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
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.