Things you should read before buying an endowment plan

BananaMilkShake

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are there other benefits illustrated? health/ci/life?

AIA tends to be slightly higher for it's branding

Only death benefits as shown below. Only death benefit and surrender.

DhwabxP.png
 

Shion

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Hi all, recently I was pressed by my friend, who is an agent to signup this AIA Smart wealth builder endowment plan. Payment is for 20 years and only breakeven on the 19th year. But after 20 years, able to withdraw or leave it inside and compound.
He said that it would be beneficial to me for retirement funds, or whenever I need to withdraw to get housing/children funds.

Illustration is as below
pgWzrqN.png


I heard that the operating expenses of AIA are quite high and the returns may not be as good as other companies. Am I getting eaten by him here?
If so, any other companies to recommend for retirement?

Thanks in advance

My question is more on why is your friend pressurizing you to commit into something which I feel you are not so comfortable with.

You can take a look at the table of deductions
 
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boredboiboi

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Hi all, recently I was pressed by my friend, who is an agent to signup this AIA Smart wealth builder endowment plan. Payment is for 20 years and only breakeven on the 19th year. But after 20 years, able to withdraw or leave it inside and compound.
He said that it would be beneficial to me for retirement funds, or whenever I need to withdraw to get housing/children funds.

Illustration is as below
pgWzrqN.png


I heard that the operating expenses of AIA are quite high and the returns may not be as good as other companies. Am I getting eaten by him here?
If so, any other companies to recommend for retirement?

Thanks in advance

Go for a pure retirement plan which is meant for retirement. If you are looking for something similar, which a few other companies has guaranteed breakeven at year 15.
 

zzzzzz87

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Yup I agree aia takes very long to break even when I was doing some math earlier for my own children and retirement too. I remember having some plans can break even at year 13 and some at year 15 by the guaranteed value.
 

BananaMilkShake

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My question is more on why is your friend pressurizing you to commit into something which I feel you are not so comfortable with.

You can take a look at the table of deductions

Not really knowledgeable on this table but I posted it.
AdBgF0c.png


Before that, I took a life policy from him, which I feel is more of a 'need' and also to "support" him as his first customer, while this endowment plan is more of a 'want'. He kept on preaching that I could do withdrawal for my children in the future, but come to think of it, I still have to wait out 20years before doing anything.


Go for a pure retirement plan which is meant for retirement. If you are looking for something similar, which a few other companies has guaranteed breakeven at year 15.
Im sure there are companies with breakeven at yr 15. Just that during this ** period, I do not have the chance to look around.
 

proton_cannon

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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.



Is endowment the same as Whole life plan? For example I am on a limited pay plan that provide cover to age 99. Is it ok to carry on this type of insurance?
 

pokkajas

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Is endowment the same as Whole life plan? For example I am on a limited pay plan that provide cover to age 99. Is it ok to carry on this type of insurance?

i think endowment is more for savings while whole life wider coverage? should ask a fa for advice
 

boredboiboi

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Is endowment the same as Whole life plan? For example I am on a limited pay plan that provide cover to age 99. Is it ok to carry on this type of insurance?

Endowment and wholelife plan is 2 different plans. 1 is meant for saving and another for protection but with cash value.
 

TiedInsurer

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Before that, I took a life policy from him, which I feel is more of a 'need' and also to "support" him as his first customer, while this endowment plan is more of a 'want'. He kept on preaching that I could do withdrawal for my children in the future, but come to think of it, I still have to wait out 20years before doing anything.

A "want" for who? Seems like the only person who "wants" this is your "friend" lmao. You know why? Because he gets 50% of the premiums for the first few years. Don't do it man. Endowment plans is one of the worst ways to save. Put your money into a high interest savings bank account if you wanna save.
 

new-comer

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Firstly, you need to ask if you really need an endowment plan. Or rather, why do you want an endowment plan (since you mentioned it in your post)?

Have you thought of getting an endowment plan prior to this, or you are asking about this plan because you are pressed by your friend and you want to help/support him?

Looking at your plan, you breakeven year is actually at year 15 (premiums paid $54000, guaranteed surrender value $54468). Anyway, assuming you keep your plan till year 20, premiums paid of $72000 with surrender value @ 3.25% $86498 and @ 4.75% $101654.

The actual annualized return rate is only 1.89% and 3.48% after 20 years. Are you ok with locking your money for a period as long as a generation's time and achieve this returns?

Like the other member mentioned, there are other plans with breakeven at 15 years, there are also some with breakeven at 5 years as well (however, premiums will be way higher). If you really need an endowment plan for any reasons, it is best to look around and compare plans from various insurers first before committing into something like this, which I fear you might do so because the other party is your friend.

