Rate-of-return for Endowments

[Shion]

I came across some webby posts on the rate-of-return for endowments

http://www.investmentmoats.com/budg...ving-plans-endowment-give-you-3-to-5-returns/

http://www.investmentmoats.com/budg...ving-plan-endowment-that-actually-lost-money/

http://www.investmentmoats.com/budgeting/insurance/25-year-insurance-endowment-policy-yields-3/

http://www.bigfatpurse.com/2014/06/the-actual-returns-of-endowment-plans/

What do you think ?

 

[OngHuatHuat]

Only read the first link.

Yeah the return is quite decent actually for a low risk product.

I have one ntuc endowment plan, but I always get cash back instead of putting it back for compiling.

 

[WindBoi]

these are historical returns. returns are usually based on returns in the past. if 50% of participating fund is bonds, which are yielding less, returns may be lower.

you can compare against the 10 year yield of the Singapore savings bonds.

Here is the table for the dec 2015 issue > http://www.investmentmoats.com/savi...ingapore-savings-bonds-yields-244yr-10-years/

 

[Shion]

Another one I found

http://www.bigfatpurse.com/2014/06/the-actual-returns-of-endowment-plans/

 

[joshua182]

Its one of the lowest risk products around so the returns are fair at best.

 

[SBC]

Very difficult to exceed 4%. Try to get one that allows CC payment.

 

[henrylbh]

I had 2 endowment policies that matured with less than 4% and at that time interest rates environment was much higher.

 

[SBC]

Good bet is 2.9 to 3.5% now.

 

[Shion]

Upz for more comments

 

[Lewis.T]

Good bet is 2.9 to 3.5% now.

Could go higher, Pru has one at 3.87%. I'm sure some other companies have similar returns too?

 

[henrylbh]

Could go higher, Pru has one at 3.87%. I'm sure some other companies have similar returns too?

3.87% compounded annually? Projected or you have checked the final yield yourself and not what they indicate? In present low interest rates environment unlikely to get such yield.

 

[Lewis.T]

3.87% compounded annually? Projected or you have checked the final yield yourself and not what they indicate? In present low interest rates environment unlikely to get such yield.

Yes compounded annually. Definitely projected, its a new product just launched this year.

 

[henrylbh]

Yes compounded annually. Definitely projected, its a new product just launched this year.

None of my policies, endowment as well as several single premium policies ever pay projected rate. All short.

 

[Lewis.T]

None of my policies, endowment as well as several single premium policies ever pay projected rate. All short.

Pru have had policies that paid above projected yields. Current fund is doing okay too, can meet the 4.75% column projection, but as always, past performance is not an indicator of future performance.

 

[Shion]

I believe TM gives one of the highest % last time. Not sure for now.

 

[henrylbh]

Pru have had policies that paid above projected yields. Current fund is doing okay too, can meet the 4.75% column projection, but as always, past performance is not an indicator of future performance.

I had a single premium policy with Pru. Never got what they projected.

 

[Lewis.T]

Which policy would that be? And which year did you get it if you don't mind sharing? Also the projected and the amount you got back would be nice too.

 

[henrylbh]

I had a PruInvestor single premium that mentioned "your projected returns at the end of the policy term is equivalent to a yield of 5.03%"

Instead of $16,332 I finally got $13,240 or near 2.846% which was slightly better than guaranteed amount of $12,500 at 2.256% but far from projection

 

[henrylbh]

Pru have had policies that paid above projected yields. Current fund is doing okay too, can meet the 4.75% column projection, but as always, past performance is not an indicator of future performance.

Give actual numbers of policies that paid above projection. Give premium paid, no. of years and maturity amount and we can do the calculations for the actual yields.

 

[Lewis.T]

I had a PruInvestor single premium that mentioned "your projected returns at the end of the policy term is equivalent to a yield of 5.03%"

Instead of $16,332 I finally got $13,240 or near 2.846% which was slightly better than guaranteed amount of $12,500 at 2.256% but far from projection

Could it be you are confusing yield with compound interest? They are different things.