Endowment Insurance Plan

[Hidetoshi]

Saving Insurance Plan

Hey,

I am interested in buying an saving insurance plan (insurance that you deposit money monthly and get interest... once reach maturity can take out and pay for children's fees etc).

Anyone know which insurance is the best and has the highest interest rate?

 

[kenneth27]

Endowment plan are a long term saving plan + Insurance.
The return are base on the company investment performance and how the economy trend.
Generally if the economy is uptrend, probably the return for the year will be higher. Typically return are between (+-) 2%-5%.

So, i doubt you will have a firm answer for the best insurance company and best plan. Put it this way, if there is a best insurance company and best plan, then there will be one and the only.

I would encourage a endowment plan over a IPL plan.

 

[Arsene_Wenger]

Personally i don prefer endowment plan.

Simply large portion of yr premium go to investment by insurance n yr coverage is very low.

And u hav to be aware of guarantee and non guarantee return as well.

If u r looking for insurance coverage then should opt for term insurance.

Or go for life insurance of 20 yrs which you can then opt to cancel e policy once reach maturity with premium paid over the years.

But hav to bear in mind that don expect high returns since you are buying coverages for yrself over the years which are not free.

 

[Hidetoshi]

thanks for all the replies..

 

[chopra]

Insurance =/= investment. Your topic sentence already shows you know close to nothing about insurance. No to NO OFFENCE. I want to be VERY direct here.


Endowment = ILP = insurance + variable investment = insurance + unit trust

Life = insurance + fixed investment = insurance + government and corporate bonds/bills

Term = insurance


If I were TS, i will buy Term insurance. Use the savings and open poems or fundsupermart and buy unit trust himself. The SAVINGS is HUGE. There are several threads around in MONEY MIND on why one should stop getting conned by insurance agents on paying unnecessary fees to buy ILP/Endowment.

Read up. =)

 

[jack81]

Insurance =/= investment. Your topic sentence already shows you know close to nothing about insurance. No to NO OFFENCE. I want to be VERY direct here.


Endowment = ILP = insurance + variable investment = insurance + unit trust


Read up. =)

No offence, I also want to be VERY direct here.

You should be the one doing some reading.

For starters, there is an guaranteed maturity sum for endowment plans WHICH ILPs do not have at all. So how can Endowment = ILP? This equation is totally wrong.

 

[PruCorgi]

Need to clear up some points here:

"Endowment = ILP"
ILP and endowments/savings plans are two different creatures.

"Personally i don prefer endowment plan.
Simply large portion of yr premium go to investment by insurance n yr coverage is very low."

First, this is not the same as an ILP where a lot of the premium goes to investment-linked funds.

Also, the companies have to do something in order to give you the returns on the endowment. And it's not putting the money into a fixed deposit or savings account.

However, unlike a typical investment where the premium/principal and returns are not guaranteed, the insurance companies will usually guarantee some of it.

Also, typically, investments will fluctuate in value and in returns. However, with endowments, the insurance company will also smooth out such fluctuations and you end up being "insulated" from a good bit of the investment risk.

 

[Shiny Things]

Hey,

I am interested in buying an saving insurance plan (insurance that you deposit money monthly and get interest... once reach maturity can take out and pay for children's fees etc).

Anyone know which insurance is the best and has the highest interest rate?

How old are your kids? If you've got more than ten years or so until they reach college, you'll almost certainly do better in the stock market than in an endowment plan.

 

[chopra]

No offence, I also want to be VERY direct here.

You should be the one doing some reading.

For starters, there is an guaranteed maturity sum for endowment plans WHICH ILPs do not have at all. So how can Endowment = ILP? This equation is totally wrong.

You sure you know what you are talking about? The guaranteed portion is essentially a hybrid of bonds/fixed deposits/equity, weightage is subjective -- according to the conned person's risk level.

 

[chopra]

Need to clear up some points here:

"Endowment = ILP"
ILP and endowments/savings plans are two different creatures.

