Hello savvy investors out there, please help me review and comment this policy as follows:
Tokio Marine Infinite VIP - Lifetime Income, financing applicable and optional
Assuming a Single Premium of $533,400 - that yields an income stream of $2k / month for life after the 5th year - which translates to $24k per anmum (all in SGD):
Return on Investment (Without Leverage) = 24,000 / 533,400 = 4.5%p.a.
Assuming the same scenario but with Leverage Financing applied:
Upfront Cash = 40% x $533,400 = $213,360
Financing amount = 60% x $533,400 = $320,040
Interest applied @ SIBOR3M + 0.75% = $320,040 x 1.45% = $4,640.58 per year (approximately)
Therefore,
Nett outlay over 5 years = $213,360 + (5 x $4,640.58) = $236,562.90
Nett annual Income = ($24,000 - $4,640.58) / $236,562.90 = 19359/236563 = 8.18% (an income stream of approximately $19,359 per year!)
Assuming the scenario where SIBOR3M increases to 2.25% (that's 300% the current rate!)
Therefore total interest rate = 0.75+2.25 = 3.00%
Cost of Financing per year = $320,040 x 3.00% = $9601.20 per year
Nett outlay over 5 years = $213,360 + (5 x $9601.20) = $261,366
Nett Income = ($24,000 - $9601.20) / $261,366 = 5.51%
Also do include the Death Benefit of 101-105% of the initial $533,400.
Tokio Marine Infinite VIP - Lifetime Income, financing applicable and optional
Assuming a Single Premium of $533,400 - that yields an income stream of $2k / month for life after the 5th year - which translates to $24k per anmum (all in SGD):
Return on Investment (Without Leverage) = 24,000 / 533,400 = 4.5%p.a.
Assuming the same scenario but with Leverage Financing applied:
Upfront Cash = 40% x $533,400 = $213,360
Financing amount = 60% x $533,400 = $320,040
Interest applied @ SIBOR3M + 0.75% = $320,040 x 1.45% = $4,640.58 per year (approximately)
Therefore,
Nett outlay over 5 years = $213,360 + (5 x $4,640.58) = $236,562.90
Nett annual Income = ($24,000 - $4,640.58) / $236,562.90 = 19359/236563 = 8.18% (an income stream of approximately $19,359 per year!)
Assuming the scenario where SIBOR3M increases to 2.25% (that's 300% the current rate!)
Therefore total interest rate = 0.75+2.25 = 3.00%
Cost of Financing per year = $320,040 x 3.00% = $9601.20 per year
Nett outlay over 5 years = $213,360 + (5 x $9601.20) = $261,366
Nett Income = ($24,000 - $9601.20) / $261,366 = 5.51%
Also do include the Death Benefit of 101-105% of the initial $533,400.