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Things you should read before buying an endowment plan

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Old 31-10-2015, 02:51 PM   #46
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Getting a good agent who helps you work towards your aims is important. Not working towards his BMW or Europe holidays.

IMO if you're savvy to calculate your returns, you're savvy enough to find your own investments. Some people don't understand basic finance concepts like compounding.

Endowments are for those who don't know how to handle their money, and want a forced savings plan for the future eg children education, house DP, etc.
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Old 31-10-2015, 03:03 PM   #47
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Getting a good agent who helps you work towards your aims is important. Not working towards his BMW or Europe holidays.

IMO if you're savvy to calculate your returns, you're savvy enough to find your own investments. Some people don't understand basic finance concepts like compounding.

Endowments are for those who don't know how to handle their money, and want a forced savings plan for the future eg children education, house DP, etc.
Totally agree with your points. But Endowments plans doesnt help one true goal in the end. Too much gone into comms for agents, insurance companies etc. those who bought endowment, if you dont believe me, please open your T&C, and see the section on Effects of Deduction. After taking so much from you, what your guarantee returns is less than the premiums you paid.

Agents love to use this, part of it goes to protecting you. Lets face it, most likely, you would already have a term plan or Whole life plan to protect you, you dont need any nonsense like that anymore.
TO me, it is just a fake lie to take part of the premiums you paid blatantly for their own Profit. No one is able to guess whether your money will go up after 25 years, since consumer are blind to what they invest, and how much returns they achieve.

The day when your policy matures, the companies will tell u....

1) we are facing a poor economic time now, the returns suck. Hence what we will give you is what you have deposited (your $$ eaten away by inflation)

2) we are facing a very poor economic time now, the returns suck. Hence what we will give you is only the guarantee portion (congrats, after your money are stuck for 25 years, you are getting less than what you saved, worst off, you are much poorer than if your $$ had being place in a FD)

3) congrats you get more than what you have paid. 10% more what you have put in. E.g. after 25 years, your total premium paid is $240K. Insurance give you back $264K. you are happy and go back telling everyone how the company helped you made $24k. Your actualreturns after 25 years? 0.83%. Much worst than putting in a bank again.
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Old 31-10-2015, 03:07 PM   #48
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1. The death benefit is a joke. With the 18k over 15 years, I can buy the most basic aviva Saf and cover myself for ONE MILLION SGD. And even have some kopi money left!

2. A plan that is not capital guaranteed is not for savers. Even my Milo tin can do better.
A plan that has 20% fees is not for investors.

This plan is for only 1 group of people. The agents that sell them.

To pcmdan, as much as I would like to agree with you, I don't like people using speculative figures, the gpgt I posted above should show the amount the company is taking from the policy.
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Last edited by bibu00; 31-10-2015 at 03:11 PM..
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Old 31-10-2015, 03:07 PM   #49
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Word of advice to people out there,

Doesnt matter how insurance companies design their Endowment plan, ultimately the biggest winner is: the company, the biggest loser is: Yourself.


Dont buy an Endowment plan just because of the cash back, free tour, free gadgets etc. You are basically paying these freebies for yourself in installment at much higher price than their cost price.
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Old 31-10-2015, 09:10 PM   #50
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1. The death benefit is a joke. With the 18k over 15 years, I can buy the most basic aviva Saf and cover myself for ONE MILLION SGD. And even have some kopi money left!

2. A plan that is not capital guaranteed is not for savers. Even my Milo tin can do better.
A plan that has 20% fees is not for investors.

This plan is for only 1 group of people. The agents that sell them.

To pcmdan, as much as I would like to agree with you, I don't like people using speculative figures, the gpgt I posted above should show the amount the company is taking from the policy.
Take note...PruFlexiCash is more of savings + protection, that is why you see the death benefit is so much higher, which also means part of your premiums are for this protection portion.