"Personally i don prefer endowment plan.
Simply large portion of yr premium go to investment by insurance n yr coverage is very low."

First, this is not the same as an ILP where a lot of the premium goes to investment-linked funds.

Also, the companies have to do something in order to give you the returns on the endowment. And it's not putting the money into a fixed deposit or savings account.

However, unlike a typical investment where the premium/principal and returns are not guaranteed, the insurance companies will usually guarantee some of it.

Also, typically, investments will fluctuate in value and in returns. However, with endowments, the insurance company will also smooth out such fluctuations and you end up being "insulated" from a good bit of the investment risk.

Anyone mentioned it's in fixed deposit or savings account?

 

[jack81]

You sure you know what you are talking about? The guaranteed portion is essentially a hybrid of bonds/fixed deposits/equity, weightage is subjective -- according to the conned person's risk level.

Of course i know what I'm talking about.

Like you said, there is a guaranteed maturity sum for endowment. No matter what component or instruments its based on, its still a guaranteed maturity sum.

ILPs on the other hand offers no guaranteed maturity sum, so your equation of endowment=ILP is just like comparing apple to orange which are totally two different items.

 

[chopra]

Of course i know what I'm talking about.

Like you said, there is a guaranteed maturity sum for endowment. No matter what component or instruments its based on, its still a guaranteed maturity sum.

ILPs on the other hand offers no guaranteed maturity sum, so your equation of endowment=ILP is just like comparing apple to orange which are totally two different items.

My dear sir, you are half right.

Perhaps a better way to put it would be: Endowment is a SUBSET of ILP.

For people with low risk who are conned to buy ILP, they can always purchase funds like GREATLINK STABLE BOND FUND.

In any case, the focus of the argument here is NEVER about the product. It is about the multi-layered commissions that conned people would incur if they were to buy investment-linked/endowment/LIFE products. Pay commission to insurance agents, to their up-lines, to their administrators working on these paperwork, to the fund managers buying the funds.

Buy term invest the rest on your own. Period. My last post here.

 

[jack81]

My dear sir, you are half right.

Perhaps a better way to put it would be: Endowment is a SUBSET of ILP.

For people with low risk who are conned to buy ILP, they can always purchase funds like GREATLINK STABLE BOND FUND.

Sorry there is no half-right. And i'm not asking you to admit/declare/acknowledge i'm right.

I forgot my Venn diagrams so subset or not i cannot comment.

Again no offence. I just merely wanna make things more transparent with regards to endowment plans.

With regards to funds and ILPs, there are many available choices to the individual. I will just leave it there.

 

[Asure7]

Without adding to the argument (some of which are just technical / semantics), I try to make things simpler for TS.

If you are more risk-adverse, but want guaranteed returns like fixed deposit, look for an endowment plan with very high guaranteed return and ignore the non-guaranteed portion.
This works well if you are planning for kid's college funds. There are a few with the guaranteed portion higher, if not as high as, the amount of $ you put in, ignoring inflation of course. The cons is of course the long contractual period. Usually 15-20+ yrs.
For high guaranteed portion (which also mean low non-guaranteed portion), you may want to look at what Tokio Marine and hsbc offer.
From my experience, the more mainstream ones usually come with low guaranteed and high non-guaranteed, which makes the "total potential payout" v attractive.

Of course you potentially get much higher returns if u "buy term and invest the rest" in stock market etc. But this is not guaranteed. If you are not savvy enough, you may lose $. There is no guaranteed returns no matter what "past performance" indicates. Furthermore if you are not disciplined enough, it can become "buy term and spend all the rest".

 

[Arsene_Wenger]

Need to clear up some points here:

"Endowment = ILP"
ILP and endowments/savings plans are two different creatures.

"Personally i don prefer endowment plan.
Simply large portion of yr premium go to investment by insurance n yr coverage is very low."

First, this is not the same as an ILP where a lot of the premium goes to investment-linked funds.

Also, the companies have to do something in order to give you the returns on the endowment. And it's not putting the money into a fixed deposit or savings account.

