CPF chats

[yongsaver]

Anyway the guaranteed returns still looks good

Can share what plan is this ?

It would be informative to see the difference between a 2012 policy vs a 2020 policy.

 

[Kaypohji]

Yes I feel so too... probably the insurers have adjusted. So what is valid for 10 years ago is different from now

It would be informative to see the difference between a 2012 policy vs a 2020 policy.

 

[maple96]

The whole life that i have shown, is a multiplier WL policy. E.g. sum assured is $100k, but if something happens to me before that, my bene will get $250k. Hence it serves as a protection when I am young.

I am no expert in irr, so cannot comment.

What I know, thru reading, yours is WL with multiplier, multiplier is term means premium paid is down the drain. So u cannot expect to have my sort of returns, unless the insurer makes crazy profits and willing to share with u, etc

U need more "cashback" from the insurer to cover the term premium loss.

Alternative, u should deduct those term premiums since these are sunk costs, use a lower capital to compute your returns, then it will be more correct reflection of performance of your policy.

Then deduct those term premiums paid, to get net returns

 

[pcmdan]

I am no expert in irr, so cannot comment.

What I know, thru reading, yours is WL with multiplier, multiplier is term means premium paid is down the drain. So u cannot expect to have my sort of returns, unless the insurer makes crazy profits and willing to share with u, etc

U need more "cashback" from the insurer to cover the term premium loss.

Alternative, u should deduct those term premiums since these are sunk costs, use a lower capital to compute your returns, then it will be more correct reflection of performance of your policy.

Then deduct those term premiums paid, to get net returns

Not sure how to split between the term premiums out since i cant find it anywhere in the policy.

You meant bonus instead of "cashback"? Since i received yearly bonuses from the company

Shall go dig out my WL without multiplier later.

 

[yongsaver]

Not sure how to split between the term premiums out since i cant find it anywhere in the policy.

You meant bonus instead of "cashback"? Since i received yearly bonuses from the company

Shall go dig out my WL without multiplier later.

actually no need to complicate what is a very simple calculation.

for those who are not sure how to calculate IRR for your policy, can list out your policies here like pcmdan and people here can help u do so.

basically show your yearly premiums
any bonus rec and in which year
guaranteed surrender value

if u shy, just say "this not my policy, I am helping my third uncle check his policy."..

 

[hwmook]

Huh???? the IRR included that. Hence I am not sure why u said it was forgotten. Do you know how IRR formula works?

Only mistake was, i shouldnt have assume that the surrender values are realized gains yearly.

Work of advice, please go study it before making such comment.

Formula is just that, it mean nothing if you input wrong information. Your 7% PA is incorrect and that is exactly what it is. I have studied it and i do not need a formula to tell me that you are barely making 3% PA after 20 years of holding this policy.

 

[hwmook]

I am no expert in irr, so cannot comment.

What I know, thru reading, yours is WL with multiplier, multiplier is term means premium paid is down the drain. So u cannot expect to have my sort of returns, unless the insurer makes crazy profits and willing to share with u, etc

U need more "cashback" from the insurer to cover the term premium loss.

Alternative, u should deduct those term premiums since these are sunk costs, use a lower capital to compute your returns, then it will be more correct reflection of performance of your policy.

Then deduct those term premiums paid, to get net returns

Don't need to go through so much troubles, you just need to know the sum assured and you can estimate the cost of insurance. $100,000 sum assured is around $4-8 per month. The higher sum assured through "multiplier", the higher is the cost. Taking away the cost of insurance will increase the returns slightly.

 

[maple96]

actually no need to complicate what is a very simple calculation.

for those who are not sure how to calculate IRR for your policy, can list out your policies here like pcmdan and people here can help u do so.

basically show your yearly premiums
any bonus rec and in which year
guaranteed surrender value

if u shy, just say "this not my policy, I am helping my third uncle check his policy."..

