Things you should read before buying an endowment plan

akwl88

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comedian claim? alot of what he said are facts based on maths or backed by studies that spanned more than 25 years.

i am surprised that financial advisers like u is not aware of it. but then perhaps it could be bcos financial advisors onli need to pass some basic test to advice ppl about financial planning lol.

Please. They are not real financial advisers. Just sales agents. Full stop.
 

icyboiz

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Ok sure but returns aren't expected be good (>4% annualized), I mean it IS an insurance plan, right? Am I getting the best value for being covered?

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once again... we did say that although it gives guaranteed returns, the returns are not sky high... oh come on.. please read the posts before jumping in. but to answer you, it meant to be literally a savings plan naturally coverage are lower. like what other people have said, it will be better to get term+savings/insurance than to get those with everything lump together into one plan.
 

icyboiz

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Kindly indicate which plans? CAGR % how much?

$1 higher is also higher. After locking in your money for 10, 20 years.

dude, it's mean for safe and conservative people. why are we going round and round around. just move on man.

go check out great eastern and AXA both of them have such plans. as i say the returns are not high. omfg seriously can you guys read. to give a rough figure, if you put 10k per year 5 year 50k you can get up to 59k. ok full stop. stop going back again and move forward.
 

icyboiz

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guys, please read the whole thing before jumping in, so we can stop going round and round. ty.
 

havetheveryfun

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Ok sure but returns aren't expected be good (>4% annualized), I mean it IS an insurance plan, right? Am I getting the best value for being covered?

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I don't know whats the plan icyboiz is talking about but the one I was talking about only have a small amount of insurance portion and the returns are only 2.6% a year. nothing fantastic to shout about so it is quite believable that the returns are guaranteed.
 

Asphodeli

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once again... we did say that although it gives guaranteed returns, the returns are not sky high... oh come on.. please read the posts before jumping in. but to answer you, it meant to be literally a savings plan naturally coverage are lower. like what other people have said, it will be better to get term+savings/insurance than to get those with everything lump together into one plan.
Hmm ok. But still looks expensive from my POV...based on my PruFlexiCash 25 year plan at $300+ a month, that's $120+ a month at maturity for a coverage of $45.5k, assuming I get $53,400 (either as lump sum guaranteed, or yearly cash back) at maturity with $0 as non guaranteed portion (i.e. projected to be 0% return)

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icyboiz

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I don't know whats the plan icyboiz is talking about but the one I was talking about only have a small amount of insurance portion and the returns are only 2.6% a year. nothing fantastic to shout about so it is quite believable that the returns are guaranteed.

look at AXA early saver. that's one of them.

that's why i hve been saying, it's really to individual, returns are not sky high, but it's still better than fixed deposit, some are not risk taker nor have the knowledge to invest or to do anything it. i have been emphasizing alot of times that everyone have their own needs and preferences. but you guys keep trying to force your opinions on others, i'm not saying you, but some of the people here. those people that are conservative will choose such plans.

and really go ask those people that work at banks there are many customers that walk into the bank and ask for fixed d, simply they got no idea what to do with it and even you tell them the returns are low and you got a better method to get higher returns, once they hear there is risk they reject it. not everyone are looking to get sky high returns, as long as it's safe and they the returns they get are consider bonuses to them.
 

bibu00

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That's why this thread is here to educate why people should stop paying high fee endowment and Ilp to opt for lower fee options.
 

icyboiz

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Hmm ok. But still looks expensive from my POV...based on my PruFlexiCash 25 year plan at $300+ a month, that's $120+ a month at maturity for a coverage of $45.5k, assuming I get $53,400 (either as lump sum guaranteed, or yearly cash back) at maturity with $0 as non guaranteed portion (i.e. projected to be 0% return)

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those plans are different from the one that i'm talking about. , from what you're saying your plan seems like a whole life plan that gives protection. it's a totally different kind of plan from the one that we're talking abouut.

anyway, my cousin holds that plan as well, no offense to that company, but i personally felt that pruflexicash is not a good plan.
 
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bibu00

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There's a second video by the 2 great sages of investing.

Icyboiz, pls read up more. It will be good for you and your future client, and hopefully stop you from ruining more lifes.

I know 8/10 of people in money-mind are facepalming at your post. It's really cruel if I keep quiet. There are alot of hidden dragons here. Don't embarrass yourself further already.