I find the high protection part unnecessary, though...But that is how this product is designed...
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Old 31-10-2015, 09:37 PM   #51
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I suggest a guideline to who should be the targeted audience for saings plan

I believe those who cannot save will benefit more from such plans.
You really believe that? Most likely those who cannot save will sooner or later stop paying the premiums or cash out despite a loss.
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Old 31-10-2015, 09:52 PM   #52
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You really believe that? Most likely those who cannot save will sooner or later stop paying the premiums or cash out despite a loss.
On paper, it seems suitable. In reality, it depends.

Since products are sold based on theory rather than practical, why not ?
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Old 31-10-2015, 10:13 PM   #53
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You really believe that? Most likely those who cannot save will sooner or later stop paying the premiums or cash out despite a loss.
Me n my wife holding to prucash plan bot from different agents. Never intend to surrender unless something drastic happens to our lives. On highsight, i m glad to have purchase this in the early part of my working life when i m not as financially literate. But thats just me.

But if i can turn back the clock, well, i would have made other plans that provide better returns. I subscript to the idea of buy term invest the rest
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Old 31-10-2015, 10:33 PM   #54
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I had a 15y endowment policy with projected maturity amount of $84,700 which was about 5.85% pa return. On maturity I received only $72.053.54. But that time interest rates environment is not like these last few years. Even CPF OA was paying 3.48% and SA 4.73%.
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Old 31-10-2015, 11:31 PM   #55
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Take note...PruFlexiCash is more of savings + protection, that is why you see the death benefit is so much higher, which also means part of your premiums are for this protection portion.

I find the high protection part unnecessary, though...But that is how this product is designed...
Boss did you do your calculations?
Someone mentioned in the previous post that the $5150 from the distribution fees goes to my insurance part of the policy. That equates to $28.6 a month for a coverage of $45k from the first year to $74k at maturity.

With $28, i can get a $200k coverage with AVIVA SAF, which i am automatically enrolled.

Dont tell me that the full $5150 is not in the insurance part. Do not forget the fact that $18k from my policy goes to prudential for whatever reasons.

Discounting this $5150, prudential is taking a fee if $13k odds over 15 years.

Last edited by bibu00; 31-10-2015 at 11:49 PM..
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Old 31-10-2015, 11:32 PM   #56
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I had a 15y endowment policy with projected maturity amount of $84,700 which was about 5.85% pa return. On maturity I received only $72.053.54. But that time interest rates environment is not like these last few years. Even CPF OA was paying 3.48% and SA 4.73%.
Can you also quote your monthly premiums?

I have updated my findings in the opening post.

Last edited by bibu00; 01-11-2015 at 12:00 AM..
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Old 01-11-2015, 12:52 AM   #57
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Can you also quote your monthly premiums?

I have updated my findings in the opening post.
Annual premium paid 3,872.50 x 14 starting Feb 1997.
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Old 01-11-2015, 01:23 AM   #58
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Annual premium paid 3,872.50 x 14 starting Feb 1997.


2.8% per annual returns on investment.
5 digit figures spent on fees.
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Old 03-12-2015, 06:11 PM   #59
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I am looking into getting an education endowment plan for my kid, I feel that one of the attractiveness of such plans is that there is a guaranteed payout, which is more or less the same as the premiums paid. This would be helpful in a situation where the economy is bad and your ETFs (the common alternative to education endowments) have tanked and lose their value.

I suppose in a way it might make more sense to just dump the money into the CDA account and get at least 2% returns on it.

What do you guys think?
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Old 03-12-2015, 06:19 PM   #60
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I am looking into getting an education endowment plan for my kid, I feel that one of the attractiveness of such plans is that there is a guaranteed payout, which is more or less the same as the premiums paid. This would be helpful in a situation where the economy is bad and your ETFs (the common alternative to education endowments) have tanked and lose their value.

I suppose in a way it might make more sense to just dump the money into the CDA account and get at least 2% returns on it.

What do you guys think?
Like you say, the guaranteed portion is ONLY equals to the total premiums paid.

If you are that risk adverse, why not largely get SG government bonds that will expire around when your child is going for uni, then allocate a small portion to sti etf?
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