But I am expert in using this calculator

https://www.calculator.net/interest-calculator.html

 

[yongsaver]

But I am expert in using this calculator

https://www.calculator.net/interest-calculator.html

actually this calculator also based on the same basic financial maths. its just they make it easier for people to input. if u understand the financial maths behind it, can easily create using Excel.

 

[Kaypohji]

Aiya actually the policy illustration will indicate the returns at certain age in the first few pages of the policy.

Different insurers pick different age. But it will shows like the return of the policy is xxx% if u surrender at xxx age if the par fund returns is xxx%.

I think just a summary that they pull out one age as example only.

I am looking at multiple current insurers now. Currently not as good as what they claim. Maybe theirs is really the old policy.

 

[maple96]

Aiya actually the policy illustration will indicate the returns at certain age in the first few pages of the policy.

Different insurers pick different age. But it will shows like the return of the policy is xxx% if u surrender at xxx age if the par fund returns is xxx%.

I think just a summary that they pull out one age as example only.

I am looking at multiple current insurers now. Currently not as good as what they claim. Maybe theirs is really the old policy.

Incorrect. Let me define some of different types of life insurance policies, that I know, for purpose of comparison, a simplified definition (idea stolen from a book):

1. Wholelife (tranditional) = protection + surrender values (participating funds)
2. Wholelife (limited pay) = wholelife with less premium payment years
3. Wholelife (multiplier) = wholelife + term
4. Term = protection
5. ILP = term + investment (your own funds/premium)

Can u see the difference between Wholelife (traditional) and ILP?

Wholelife gets surrender values because the premiums are put into the pool of funds owned by the insurer. The insurer needs to make sure their income and sources of funds (ie premiums received) are invested to provide returns to the company plus cushion any claims from the insured. With wholelife, the insurer promised to share some of their returns from the company's investment (ie par funds) with the customers who buy wholelife = surrender values.

I posted above to show that there are different types of wholelife policies.

U cannot expect the returns of the other WL to be better than #1.

So dun compare chicken and duck. What are u comparing?

Use those amts highlighted by yongsave, input into the calculator and see what u get, or use your own formula, dun rely on the info provided in the proposal, those % cannot be relied on, except from one insurer.

 

[yongsaver]

Aiya actually the policy illustration will indicate the returns at certain age in the first few pages of the policy.

Different insurers pick different age. But it will shows like the return of the policy is xxx% if u surrender at xxx age if the par fund returns is xxx%.

I think just a summary that they pull out one age as example only.

I am looking at multiple current insurers now. Currently not as good as what they claim. Maybe theirs is really the old policy.

yep. do share if u find a good one. earlier when i saw the 7% thingy...i was so excited i had been wrong about insurance for so many years! i wanted to contact pcmdan straight away and asked him to share his policy contact and probably dumped my life savings in. until u pointed out the CF thingy and brought everyone back to earth. but it was a good mental exercise on a hot but about to rain afternoon. thanks to pcmdan for sharing also.

 

[maple96]

yep. do share if u find a good one. earlier when i saw the 7% thingy...i was so excited i had been wrong about insurance for so many years! i wanted to contact pcmdan straight away and asked him to share his policy contact and probably dumped my life savings in. until u pointed out the CF thingy and brought everyone back to earth. but it was a good mental exercise on a hot but about to rain afternoon. thanks to pcmdan for sharing also.

mai joke lah, from what u posted earlier, my guess u are around 40+? not worth liao lah.

 

[yongsaver]

mai joke lah, from what u posted earlier, my guess u are around 40+? not worth liao lah.

yep me hitting 50 soon. old uncle here. u mean old uncle cannot joke?

 

[maple96]

yep me hitting 50 soon. old uncle here. u mean old uncle cannot joke?

my guess was right, I purposely give u discount

old uncle can joke, but this one

 

[yongsaver]

my guess was right, I purposely give u discount

old uncle can joke, but this one

no need guess la. me posted before i will be 55 in about 6 years time. thats why me VC into CPF account. me treat it like 3 years FD renew one time.

talking about VC into CPF, we have ventured far away from CPF topic liao with all these insurance talk. maybe peppermint need to create offshoot thread.

