ID2 Plan - Keep or cancel?

[goloyok]

Hi,
Going through some mid life crisis now and want to revamp and take charge of my finances better.

I bought a savings plan (IDEAL from NTUC Income) through a financial advisor, saving $100 a month since April 2007, i.e. 11 years and 2 month now and $13,400 put in so far. The cash value is now $16,303.

1. Is it possible to calculate the average interest rate so I know how well is it "performing"? I am not sure if I did it correctly at all or what is the correct way to go around it. My guess is the yearly interest rate is about 3.5%?

2. Is this policy worth keeping based on the interest rate in the above?

3. The death benefit is $6000. Is this plan considered an ILP?

 

[JuniorLion]

1. Assuming interest rate is compounded yearly (not monthly), the returns are 3.4785%.

2. 3.4785% is decent - could you do better with your own investing? If you can, e.g. buy STI ETF or some other good Funds ( >= 5%) then you're better off canceling your plan. STI ETF is a bit on the high side right now, you can just hold off.

3. This is an ILP.

Hi,
Going through some mid life crisis now and want to revamp and take charge of my finances better.

I bought a savings plan (IDEAL from NTUC Income) through a financial advisor, saving $100 a month since April 2007, i.e. 11 years and 2 month now and $13,400 put in so far. The cash value is now $16,303.

1. Is it possible to calculate the average interest rate so I know how well is it "performing"? I am not sure if I did it correctly at all or what is the correct way to go around it. My guess is the yearly interest rate is about 3.5%?

2. Is this policy worth keeping based on the interest rate in the above?

3. The death benefit is $6000. Is this plan considered an ILP?

 

[tangent314]

You can easily calculate this using a Time Value of Money calculator. Set:

PV = $0
PMV = -$100
FV = 16303
Periods = 134 months

That should give you a rate of 3.43%, compounded monthly.

Insurance companies aren't actually allowed to sell pure investment plans, so they have to direct a minimum 1% of your premium towards the death benefit. Assuming it is 1% for you your interest rate is actually 3.6%

 

[goloyok]

Hi tangent314 and JuniorLion, thanks for the reply and answering my questions. I think its rates seems decent though I am tempted to surrender the policy and direct that premium to POSB Invest Saver instead. At least this ILP is at a profit.

I have another ILP from Manulife with a $250 premium which is at a lost but I think its due to its insurance coverage. I am trying to make some sense of it before before I start another thread asking for opinions. Thanks again.