Btw, just because you are a "financial advisor" "financial planner", does not mean that you are in the "finance sector".

Start anew by watching the 2 videos from opening post. The first one you think because he is a comedian so he is unreliable, that's fine. But the second one is 100% credible. So no qualm about it.

Then after that maybe can go next door to shiny things thread and start educating yourself from there.

"the video sucks because the presenter is a comedian" is super a weak reply. It's as good as telling people rowan Atkinson is a fraud when he went on top-gear because he is Mr. Bean and he isn't in the car industry.

The story about your relative, the HSBC link, the dubious news website. If I were you, these posts will disappear first thing tomorrow.

I know you are misguided and have alot of misconceptions.
But it's really not too late to start.
 

Asphodeli

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look at AXA early saver. that's one of them.

that's why i hve been saying, it's really to individual, returns are not sky high, but it's still better than fixed deposit, some are not risk taker nor have the knowledge to invest or to do anything it. i have been emphasizing alot of times that everyone have their own needs and preferences. but you guys keep trying to force your opinions on others, i'm not saying you, but some of the people here. those people that are conservative will choose such plans.

and really go ask those people that work at banks there are many customers that walk into the bank and ask for fixed d, simply they got no idea what to do with it and even you tell them the returns are low and you got a better method to get higher returns, once they hear there is risk they reject it. not everyone are looking to get sky high returns, as long as it's safe and they the returns they get are consider bonuses to them.
You're right on that. Especially the last part, got risk, immediately reject, LOL! Typical Singaporean mindset I suppose. Want rewards with no risks. Not a good sign for society...

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bibu00

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those plans are different from the one that i'm talking about. , your plan are whole life plan that gives protection. not exactly a savings plan. it's a totally different kind of plan from the one that we're talking abouut.

anyway, my cousin holds that plan as well, no offense to that company, but i personally felt that pruflexicash is not a good plan.

Did you just say pruflexicash is a whole life plan that gives protection? Oh my god.

I hope Lewis.t comes in to backup you. He is one of the more knowledgable agents around.
 

icyboiz

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There's a second video by the 2 great sages of investing.

Icyboiz, pls read up more. It will be good for you and your future client, and hopefully stop you from ruining more lifes.

I know 8/10 of people in money-mind are facepalming at your post. It's really cruel if I keep quiet. There are alot of hidden dragons here. Don't embarrass yourself further already.

Btw, just because you are a "financial advisor" "financial planner", does not mean that you are in the "finance sector".

Start anew by watching the 2 videos from opening post. The first one you think because he is a comedian so he is unreliable, that's fine. But the second one is 100% credible. So no qualm about it.

Then after that maybe can go next door to shiny things thread and start educating yourself from there.

"the video sucks because the presenter is a comedian" is super a weak reply. It's as good as telling people rowan Atkinson is a fraud when he went on top-gear because he is Mr. Bean and he isn't in the car industry.

The story about your relative, the HSBC link, the dubious news website. If I were you, these posts will disappear first thing tomorrow.

I know you are misguided and have alot of misconceptions.
But it's really not too late to start.

lol you need a mirror.
 

icyboiz

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Did you just say pruflexicash is a whole life plan that gives protection? Oh my god.

I hope Lewis.t comes in to backup you. He is one of the more knowledgable agents around.

i say from the way it describe SEEMS like it. im not saying im sure it is. either way, anything with high protection, cash portion sure drop, because cost of insurance higher. simple.

oh and to add on: main point is, it's different from the plan that gives guaranteed higher returns than wat you put in. so ya, look at context.

like what YOU, ME and the rest of us have said, it's always better to get term + savings or investment (be it ownself invest or whatever you do.
 
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Magickiller9

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look at AXA early saver. that's one of them.

that's why i hve been saying, it's really to individual, returns are not sky high, but it's still better than fixed deposit, some are not risk taker nor have the knowledge to invest or to do anything it. i have been emphasizing alot of times that everyone have their own needs and preferences. but you guys keep trying to force your opinions on others, i'm not saying you, but some of the people here. those people that are conservative will choose such plans.

and really go ask those people that work at banks there are many customers that walk into the bank and ask for fixed d, simply they got no idea what to do with it and even you tell them the returns are low and you got a better method to get higher returns, once they hear there is risk they reject it. not everyone are looking to get sky high returns, as long as it's safe and they the returns they get are consider bonuses to them.
Rather throw inside FD then feed insurance seller.
 

unhinged_loon

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The John Oliver video is full of lame jokes, but that's Umerika for you. The jokes made it painful to watch. At least Stephen Colbert can make some funny jokes (sometimes), along with Craig Ferguson.

