Endowment plan - keep or cancel ?

[Meemoosaa]

You look at the current year on the benefit illustration table for SURRENDER VALUE (not death benefits), see what is the guaranteed value + the non-guaranteed value under the 3.25% projection. Then u log on the online portal of your insurance company, the surrender value of the plan is usually indicated there. Don't be surprised if the difference is big, with your current surrender value way behind the projected value.

Oh wow. Thanks a lot ! Just checked, it is indeed behind ! The net surrender value on my portal is showing even less than JUST the "Guaranteed" portion on the table, let alone the combination of guaranteed value + non-guaranteed value. What does the meaning of guaranteed mean in this case ?

Now, what is considered "big difference" ? Is there a % to determine that and against what ?

Trying to read up what Net surrender value means now and how much cash can I receive if I were to surrender instead of terminating ...

 

[ctan84]

Oh wow. Thanks a lot ! Just checked, it is indeed behind ! The net surrender value on my portal is showing even less than JUST the "Guaranteed" portion on the table, let alone the combination of guaranteed value + non-guaranteed value. What does the meaning of guaranteed mean in this case ?

Now, what is considered "big difference" ? Is there a % to determine that and against what ?

Trying to read up what Net surrender value means now and how much cash can I receive if I were to surrender instead of terminating ...

Net surrender should be what you will get if you walk in on monday to surrender the policy loh.

 

[maumu]

to me, all these non-guaranteed component and stuff just smells like ILP to me and whether they say they are endowment or not is inconsequential.

like TS, gullible me when young (20+ years ago) bought under the sweet talk of those p* or A* agents and kena false sold promises of 3+ to 5+% p.a. gain but end up is 0.xx% p.a. 20+ years later.

all these agents and companies are just taking your hard earned savings to invest for themselves - you know, the luxury cars, the condos, those Rolex and Omega's.

I've learnt to stay far away from these vile agents.

 

[sohguanh]

to me, all these non-guaranteed component and stuff just smells like ILP to me and whether they say they are endowment or not is inconsequential.

like TS, gullible me when young (20+ years ago) bought under the sweet talk of those p* or A* agents and kena false sold promises of 3+ to 5+% p.a. gain but end up is 0.xx% p.a. 20+ years later.

all these agents and companies are just taking your hard earned savings to invest for themselves - you know, the luxury cars, the condos, those Rolex and Omega's.

I've learnt to stay far away from these vile agents.

You see there are those really pay if you kena and mostly low premium high payout belong to the category term insurance. But if you never kena then you lose monies and usually those term insurance never goes beyond say age 65 for obvious reason and they don't give you back your premiums paid.

What you and me kena when we young is we think if we never kena then lose all the premiums paid and hence ask agent got those plans if never kena mature can cash out get some interest on top of total premiums paid. This is when those life savings and endowment etc come in.

Then there was a movement where someone invent the phrase Buy Term Invest The Rest. Basically they say if wanna protect protect all the way and use the premium monies saved to invest to get higher returns.

To me I am neutral becuz what if you buy term insurance never kena and then that plan terminates at age 65? In contrast those life savings, endowment can go way beyond that. Of cuz the argument is before you reach age 65, your investment over your younger years will cover all after you go beyond say age 65.

Lastly now so many plans got no job after retrench can get monies, disabled cannot do something get monies etc etc. It is a big market on it's own.

 

[ctan84]

You see there are those really pay if you kena and mostly low premium high payout belong to the category term insurance. But if you never kena then you lose monies and usually those term insurance never goes beyond say age 65 for obvious reason and they don't give you back your premiums paid.

What you and me kena when we young is we think if we never kena then lose all the premiums paid and hence ask agent got those plans if never kena mature can cash out get some interest on top of total premiums paid. This is when those life savings and endowment etc come in.

Then there was a movement where someone invent the phrase Buy Term Invest The Rest. Basically they say if wanna protect protect all the way and use the premium monies saved to invest to get higher returns.

To me I am neutral becuz what if you buy term insurance never kena and then that plan terminates at age 65? In contrast those life savings, endowment can go way beyond that. Of cuz the argument is before you reach age 65, your investment over your younger years will cover all after you go beyond say age 65.