Fyi, there are plenty of insurance agents out there who are not coping well because of COVID-19 and circuit breaker measures. Personally I also receive calls from my friends asking if I can help them. Do be careful on whether are these people really trying to help you or they are helping themselves only by pushing plans with the highest commissions (which are, ILPs and endowments).

Btw, do note that AIA premiums are towards the higher end and I do recall they are one of the first few in the market to cut bonus/maturity value very often when required. You can expect the returns to reduce in the next 20 years and beyond if there is any economic crisis.

Hi all, recently I was pressed by my friend, who is an agent to signup this AIA Smart wealth builder endowment plan. Payment is for 20 years and only breakeven on the 19th year. But after 20 years, able to withdraw or leave it inside and compound.
He said that it would be beneficial to me for retirement funds, or whenever I need to withdraw to get housing/children funds.

Illustration is as below
pgWzrqN.png


I heard that the operating expenses of AIA are quite high and the returns may not be as good as other companies. Am I getting eaten by him here?
If so, any other companies to recommend for retirement?

Thanks in advance

Before that, I took a life policy from him, which I feel is more of a 'need' and also to "support" him as his first customer, while this endowment plan is more of a 'want'. He kept on preaching that I could do withdrawal for my children in the future, but come to think of it, I still have to wait out 20years before doing anything.

Im sure there are companies with breakeven at yr 15. Just that during this ** period, I do not have the chance to look around.
 

pokkajas

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Firstly, you need to ask if you really need an endowment plan. Or rather, why do you want an endowment plan (since you mentioned it in your post)?

Have you thought of getting an endowment plan prior to this, or you are asking about this plan because you are pressed by your friend and you want to help/support him?

Looking at your plan, you breakeven year is actually at year 15 (premiums paid $54000, guaranteed surrender value $54468). Anyway, assuming you keep your plan till year 20, premiums paid of $72000 with surrender value @ 3.25% $86498 and @ 4.75% $101654.

The actual annualized return rate is only 1.89% and 3.48% after 20 years. Are you ok with locking your money for a period as long as a generation's time and achieve this returns?

Like the other member mentioned, there are other plans with breakeven at 15 years, there are also some with breakeven at 5 years as well (however, premiums will be way higher). If you really need an endowment plan for any reasons, it is best to look around and compare plans from various insurers first before committing into something like this, which I fear you might do so because the other party is your friend.

Fyi, there are plenty of insurance agents out there who are not coping well because of COVID-19 and circuit breaker measures. Personally I also receive calls from my friends asking if I can help them. Do be careful on whether are these people really trying to help you or they are helping themselves only by pushing plans with the highest commissions (which are, ILPs and endowments).

Btw, do note that AIA premiums are towards the higher end and I do recall they are one of the first few in the market to cut bonus/maturity value very often when required. You can expect the returns to reduce in the next 20 years and beyond if there is any economic crisis.

hey thanks for the detailed breakdown! appreciate it
 

dantom04

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What’s the projected return towards the end of the 10-year period.

I am holding this policy. Payable for 5-year and hold for another 5 years.

Projected return at 3% investment return will get me around $44k.. but with this covid19 ongoing... will I get less??
 

SBC

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Projected return at 3% investment return will get me around $44k.. but with this covid19 ongoing... will I get less??

I have seen my recent IB, it’s slightly higher than the initial projected IB.
 

amazingneil

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I think it depends on what kind of endowment plan you sign up for. Some endowment plans have a fixed interest rate for the number of years you invest in. While others its fixed for the first few years before it being according to market rate for the remaining years
 

creamyummy

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Hi I bought a pruactive saver

seems after reading some posts.. endowment policies in general are quite bad

I am a noob and i am still confused over certain things... and i hope any people here can advice me... unfortunately i am new in HWZ and thus i cannot paste a image.

here are my queries:
1.) it says: at 3.25% p.a, your illustrated yield at maturity is 1.10% p.a
I dun understand this sentence... what does it means? can someone give me a good analogy or example?

2.) does anyone have any lobang to sell off my endowment policies so that i can recoup some loss
 

streetfighter

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1. Doesn't make sense to me, but endowment sure won't pay you 3.25% pa now. 1.10% is probably guaranteed rate?

2. Doubt you can for endowment.

Hi I bought a pruactive saver

seems after reading some posts.. endowment policies in general are quite bad

I am a noob and i am still confused over certain things... and i hope any people here can advice me... unfortunately i am new in HWZ and thus i cannot paste a image.

here are my queries:
1.) it says: at 3.25% p.a, your illustrated yield at maturity is 1.10% p.a
I dun understand this sentence... what does it means? can someone give me a good analogy or example?

2.) does anyone have any lobang to sell off my endowment policies so that i can recoup some loss
 
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