 

[maple96]

U put monies into CPF, govt take it to invest and give u a share of the profits.

Hearsay, they maybe make more than 6% but give u 2.5 to 4+1+!%.

Quite similar to WL (par funds), except more is guaranteed with CPF?

U are mandated to buy insurance with CPF Life, u lose more "premiums" if u choose standard/escalating when u die earlier than expected. U lose less with Basic CPF Life Plan.

With standard/escalating, u contribute more premiums, more for gov to invest so they can give u the payout until u die. The longer u live, the longer they will continue to pay u from the profits they make. But die early, your "premiums" paid are gone! It is very similar to Term Insurance, "premiums" down the drain but only when u die earlier than expected.

With Basic CPF Life Plan, money in RA also get invested, but u dun lose the 4%+1%+1% ("premiums") regardless of when u die. It is very similar to Wholelife + multiplier

With WL, u dun lose if u die anytime. I make profits if I survive till retirement, cashout the surrender values, enjoy life!

(this is CPF thread, so relate back to CPF vs Insurance)

I attempted to bring it back with this, but still strayed

 

[Kaypohji]

YES I’m looking at whole life with surrender values but it is limited premium term like what pcmdan has.

It is not as good as u all claim it to be.

Some guaranteed is even <1% and it is at 60 plus years old. Not some surrender values that is very premature.

Now times r different compared to 10,20 years ago. Don’t think new policies offer such returns now.

There are a number of agents lurking here. If they can show their whole life plan when surrendered can provide at least 2-3% GUARANTEED then I will confirm buy from them because I am shopping for one now.

I posted above to show that there are different types of wholelife policies.

U cannot expect the returns of the other WL to be better than #1.

So dun compare chicken and duck. What are u comparing?

Use those amts highlighted by yongsave, input into the calculator and see what u get, or use your own formula, dun rely on the info provided in the proposal, those % cannot be relied on, except from one insurer.

 

[maple96]

YES I’m looking at whole life with surrender values but it is limited premium term like what pcmdan has.

It is not as good as u all claim it to be.

Some guaranteed is even <1% and it is at 60 plus years old. Not some surrender values that is very premature.

Now times r different compared to 10,20 years ago. Don’t think new policies offer such returns now.

There are a number of agents lurking here. If they can show their whole life plan when surrendered can provide at least 2-3% GUARANTEED then I will confirm buy from them because I am shopping for one now.

Mine is pay till 85, u cannot expect a limited pay WL to be better than mine.

Mine is more than 20years, what I said is if your policy had run many years, u should be looking at the guaranteed surrender values to calculate and stop looking at BI which shows non guaranteed, be patient and wait.

If u are looking at a proposal (BI), u have to somewhat look at guaranteed+non guaranteed, at the lower projected returns to do some form of assessment. Once your policy run into many years, the non-guaranteed will be converted to guaranteed and shown in your guaranteed surrender value in your statement. So no need to look at BI anymore. That's what my insurer do.

U also have to look at the insurer's record of paying what they projected. There are a few insurers who usually pay what they project, so u know chances of getting what is in the BI is higher. Ok I share one, GE, I bought endowment plan 5+5 years, matured more than 3%, better than projected. In the 9th year, the returns were disappointing, but when I get my cheque, it jumped probably because of maturity bonus. The others u find out yourself.

So much I can share.

 

[peppermint7]

talking about VC into CPF, we have ventured far away from CPF topic liao with all these insurance talk. maybe peppermint need to create offshoot thread.

I have no issue with it turning into insurance topic. I actually wanted to change the title to "CPF cum Insurances" but I can't find anyway to change it. So long u guys and gals feel comfortable all is well

Or would u prefer a separate thread? Feel free to suggest