Lastly now so many plans got no job after retrench can get monies, disabled cannot do something get monies etc etc. It is a big market on it's own.

Basically uncle, what you are saying is endowment plans still have its place for certain profile of folks like those who really dun know, cannot, no discipline to invest lah.

 

[reddevil0728]

to me, all these non-guaranteed component and stuff just smells like ILP to me and whether they say they are endowment or not is inconsequential.

like TS, gullible me when young (20+ years ago) bought under the sweet talk of those p* or A* agents and kena false sold promises of 3+ to 5+% p.a. gain but end up is 0.xx% p.a. 20+ years later.

all these agents and companies are just taking your hard earned savings to invest for themselves - you know, the luxury cars, the condos, those Rolex and Omega's.

I've learnt to stay far away from these vile agents.

are there deceitful agents? for sure. but not all agents are automatically vile.

if like you say you are gullible and not able to fully understand the information laid out to you and easily succumb to sweet talk, does that mean the agent is immediately the problem? or is it one should also take individual responsibility rather than blaming it on others all the time?

 

[maumu]

are there deceitful agents? for sure. but not all agents are automatically vile.

if like you say you are gullible and not able to fully understand the information laid out to you and easily succumb to sweet talk, does that mean the agent is immediately the problem? or is it one should also take individual responsibility rather than blaming it on others all the time?

yah... i'm the stupid one... the problem is with me... happy?

just like scammed victims also stupid and gullible right? that we should blame ourselves for being so stupid to get scam hor?

sometimes you don't realise you like to make sweeping statements (e.g. "all the time") or insinuate certain propositions about others' words (did I say "ALL agents"? or "all THESE agents" pls go read again) which kinda make some people here dislike your posts. maybe you should tone down and don't jump into conclusions, especially when you don't have the full context. don't pretend to know what other people are going through and jump into 'correcting' others.

sometimes you can give useful points. other times your posts are just unhelpful, arrogant and unnecessary.

 

[reddevil0728]

yah... i'm the stupid one... the problem is with me... happy?

i didn't say that and that wasn't my intention. but if you want to acknowledge that yourself, it is your choice.

If you misunderstood my intention, let me try to be more direct, my intention is to say, sometimes it is important to self reflect, to understand and appreciate, if it is entirely someone else's fault or it takes two hands to clap.

just like scammed victims also stupid and gullible right? that we should blame ourselves for being so stupid to get scam hor?

Well, i am also not saying one should blame just oneself. but rather should one be entirely blameless?

If so, then there wouldn't be "Shared Responsibility Framework" that the government is coming up. but rather one sided responsibility of the FI.

so why is it not FI's fault alone?

sometimes you don't realise you like to make sweeping statements (e.g. "all the time") or insinuate certain propositions about others' words (did I say "ALL agents"? or "all THESE agents" pls go read again) which kinda make some people here dislike your posts. maybe you should tone down and don't jump into conclusions, especially when you don't have the full context. don't pretend to know what other people are going through and jump into 'correcting' others.

sometimes you can give useful points. other times your posts are just unhelpful, arrogant and unnecessary.

Thank you for your feedback, I will take that into consideration. Notwithstanding that, I think it is also important to consider what one wrote.

Maybe you should read what i wrote with regard to what you have written.

 

[sohguanh]

Basically uncle, what you are saying is endowment plans still have its place for certain profile of folks like those who really dun know, cannot, no discipline to invest lah.

Yes. When one is younger and then one is older the thinking mindset can be very different. Sometimes when older you want to U-Turn to younger times to re-choose your option is impossible liao.

Edit: for those who choose term insurance to earn is to kena else rugi.

 

[Meemoosaa]

to me, all these non-guaranteed component and stuff just smells like ILP to me and whether they say they are endowment or not is inconsequential.

like TS, gullible me when young (20+ years ago) bought under the sweet talk of those p* or A* agents and kena false sold promises of 3+ to 5+% p.a. gain but end up is 0.xx% p.a. 20+ years later.

all these agents and companies are just taking your hard earned savings to invest for themselves - you know, the luxury cars, the condos, those Rolex and Omega's.

I've learnt to stay far away from these vile agents.

