Things you should read before buying an endowment plan

[bibu00]

I think there are many pruflexicash thread already. IIRC someone links to plenty last time.

None of them offers gpgt and solid values. Dollars and cents figures

 

[Shion]

None of them offers gpgt and solid values. Dollars and cents figures

Check again. Some of them did gpgt their benefit illustration, surrender value and maturity value info.

 

[Lewis.T]

So you are telling me im contributing $18871 to my agents new satki BMW 7series over 15 years?.

I wish.. your agent gets $2851 over 6 years, or about 4% of your total premiums.

 

[cLip6z]

There should be one part that will illustrate the real rate of returns. Projection is not guaranteed also and MAS came out a ruling to lower the guaranteed amount too

Sent from NIL using GAGT

 

[pcmdan]

That's why I say the projected returns is misleading, useless.
It doesn't represent what client will get, in pure profit terms.
Putting those 4.75% or 5.75% blah blah blah means nothing if it is only going to be cut cut cut or worst...

totally agree... Please, dont EVER BUY ENDOWMENT plans from Insurance. If they are really that good, the Banks would have approached them to work for them (on the investment portion)

 

[pcmdan]

There should be one part that will illustrate the real rate of returns. Projection is not guaranteed also and MAS came out a ruling to lower the guaranteed amount too

Sent from NIL using GAGT

Good Idea, but no one can est, the real rate of returns. If I put inflation rate, 2.5%, it also

1) doesnt guarantee i can earn a 2.5% return
2) doesnt look attractive and tempting to "make" ppl buy

 

[diediex]

Correct me if im wrong, isnt the above picture the sum i paid for the agent to buy his new car?

6th year i should finish paying for his car alr mah.

My guess is Total distribution cost is the actual price of your pure protection for 15 years, which equates to 5150/15=$343 per year (For a $70K sum assured protection, it seems fairly reasonable), and you paid them in your first 5 years.

 

[Shion]

My guess is Total distribution cost is the actual price of your pure protection for 15 years, which equates to 5150/15=$343 per year (For a $70K sum assured protection, it seems fairly reasonable), and you paid them in your first 5 years.

Either you get savings or you get protection.

Best is dont mix these 2 components

 

[Shion]

I do wonder how did the agent sell this product to TS

Was it sold as
1) pure savings
2) savings + (high) protection
3) savings + investment
4) savings + (high) protection + investment

 

[limster]

@5.25% investments returns, my returns should be as shown.
So you are telling me im contributing $18871 to my agents new satki BMW 7series over 15 years?

'Short term' plans are usually not worth it. 15 years time period, you can buy the Fraser's 3.65% bond and roll over to the next one (which may be, say 4%), and you easily beat their projected non-guaranteed return of 2.8%.

Comparison among insurers is important. Maybe you find giving $18,871 to let agent buy 7 series is no good. But another insurer maybe you only give $12,000 so agent can only buy 3 series. This could be a good forum to do such comparisons.

 

[bibu00]

I wish.. your agent gets $2851 over 6 years, or about 4% of your total premiums.

This makes me even angrier zzz...
I think im gonna sign up as an agent after i quit my job. Cant beat the devil, join the devil

I do wonder how did the agent sell this product to TS

Was it sold as
1) pure savings
2) savings + (high) protection
3) savings + investment
4) savings + (high) protection + investment

Savings + protection. Back then i was not financial literate.

So why is there an argument over this plan in the other threads? Where do people find merit in this? Prudential eats a whooping 18% out of the investment (18.8k/108k) and people are still advocating this, discussing the merits of the plan?

 

[w1rbelw1nd]

Savings + protection. Back then i was not financial literate.

So why is there an argument over this plan in the other threads? Where do people find merit in this? Prudential eats a whooping 18% out of the investment (18.8k/108k) and people are still advocating this, discussing the merits of the plan?

I think I understand where these pple are coming from. They look at many of the product features(premiums holidays etc) and they think they are getting a lot of value from it.

They don't realise that for every additional feature they get from e insurer, they are indirectly paying for it. And the saddest thing is we can never do a like for like comparison as consumers...

 

[Shion]

Savings + protection. Back then i was not financial literate.

So why is there an argument over this plan in the other threads? Where do people find merit in this? Prudential eats a whooping 18% out of the investment (18.8k/108k) and people are still advocating this, discussing the merits of the plan?

At least your agent mentioned it is savings + protection.

The basis about the other threads is mainly due to the fact that agents told them (thread starters) this is "pure savings" which is not the case, and the thread starters felt "cheated, misled, uncomfortable and/or confused", so they come here and ask should cancel the policy or not.

I don't think anyone here is advocating savings plan. In fact, most of us avoid them.

I better not comment too much.

 

[Lewis.T]

This makes me even angrier zzz...
I think im gonna sign up as an agent after i quit my job. Cant beat the devil, join the devil



Savings + protection. Back then i was not financial literate.

So why is there an argument over this plan in the other threads? Where do people find merit in this? Prudential eats a whooping 18% out of the investment (18.8k/108k) and people are still advocating this, discussing the merits of the plan?

Why would it make you angrier? 2k+ over 6 years is much lesser than your initial assumption of 18k to your agent lol.

 

[mcylo]

Hello mcylo, PruCash Max Limited Pay works similarly to PruFlexicash, but the premium term is shorter than the maturity.

PruFlexicash has the same premium term and maturity (example premiums for 15 years, mature after 15 years.)

Hi Lewis,

Just flip thru my prudential policy.....its stated "Prucash" and not "Prucash Max".

And the policy premium year same as the surrender year, ie, cover end date is 2025.....ten years from now.

 

[Lewis.T]

Hi Lewis,

Just flip thru my prudential policy.....its stated "Prucash" and not "Prucash Max".

And the policy premium year same as the surrender year, ie, cover end date is 2025.....ten years from now.

Yours is a much older version then, but it works similarly to Pruflexicash where they allow you to withdraw 5% of the sum assured as cashback from the 3rd year onwards.

 

[Shion]

Dont bother taking out the cashback if you want a higher maturity value

 

[Shion]

Dont know why when introducing this product, need to emphasize so much on cashback.

Sound like as if clients are so "gian png" with the 5% cashback.

"Wow, so nice, put money in this product still can get 5% cashback yearly". Maturity value dropping already by then.

Had someone put in money in a bank, he can go to the ATM machine to press if he needs money urgently, rather than the need to request for a 5% cashback.

How many people actually request 5% cashback every single year like as if it is "free money" ?

 

[Lewis.T]

They don't, but they may want to use the accumulated cashback to fund their children's education, go for a holiday and whatnot, while just leaving to accumulate till they have solid plans for said uses.

 

[mcylo]

Dont bother taking out the cashback if you want a higher maturity value

I withdraw all the cash back and invested them in equity as i reckon it will make a better return then the 3% pru got to offer. Few years back it was 3.75, the reduce to 3.5%, then now 3%

Much as i dislike it....can only lan lan suck thumb. To be fair, manulife also reduced their interest rate for cash coupon

But the good thing abt this is it works like "force" savings to me.