent for a benefit illustration.

It has effects of deductions , so u can see all the commission's .

It also shows the death benefit and surrender values every year.

Just focus on the guaranteed portion .

That cost doesn't 100% goes to agents. Employees of the insurer work for free?
 

Sausage

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I got the BI for the prulifetime income plan. Can I have some opinions assessing it? I'll go first, please note I have no financial background so I may have missed something; would appreciate advice.

The total premium is around $94k, to be paid over 4 years ($2000 a month). (no idea how they came up with this sum but the 2k a month is to qualify for 1.88% cashback if paying by credit card.)

death benefit/Surrender value
OxtixWL.png


To me, the death benefit seems average, you get back around 105% of what you paid should you die and it goes to your family. But the surrender value doesn't look enticing, even if you somehow live till 99, based only on the nonguaranteed returns, you won't get back the principal sum.

Yearly cash benefit illustration
BDso3Yg.png


Based on the yearly payout illustration, if we go by guaranteed sum alone, it really doesn't look good at aroundd $1350 yearly. I guess the appeal of these to buyers must be from the nonguaranteed amount, which looks sizeable)?

The bank agent keeps calling me to hurry up and fund the plan, but I'm not convinced at this point. Although with the cashback from paying for this by credit card works out to amost $10k off the sum required.
 

akwl88

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I got the BI for the prulifetime income plan. Can I have some opinions assessing it? I'll go first, please note I have no financial background so I may have missed something; would appreciate advice.

The total premium is around $94k, to be paid over 4 years ($2000 a month). (no idea how they came up with this sum but the 2k a month is to qualify for 1.88% cashback if paying by credit card.)

death benefit/Surrender value
OxtixWL.png


To me, the death benefit seems average, you get back around 105% of what you paid should you die and it goes to your family. But the surrender value doesn't look enticing, even if you somehow live till 99, based only on the nonguaranteed returns, you won't get back the principal sum.

Yearly cash benefit illustration
BDso3Yg.png


Based on the yearly payout illustration, if we go by guaranteed sum alone, it really doesn't look good at aroundd $1350 yearly. I guess the appeal of these to buyers must be from the nonguaranteed amount, which looks sizeable)?

The bank agent keeps calling me to hurry up and fund the plan, but I'm not convinced at this point. Although with the cashback from paying for this by credit card works out to amost $10k off the sum required.

what a rubbish plan judging from your excel sheet :vijayadmin:
 

mSnooze

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I got the BI for the prulifetime income plan. Can I have some opinions assessing it? I'll go first, please note I have no financial background so I may have missed something; would appreciate advice.

The total premium is around $94k, to be paid over 4 years ($2000 a month). (no idea how they came up with this sum but the 2k a month is to qualify for 1.88% cashback if paying by credit card.)

death benefit/Surrender value
OxtixWL.png


To me, the death benefit seems average, you get back around 105% of what you paid should you die and it goes to your family. But the surrender value doesn't look enticing, even if you somehow live till 99, based only on the nonguaranteed returns, you won't get back the principal sum.

Yearly cash benefit illustration
BDso3Yg.png


Based on the yearly payout illustration, if we go by guaranteed sum alone, it really doesn't look good at aroundd $1350 yearly. I guess the appeal of these to buyers must be from the nonguaranteed amount, which looks sizeable)?
This plan need 25-30 years before it can even breakeven.

For that amount of time frame to breakeven, if you are looking at endowments, there are a handful that can do way better than that.

The bank agent keeps calling me to hurry up and fund the plan, but I'm not convinced at this point. Although with the cashback from paying for this by credit card works out to amost $10k off the sum required.

If the stuff is good, he don't have to worry about rushing you to fund it, because sooner or later you will go back to fund it yourself.
Don't be tempted by freebies or vouchers enticement.
Understand what you really want to achieve in different time horizon before making any purchase.

http://www.straitstimes.com/business/7-tips-before-buying-insurance-from-a-bank
 

Sausage

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thank you, not sure if my interpretation is correct, but to me it looks like

1. going by guaranteed returns (annual cash benefit of $1350) only, you will never break even even at 99 years old

2. Assuming you live till 77, at that point you are guaranteed to only get back $41850 of annual cash benefits. The time frame to see good returns is longer than a typical human lifespan.

3. If you are lucky you'll also get the nonguaranteed component, which at 77 years old can be up to an accumulated $27k assuming you get this every year it's supposed to be given. Or nothing, if you're unlucky.

4. Overall, the plan looks good only if you die, or live beyond 99. If you don't die early, you'll only break even and recover around the principal $94k beyond 99 years of age. Which still means you're likely to be dead.

Are these correct?
 

Sausage

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also, I just received the proposal with the BI but there's no cover letter with a date . Just the proposal and BI, my customer investment profile, and some guide to life insurance. Do I use the date on the envelope (26 Jan 2018) to calculate the free-look period? Or do I use the date on which I signed the initial proposal form in the bank (20 Jan 2018) as the start point?
 

Sausage

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or is my understanding totally wrong?

also can anyone advice when the 14 day free look period starts? Am I supposed to get a cover letter with a date?
 
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