I just take it as life experience. I don't think I've lost any money in terms of actual original sum perhaps more of the potential returns that those savings could have given me if I were to put them somewhere else but then it wasn't like I had some amazing wall street ideas of where to invest my money in at that age cos if I did, I wouldn't have thought the endowment plan was a great thing to begin with. So don't be too hard on yourself.

As we become more savvy with age and life exposure, we begin to see the weaknesses of the plan so now I'm just trying to learn how to get out with minimal damage. I was hardly exposed to investment and financial understanding until later in life. I'm quite grateful to this forum and all the regular posters helping everyone to improve their understanding about money and investment.

 

[Meemoosaa]

are there deceitful agents? for sure. but not all agents are automatically vile.

if like you say you are gullible and not able to fully understand the information laid out to you and easily succumb to sweet talk, does that mean the agent is immediately the problem? or is it one should also take individual responsibility rather than blaming it on others all the time?

In hindsight, I believed it wasn't so much of the sweet talk that people are persuaded by but rather we don't know what we don't know and the plan that was presented probably made sense at that time and space for the person

So it's just important to keep learning non-stop and make more savvy choices going forward.

I agree that not all agents are deceitful, I certainly didn't think mine was. They were just doing their job which is to sell and operating within all legal frameworks but because I didn't know what I didn't know at that point in time, it did seemed like a great idea for me as I had no idea other options exist.

This was until I started dabbling in SSB and DCA-ing on ETF a few years ago and that led me to start questioning the suitability of the endowment plans. Again, just having more life experiences and becoming a little more savvy has allowed me to ask better questions these days. Otherwise, I would still be happily paying endowment premiums.

 

[CrashWire]

To me I am neutral becuz what if you buy term insurance never kena and then that plan terminates at age 65? In contrast those life savings, endowment can go way beyond that. Of cuz the argument is before you reach age 65, your investment over your younger years will cover all after you go beyond say age 65.

The idea is that when people are older, their dependents are likely to have grown up and earned their own income also, so life insurance coverage won't be necessary.

The downside of having whole life or cash value is that the upfront premiums are also much higher.

Lastly now so many plans got no job after retrench can get monies, disabled cannot do something get monies etc etc. It is a big market on it's own.

The more complicated the plan, the more unnecessary costs there are. Your higher premium ends up becoming someone else's payout because of risk pooling.

 

[BBCWatcher]

The idea is that when people are older, their dependents are likely to have grown up and earned their own income also, so life insurance coverage won't be necessary.

Life insurance (insurance that pays survivors when the policyholder dies) helps protect dependents against the loss of the policyholder’s income from work when household wealth is insufficient to self-insure. (And conceivably against the loss of some other income tied to that person’s single life, such as life annuity income, although that’s much less common. Note that “income from work” could include non-market income in the form of home caregiving for dependents.) When the person has stopped working, then dies, death can be a good thing, financially speaking. It‘s certainly not an insurance necessity to pay for a policy that pays some benefit when the financial aspect of the event is beneficial (or at least neutral), not calamitous.

The downside of having whole life or cash value is that the upfront premiums are also much higher.

That also means your dependents get less protection per premium dollar, so it’s common for whole life insurance buyers to underinsure — for example, to skip Disability Income Insurance because their whole life insurance premiums are so high they can’t afford to insure against the even more catastrophic risks associated with disability.

A 30 year old (31 age next birthday) male nonsmoker can buy S$400,000 of term life insurance (with TPD) coverage, term to age 65, for S$256 per year (Etiqa). To buy when expecting a child, for example. It’s S$788 per year if you want to attach a Critical Illness accelerator rider. Premiums are guaranteed level, and you can stop paying for the policy any time you’re ready to self-insure. That’s a lot of protection for not much money. This sort of premium frees you to protect against other calamitous risks (DII!) and to save more in long-term investments to build wealth — wealth that’s also available for any genuine emergency, not just the claimable ones.

 

[sohguanh]

The idea is that when people are older, their dependents are likely to have grown up and earned their own income also, so life insurance coverage won't be necessary.

Some ppl thinking including me is say children grow up no need the payout if I kena. But if whole life I won't rugi as my premiums paid got returns not bad deal. The whole idea is if I don't kena can I get back my premiums paid with some interest. A different perspective compared to those on term insurance whose aim is hope to kena so can get huge payout based on low premiums paid. If don't kena rugi.