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Things you should read before buying an endowment plan

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Old 15-09-2018, 07:42 PM   #1036
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Calculation ok, though it's closer to 4.186% if maturity value = G+NG.

It' very attractive that the guaranteed amount is already giving almost 3.1%

My15 yrs endowment's annual premium was $3,872.50 for 14 years and the maturity amount was $72,053.54 yielding 3.72%. But the projected G+NG was supposed to be 5.77% (or $84,700) according to BI.
Is actually less then that. Not to forget G+NG pay out do not earned compounded interest and you cannot use them till Nov 2018. (End of plan).
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Old 15-09-2018, 08:17 PM   #1037
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in less than 2 months (on 9 Nov 2018), I will be able to know if AIA keep to their promise to my NG bonus portion. I am pretty confident they will. I guess those 'pure savings endowment policies' of yesteryears does provide a decent return.
Do update us by then
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Old 15-09-2018, 09:31 PM   #1038
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Do update us by then
Shall keep in mind.
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Old 15-09-2018, 09:35 PM   #1039
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Is actually less then that. Not to forget G+NG pay out do not earned compounded interest and you cannot use them till Nov 2018. (End of plan).
Wonder why you would keep talking about compounded interest when he already said XIRR = 4.17%... unless, you don't know what XIRR is?
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Old 15-09-2018, 11:03 PM   #1040
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What matters is the actual maturity amount against premium/s paid and the period of the policy. No use using projected numbers to calculate return or xirr.

It will be more meaningful if policy holders state such info against BI and let those interested in endowment to decide.

My 15 years endowment with annual premium of $3,872.50 for 14 years and the maturity amount was $72,053.54 yielding 3.72% against BI of 5.77%. I had another shorter endowment and also the maturity amount fell short of projection. One was from AIA and the other was from NTUC.
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Old 16-09-2018, 09:57 AM   #1041
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Anyway, it is now common knowledge that endowment policies will never give the kind of returns projected by the insurance companies in the policy document, so people can just disregard the projected non-guaranteed portion.

What matters is the actual maturity amount against premium/s paid and the period of the policy. No use using projected numbers to calculate return or xirr.

It will be more meaningful if policy holders state such info against BI and let those interested in endowment to decide.

My 15 years endowment with annual premium of $3,872.50 for 14 years and the maturity amount was $72,053.54 yielding 3.72% against BI of 5.77%. I had another shorter endowment and also the maturity amount fell short of projection. One was from AIA and the other was from NTUC.
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Old 16-09-2018, 05:14 PM   #1042
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The actual amount you get will still be closer to the G+NG amount than the G amount. With regulation bringing down the projections to be based on 4.75%, the amount projected by BI today will probably be more accurate than that from BIs from a decade or two ago.
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Old 16-09-2018, 05:16 PM   #1043
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Anyway, it is now common knowledge that endowment policies will never give the kind of returns projected by the insurance companies in the policy document, so people can just disregard the projected non-guaranteed portion.
You are right.
Always think if you put the same amount in say fix deposit and compounded interest. In the end of 20 years. You are notvtoo far from this kind of plan, but with flexibility of withdrawn at anytime.

There are also other fanicial products that are principle protect but interest pay out quarterly or every 6 months vs the complete sum been locked up for the next 20 years.

Ofcouse, if the objective is to get insurance protection. That's different story. But endowment plan usually only give you protection a few percent on top of your base amount.
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Old 16-09-2018, 05:21 PM   #1044
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The actual amount you get will still be closer to the G+NG amount than the G amount. With regulation bringing down the projections to be based on 4.75%, the amount projected by BI today will probably be more accurate than that from BIs from a decade or two ago.
The 4.75% is a artificially number given for computation. Ths is a requirement from MAS. The actual pay out is much less then this number.

Also keep in mind, even the say insurance company makes a nett profit of 4.75%. It does not means you get 4.75% in that year. The profit is distributed to varies product and endowment plan, structure payout been the lowest in the company. That's because these product is consider a low risk product.

High risk product always get a better pay out.
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Old 16-09-2018, 06:35 PM   #1045
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Yes, the projections are based on the PAR fund earning 4.75%, everyone knows that, you are not adding any new information into the discussion.

What is being said is that the actual amount you receive will be closer to the projected G+NG amount than the G amount, because the PAR fund performance over the long term is going to be a lot closer to 4.75%, that whatever is performance is that gives you only the G amount. Don't forget even if the PAR fund loses money, they will still have to pay you the G amount, assuming they are still solvent.
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Old 27-12-2018, 02:53 PM   #1046
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Shall keep in mind.
Bro...any good news from your policy? Is the NG portion good?
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