Advice needed for alternative to Endowment plan

[sarduakar2000]

Hi all,

Recently my agent recommended Pruwealth to me on basis of saving for my son education fund. However, my wife and I was uncomfortable with the fact that even for a limited pay period of 10 years. The plan will break even at the 13 year and only at the 20 then there will be considerable returns. I do my own investment currently. However he claimed that investment in equities would have risk. And when i cashed out, it may not be a good time if equities is not doing well. Any way i can replicate the effect of a endowment plan? My reworked plan is using POSB Invest Saver to invest 200 in STI Index, 200 in ABF Bond Fund and saving 100 in cash every month. Once it hits 500, then we planned to buy SSB. Is this plan more viable?

 

[Shion]

SSB is stable, but the ROI has been decreasing for each batch.

 

[henrylbh]

Hi all,

Recently my agent recommended Pruwealth to me on basis of saving for my son education fund. However, my wife and I was uncomfortable with the fact that even for a limited pay period of 10 years. The plan will break even at the 13 year and only at the 20 then there will be considerable returns. I do my own investment currently. However he claimed that investment in equities would have risk. And when i cashed out, it may not be a good time if equities is not doing well. Any way i can replicate the effect of a endowment plan? My reworked plan is using POSB Invest Saver to invest 200 in STI Index, 200 in ABF Bond Fund and saving 100 in cash every month. Once it hits 500, then we planned to buy SSB. Is this plan more viable?

Doesn't your agent knows that buying insurance is also a risk if the insurer goes under?

 

[Mecisteus]

Why not just make it simpler? $300 into STI ETF and $200 into ABF Bond Fund. Or change the allocation to your comfort level.

 

[sarduakar2000]

Doesn't your agent knows that buying insurance is also a risk if the insurer goes under?

Good question. And the SDIC only insure up to 50k only. But he was stressing that Prudential had a good track record and PAR funds have been returning around 5 percent PA.

 

[Mecisteus]

Good question. And the SDIC only insure up to 50k only. But he was stressing that Prudential had a good track record and PAR funds have been returning around 5 percent PA.

Cannot trust this agent. Better run far far away.

http://forums.hardwarezone.com.sg/money-mind-210/insurers-par-fund-cagr-fy2008-2015-a-5430385.html

If you really want to opt for an endowment plan, you probably want to check out plans from TM Asia.

 

[akwl88]

1) what is the total premiums you will pay?

2) how long is the policy?

3) what is the guranteed figures and non-guranteed figures assuming 3.25% and 4.75% par fund returns?

 

[sarduakar2000]

1) what is the total premiums you will pay?

2) how long is the policy?

3) what is the guranteed figures and non-guranteed figures assuming 3.25% and 4.75% par fund returns?

Total premium will be 120,000. Assuming 1k per month
It is limited pay for 10 years.
Cannot remember as they only show me on their Ipad

 

[gctmls]

Cannot trust this agent. Better run far far away.

http://forums.hardwarezone.com.sg/money-mind-210/insurers-par-fund-cagr-fy2008-2015-a-5430385.html

If you really want to opt for an endowment plan, you probably want to check out plans from TM Asia.

I second this, you should have a look at Tokio marine if endowment is what you are looking for. I have my reservations about pru.

 

[sarduakar2000]

Thanks guys for the advice. But i dun think i really want an endowment plan. Too long to break even.

 

[Shion]

Good question. And the SDIC only insure up to 50k only. But he was stressing that Prudential had a good track record and PAR funds have been returning around 5 percent PA.

Not true. If you want to check good track record, GE is doing the best among the others I believe.

 

[Darkzi0n]

Google investwizar why u sld not buy an endowment

 

[Darkzi0n]

Good question. And the SDIC only insure up to 50k only. But he was stressing that Prudential had a good track record and PAR funds have been returning around 5 percent PA.

Ask ur agent for the fund performance in black and white with company logo

 

[akwl88]

Total premium will be 120,000. Assuming 1k per month
It is limited pay for 10 years.
Cannot remember as they only show me on their Ipad

how much % returns do you want out of the endowment plan realistically?

limited pay but total how long before the policy matures? 25 years?

rmb, although you pay for 10 years, your money will be locked up for quite a long time as the insurer will use your money to invest to generate higher returns for themselves.

 

[sarduakar2000]

I was hoping that can achieve at least 4 %. But it is taking very long to even break even. 13 years to break even and on the 20 year then can expect to see more returns which is why I very reluctant to get such policy unless the terms are very attractive.

 

[xdemolicx]

I got a pruflexi before n cancelled it after 3 yrs after i started invesing on my own.

I think e whole reason for sumone to get endowment is for the death benefit that comes along. Thats why it will only make sense for ur kid since if anything happens to u.. The endowment will still run as it is without having to ctn saving.

E endowment didnt work for me since i can get better returns on my own... But i will probably still get 1 for my kid in future.

R there instruments that provides a much higher death benefit thn the amount i put in in the market??

I was hoping that can achieve at least 4 %. But it is taking very long to even break even. 13 years to break even and on the 20 year then can expect to see more returns which is why I very reluctant to get such policy unless the terms are very attractive.

 

[akwl88]

I was hoping that can achieve at least 4 %. But it is taking very long to even break even. 13 years to break even and on the 20 year then can expect to see more returns which is why I very reluctant to get such policy unless the terms are very attractive.

Return Rate (Discount Rate / CAGR) Calculator

Inputs
Present Value: $ 120,000
Future Value: $ 263,000
Years: 20

Results
Compound Annual Growth Rate: 4.00 %

are you able to get $263,000 guaranteed back, based on 4%?

 

[akwl88]

I got a pruflexi before n cancelled it after 3 yrs after i started invesing on my own.

I think e whole reason for sumone to get endowment is for the death benefit that comes along. Thats why it will only make sense for ur kid since if anything happens to u.. The endowment will still run as it is without having to ctn saving.

E endowment didnt work for me since i can get better returns on my own... But i will probably still get 1 for my kid in future.

R there instruments that provides a much higher death benefit thn the amount i put in in the market??

you can get term. high coverage for low premiums

use the savings from the low premiums to invest

http://singaporeanstocksinvestor.blogspot.sg/2014/09/term-life-insurance-why-buy-term-how.html

Get adequate insurance where it matters. Don't overpay for insurance and we do not need insurance for everything under the sun. Words of wisdom.

 

[sarduakar2000]

Return Rate (Discount Rate / CAGR) Calculator

Inputs
Present Value: $ 120,000
Future Value: $ 263,000
Years: 20

Results
Compound Annual Growth Rate: 4.00 %

are you able to get $263,000 guaranteed back, based on 4%?

Based on the BI dun think so. Maybe he is referring to the PIR fund able to return 5 % PA

 

[akwl88]

Based on the BI dun think so. Maybe he is referring to the PIR fund able to return 5 % PA

based on the 4% returns you want out of your total premiums paid

PAR fund return is not equal to your overall returns

PAR fund return pegged to non-guranteed returns