However, unlike a typical investment where the premium/principal and returns are not guaranteed, the insurance companies will usually guarantee some of it.

Also, typically, investments will fluctuate in value and in returns. However, with endowments, the insurance company will also smooth out such fluctuations and you end up being "insulated" from a good bit of the investment risk.

Ya, you r right on endowment /=ILP and i have never quote it is the same but need to warn TS about the part of endowment went to investment by insurance coy.

And also on guarantee and non guarantee returns which agent usually paint a rosy picture.

He need to be also aware that endowment give lower coverage compare to term insurance if using same premium thus i have raised that up to him.

fyi, im not an agent and i have an endowment plan

 

[GE_ric]

Haiyah... Everyone is in the same field here to help people with their life finances one way or another. Endowments are by no means the best savings tool, but their existence certainly helps a person save and have a better edge over normal bank fixed savings accounts.

The idea of buy term invest the rest is very valid, since investment seems very much the way to keep your money ahead of inflation. But really, I'm not sure just how easy it would be for most people, while some may not be comfortable with investment itself.

So the savvy and confident, BTITR away. Leave the endowments to the rest who may benefit from it better, in the end it will work out so long as one is comfortable with his/her decision.

Cheers you good people!

 

[Saj.Mahal]

Haiyah... Everyone is in the same field here to help people with their life finances one way or another. Endowments are by no means the best savings tool, but their existence certainly helps a person save and have a better edge over normal bank fixed savings accounts.

The idea of buy term invest the rest is very valid, since investment seems very much the way to keep your money ahead of inflation. But really, I'm not sure just how easy it would be for most people, while some may not be comfortable with investment itself.

So the savvy and confident, BTITR away. Leave the endowments to the rest who may benefit from it better, in the end it will work out so long as one is comfortable with his/her decision.

Cheers you good people!

Agreed!

Anyway, I don't know why this post turned from a simple request to a mini debate and over-emphasis on specific words.

TS just wants a hassle free simple savings plan. Yes he/she used the word insurance, but no, you and I both know that is not what he/she cares much about. Focus is on savings and maturity value for his/her child's education. Insurance coverage component is just a bonus to TS I believe..

So, if you all wanna contribute to the TS, then no need to go so off topic la!

 

[matchy]

You sure you know what you are talking about? The guaranteed portion is essentially a hybrid of bonds/fixed deposits/equity, weightage is subjective -- according to the conned person's risk level.

why u never report to police?

 

[MaoZeDuo]

why ppl keep saying these products are used to con ppl leh?

yes of cos the best way to increase ur wealth is via investments by urself. but not all are savvy ma. thats why these products exist for those who do not have the time and knowledge.

if dont trust agents or the insurance company, still got MAS ma.



In this case i think for TS, is to have a disciplined savings program to finance for e.g. education for his kids. In return for that long term discipline, the insurance company reward him with better returns as compared to saving money in the bank. Nothing to do with conning here.

 

[scantec]

Without adding to the argument (some of which are just technical / semantics), I try to make things simpler for TS.

If you are more risk-adverse, but want guaranteed returns like fixed deposit, look for an endowment plan with very high guaranteed return and ignore the non-guaranteed portion.
This works well if you are planning for kid's college funds. There are a few with the guaranteed portion higher, if not as high as, the amount of $ you put in, ignoring inflation of course. The cons is of course the long contractual period. Usually 15-20+ yrs.
For high guaranteed portion (which also mean low non-guaranteed portion), you may want to look at what Tokio Marine and hsbc offer.
From my experience, the more mainstream ones usually come with low guaranteed and high non-guaranteed, which makes the "total potential payout" v attractive.

Of course you potentially get much higher returns if u "buy term and invest the rest" in stock market etc. But this is not guaranteed. If you are not savvy enough, you may lose $. There is no guaranteed returns no matter what "past performance" indicates. Furthermore if you are not disciplined enough, it can become "buy term and spend all the rest".

Your explanation is very simple but clear.
I am keen in the Tokio Marine & HSBC. Any agent to recommend anyone?