Analysis of the video:
1. Save - good idea (doh!), but this requires discipline. The main problem is that most people do NOT have the discipline. Plans peddled (Grammar Nazi: not paddled) by insurance agents, on paper sounds good in forcing people to put money aside. The drawback is that such plans may a) involve hefty fees (matter has be flogged to hell and back and then back to hell), b) not guarantee returns and/or capital.

tl;dr: there has to be better ways to force people to save, other than using such plans.

Business idea: sell a service that is insanely cheap but forces funds deduction from the person to be channeled towards a retirement account. I believe such automated services are available in the US (but not in SG?).

2. Buy ETF. Yes and no. Investing in index involves risks, and IMO, no better or worse than the risks involved in annuities and endowments. The only difference is that fees are reduced (still present in ETF).

Before anyone claims otherwise,
a) Past performance is not indicative of future performance.
b) You CANNOT ASSUME that the ETF will give you a positive gain (or even maintain value of the fund) for a given time period.

For example, see the Japanese Nikkei and imagine what's it like if someone DCAed it since the early 1990s.

ETFs are not fool proof, and it requires people to have a basic working knowledge of the stock market. That's a tall order for people who can't even force themselves to save some money per month for retirement.

Come on, you SSI people should know that.

3. Fiduciaries are usually lawyers or accountants. Their services do not come cheap. If you are a HNWI and/or with a high salary, sure, you ought to get such services, especially for those who work in a country with an Byzantine tax code (eg. USA). For less mortals...

4. Bonds. Again, requires a working knowledge of the bond market. Same problem with investing in ETFs, will people bother to learn? (Hint: NO)

//----------------------------------------------------------------------

The video misses the point among many mortals: people either a) have a mental block on financial matters, or b) don't care enough to gain financial literacy and take control of their financial matters.

Fees suck, but people are suckers for them, even if some are actually aware of them.

Finally, remember human psychology:
1. People in general don't like responsibilities, they would abdicate them as much as possible.
2. People in general like the easy way out, especially if it means pushing the responsibility away.
3. Out of sight, out of mind.

//----------------------------------------------------------------------

Most people who do not care about investing should do the following:
1) Put money in CPF (I hate the option, but that's because I invest)
2) Put money in fixed deposits.
 
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fzhfzh

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This has been repeated over and over again already. As usual agents will come in to use keywords like "unregulated market" "not capital guaranteed" "risking your savings" "2007 financial crisis" "bear market" "-ve returns over past 2 years" "can go to zero anytime".

Very tiring one. What we need is one agent to come in to respond the John Oliver video is good enough already.

Updated first post with another good video. and some links to other blogs.

Still, no agent is able to come up with a valid argument to john oliver's video. Is there simply no way to talk until a white piece of paper become black?

It's pretty interesting how people choose to trust articles and other people than themselves. If you just look at the facts and try to understand, endowment plans simply does not make sense.

1. After 15 years, you are only guaranteed 77.8%, so you can lose a pretty big portion of your investment as well.
2. Even a market crash usually only drops S&P 500 index by maybe 10%, it will take a HUGE crash to drop by more than 22.2% and make it worse off. Even then, you can be patient and wait for rebound as market always do. SPY crashed from 130+ to 60+ in financial crisis, but now after 9 years it's already back up to 200+. 15 years is a lot of time to have your money stuck.
3. If S&P 500 goes to 0, you are going to have a MUCH bigger problem to content with than your lost investment. Actually, it means prudential/AIA went to 0 as well so you aren't getting back your money either.
 
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akwl88

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dude, it's mean for safe and conservative people. why are we going round and round around. just move on man.

go check out great eastern and AXA both of them have such plans. as i say the returns are not high. omfg seriously can you guys read. to give a rough figure, if you put 10k per year 5 year 50k you can get up to 59k. ok full stop. stop going back again and move forward.

Key word being 'up to'

Lmao. Whos the one gg back and forth?
 
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