Endowment plans?

[BBCWatcher]

The simple fixed deposit-like endowment plans that occasionally pop up and that have reasonably attractive yields can be useful. One current example is China Taiping's 3 year i-Save single premium endowment plan. If you need a safe place to park Singapore dollar funds for 3 years -- in preparation for a major expense such as a down payment, wedding, or tuition bill -- then it's a rather good choice. I think China Life might also have something on offer right now, although it doesn't look as attractive.

 

[drowningfish101]

The simple fixed deposit-like endowment plans that occasionally pop up and that have reasonably attractive yields can be useful. One current example is China Taiping's 3 year i-Save single premium endowment plan. If you need a safe place to park Singapore dollar funds for 3 years -- in preparation for a major expense such as a down payment, wedding, or tuition bill -- then it's a rather good choice. I think China Life might also have something on offer right now, although it doesn't look as attractive.

ya i agree the China Taiping plan is quite good also. especially now that the interest rates are slashing, it's very important to stash your savings somewhere safe la. i found this article that is very helpful in summarising a few endowment plans both short term and long term

https://blog.policypal.com/insurance/what-should-you-do-when-banks-slash-their-interest-rates/

 

[Alearner]

Is it a bad year to invest in endowment plans given the insueres might not meet the projected interest?

i also noted insurers have been using 4+% interest as illustration for the past 10+years. is this 4+% by default for illustration?

 

[Value.Matrix]

Is it a bad year to invest in endowment plans given the insueres might not meet the projected interest?

i also noted insurers have been using 4+% interest as illustration for the past 10+years. is this 4+% by default for illustration?

4.75% illustrated is the par fund return consistently.

Your returns will be less than 4% due to distributiin cost. Look for the IRR instead, which is the actual projected interest you can expect.

 

[purpleberry]

Is it a bad year for endowment plans? Any banks or companies to recommend?

 

[boredboiboi]

Is it a bad year for endowment plans? Any banks or companies to recommend?

Endowment is meant for long term.

 

[purpleberry]

Endowment is meant for long term.

I know. Just with the current environment, is it better to wait a while longer? I think those policies who mature this year might not see much or any increment.

 

[boredboiboi]

I know. Just with the current environment, is it better to wait a while longer? I think those policies who mature this year might not see much or any increment.

Same thing, what if the endowment is for 20 years and same thing happen again in year 10?
And only aia axa and TM cut bonus for this year.

 

[xtwis7]

Based on historical performance, some of the better endowment plans have been the older plans purely because their projection was higher.

There are already works underway to adjust the 3.25-4.75% projections so it’ll be a matter of time before newer endowments are just not as attractive as current endowments.

I know. Just with the current environment, is it better to wait a while longer? I think those policies who mature this year might not see much or any increment.

 

[purpleberry]

Thanks for your replies. For endowment plans, any banks/insurance companies to recommend? Not sure if its wise to put most of your eggs in one basket. Maybe need to split into 2-3 plans?

 

[boredboiboi]

Thanks for your replies. For endowment plans, any banks/insurance companies to recommend? Not sure if its wise to put most of your eggs in one basket. Maybe need to split into 2-3 plans?

Its more of what kind of endowment u r looking at, there are alot if types in the market. Split into 2 or 3 is more of looking out for the sdic limit. Endowment are from insurance company.

 

[purpleberry]

Its more of what kind of endowment u r looking at, there are alot if types in the market. Split into 2 or 3 is more of looking out for the sdic limit. Endowment are from insurance company.

Looking at 10-25 years with flexibility of taking a portion in 10-15 years time. If not, I dont mind leaving it longer for retirement. Not so keen on fixed number of XX years.

 

[boredboiboi]

Looking at 10-25 years with flexibility of taking a portion in 10-15 years time. If not, I dont mind leaving it longer for retirement. Not so keen on fixed number of XX years.

There are a few. Such as Manulife readybuilder, aviva mysaving plan, ntuc gro gen saver. They have a guaranteed breakeven at year 15. The plan will last you for wholelife, need money can withdraw, or leave it to grow. This 3 plan is very similar but i am more toward manulife readybuilder due to the free interest policy loan which u can take and put back after that to grow. While the other 2 is take already and thats it.

Another type is Aviva MyLifeIncome. Can have income for as long as you live. Capital guaranteed upon income starts to payout.

 

[winthony]

Looking at 10-25 years with flexibility of taking a portion in 10-15 years time. If not, I dont mind leaving it longer for retirement. Not so keen on fixed number of XX years.

Normally when you fix the payment premium term, you are able to have the flexibility after the payment premium term! Longer plans would have an earlier guaranteed breakeven point, meaning you can take out everything you have put in.

IE: 25 years payment premium term, 25th year onwards you can have the flexibility to take out portion or full.

That being said, there is a couple in the market and normally what I do with my clients is to go through the unique features each company provides because end of the day, an endowment is very straightforward

 

[xtwis7]

What’s your reason that you may need a smaller sum of money at that point?

Looking at 10-25 years with flexibility of taking a portion in 10-15 years time. If not, I dont mind leaving it longer for retirement. Not so keen on fixed number of XX years.

 

[moejoseph]

Looking at 10-25 years with flexibility of taking a portion in 10-15 years time. If not, I dont mind leaving it longer for retirement. Not so keen on fixed number of XX years.

There's one that is fixed 15 or 20 years payout,but each year u can choose not to withdraw and have it accumulate till the next year. This earns additional interest at prevailing market rate as well.

 

[purpleberry]

There are a few. Such as Manulife readybuilder, aviva mysaving plan, ntuc gro gen saver. They have a guaranteed breakeven at year 15. The plan will last you for wholelife, need money can withdraw, or leave it to grow. This 3 plan is very similar but i am more toward manulife readybuilder due to the free interest policy loan which u can take and put back after that to grow. While the other 2 is take already and thats it.

Another type is Aviva MyLifeIncome. Can have income for as long as you live. Capital guaranteed upon income starts to payout.

Yes, I am more interested in the above. Only Manulife has this? Free interest policy loan means it needs to tie up with a bank?

Normally when you fix the payment premium term, you are able to have the flexibility after the payment premium term! Longer plans would have an earlier guaranteed breakeven point, meaning you can take out everything you have put in.

IE: 25 years payment premium term, 25th year onwards you can have the flexibility to take out portion or full.

That being said, there is a couple in the market and normally what I do with my clients is to go through the unique features each company provides because end of the day, an endowment is very straightforward

Yes, most off the shelf endowment plans are quite straightforward. 10, 15 or 20 years and that's it. Some offers yearly bonuses, partial take out, and ability to deposit more cash during the policy term. Maybe this comes at an expense of potential interest or overall benefits compared to the more straightforward plan.

What’s your reason that you may need a smaller sum of money at that point?

Kids' education

There's one that is fixed 15 or 20 years payout,but each year u can choose not to withdraw and have it accumulate till the next year. This earns additional interest at prevailing market rate as well.

Is this with a bank?

BTW, is it advisable to sign up with a bank knowing they are tying up their products with an insurance coy?

 

[boredboiboi]

Yes, I am more interested in the above. Only Manulife has this? Free interest policy loan means it needs to tie up with a bank?



Yes, most off the shelf endowment plans are quite straightforward. 10, 15 or 20 years and that's it. Some offers yearly bonuses, partial take out, and ability to deposit more cash during the policy term. Maybe this comes at an expense of potential interest or overall benefits compared to the more straightforward plan.



Kids' education



Is this with a bank?

BTW, is it advisable to sign up with a bank knowing they are tying up their products with an insurance coy?

When u take policy loan usually got interest charge. This plan allows u to take the money without interest and can return back or u can choose to totally withdraw. It has nothing to do with bank. Why do u keep mentioning about bank?

 

[purpleberry]

When u take policy loan usually got interest charge. This plan allows u to take the money without interest and can return back or u can choose to totally withdraw. It has nothing to do with bank. Why do u keep mentioning about bank?

First time I have heard about endowment plans is thru banks like DBS+Manulife, OCBC+Great Eastern and UOB+Prudential. Just thinking if they are offering isurance policies there, I am not sure if it is better to go straight to the insurance coy itself.

 

[TiedInsurer]

Based on historical performance, some of the better endowment plans have been the older plans purely because their projection was higher.

There are already works underway to adjust the 3.25-4.75% projections so it’ll be a matter of time before newer endowments are just not as attractive as current endowments.

Can elaborate more on this? Isn't the 3.25-4.75% projected returns mandated by the government? I.E has nothing to do with the historical performance, expert opinion etc?

Also, what kind of adjustment is underway?