Is there anything wrong with this plan?

[akwl88]

very useless plan

ts kenna chop carrot liao

better cut loss ba

 

[anfielder]

erm.. look at 3.25% projected.

at 25 years, you put in 60k in premiums, your guaranteed + non-guaranteed + investment is only 58k

Most insurance plans don't give you more than 3.25% actual returns.
Welcome to reality

Eh, that's not how to read it. You're double counting 'cos the Investment returns column is simply the sum of the two columns to the left of it.

The total of guaranteed + non-guaranteed after 25 years is actually only half the premiums paid, although this excludes the yearly coupon (total of $36,000) & the interest on that if you leave it with AIA.

 

[dolph001]

Eh, that's not how to read it. You're double counting 'cos the Investment returns column is simply the sum of the two columns to the left of it.

The total of guaranteed + non-guaranteed after 25 years is actually only half the premiums paid, although this excludes the yearly coupon (total of $36,000) & the interest on that if you leave it with AIA.

oh I just realised.
Thanks for pointing out

 

[diediex]

Found this AIA smart rewards saver plan online. Can anyone enlighten how to read this surrender table? Ie. How much can the person get back if he surrender at the end of Yr 2, 10 and 25? Guaranteed and non-guaranteed.

Note: Guaranteed coupon of 1500 is paid every yr from end of yr 2 onward

At year 10, if the person surrender this plan, will he gain guaranteed $7210 or loss guarantees $8240?

 

[akwl88]

At year 10, if the person surrender this plan, will he gain guaranteed $7210 or loss guarantees $8240?

guranteed $2,100 plus $1,500 x 10 = $17,100?

 

[diediex]

guranteed $2,100 plus $1,500 x 10 = $17,100?

shouldn't we do a summation from yr 1 to yr 10 on the 'guaranteed' column? Then add the sum with the 1500x9 coupon? (Coupon start on yr 2)

If the guaranteed for yr 10 is only 2100, it doesnt make any sense to me, because the person is losing more money the longer he held on?

 

[akwl88]

shouldn't we do a summation from yr 1 to yr 10 on the 'guaranteed' column? Then add the sum with the 1500x9 coupon? (Coupon start on yr 2)

If the guaranteed for yr 10 is only 2100, it doesnt make any sense to me, because the person is losing more money the longer he held on?

simi summation?

u mean add up the guranteed figures from yr 1 to yr 10?

i tot the guranteed figure is only respective to each year?

 

[diediex]

simi summation?

u mean add up the guranteed figures from yr 1 to yr 10?

i tot the guranteed figure is only respective to each year?

Initially, I also thought it is respective to each year, but when i crunch the numbers, the loss is getting bigger and bigger as the policy years increase.

At yr 10, if i add up thw guaranteed from yr 1 to yr 10, the person would have gained 7210, and if the guaranteed figure is only respective to each yr, the person would have loss 8420. And the loss is getting bigger and bigger until maturity where the person would lose 22 000 at yr 25.

 

[akwl88]

Initially, I also thought it is respective to each year, but when i crunch the numbers, the loss is getting bigger and bigger as the policy years increase.

At yr 10, if i add up thw guaranteed from yr 1 to yr 10, the person would have gained 7210, and if the guaranteed figure is only respective to each yr, the person would have loss 8420. And the loss is getting bigger and bigger until maturity where the person would lose 22 000 at yr 25.

ask ts to clarify ba

if ts ownself dont know, his agent chop his carrot shiok shiok

 

[dendii]

Maybe let me provide more clarity later.

But in general, for cashback policies, returns are usually not good.

I have yet to see any that is good from across insurers.

 

[dendii]

Basically, if you opt for the cashback option, you will receive a guaranteed $1,500 from end of year 2 onwards.

In total, you are guaranteed to take back $36,000, and a certain non-guaranteed amount.

So assuming start of year 2, there is nothing if you surrender. End of year 2 then you will get $1,500.

Year 10 you will get $1500 x the amount of years, + whatever is the non guaranteed then. Same goes for year 25.

All in all, returns for such plans is very low.

There is no such plan that guarantees 4.75% compounding. The agent has absolutely no idea what he/she is talking about.

 

[Jevonology]

It is not accurate to see the projected 3.25 and 4.75. It varies from different company and you can check the past yield for each and every company on their website to determine their stability.

As for endowment that provides cash back options will always have lower returns than those that do not provide. You have to choose between flexibility and returns.

 

[anfielder]

Initially, I also thought it is respective to each year, but when i crunch the numbers, the loss is getting bigger and bigger as the policy years increase.

At yr 10, if i add up thw guaranteed from yr 1 to yr 10, the person would have gained 7210, and if the guaranteed figure is only respective to each yr, the person would have loss 8420. And the loss is getting bigger and bigger until maturity where the person would lose 22 000 at yr 25.

There's no way you will gain just from the guaranteed figure. You should not do summation. But you can add the $1500 per year coupon to your calculations.

 

[Shion]

If you activate the cashback, it will reduce into your guaranteed sum I believe

 

[dendii]

If you choose the cashback option, your guaranteed amount is paid back to you in the form of the cashback over the years instead of the lump sum.

Whichever the case is, at the end of the maturity, even taking into account that the performance of the insurer is good, the actual return is not high.

If you activate the cashback, it will reduce into your guaranteed sum I believe

 

[Shion]

If you choose the cashback option, your guaranteed amount is paid back to you in the form of the cashback over the years instead of the lump sum.

Whichever the case is, at the end of the maturity, even taking into account that the performance of the insurer is good, the actual return is not high.

Definitely...So it is a poor product to get...

 

[anfielder]

If you activate the cashback, it will reduce into your guaranteed sum I believe

the benefit illustration for the aia plan it already assumes you take the cash back. That's why the guaranteed amount is ridiculously low.

 

[dendii]

In my opinion it makes no sense to get such a plan. At least i cant see any compelling reason right now except that it forces one to save and have the option of withdrawing for emergency......

The drawback is quite huge though since the guaranteed amount is way lesser than the premium so i would not say it is a good trade at all.

Definitely...So it is a poor product to get...

 

[dendii]

The guaranteed amount is still going to be low even if you dont take the cashback.

Same applies for all plans of such nature.

the benefit illustration for the aia plan it already assumes you take the cash back. That's why the guaranteed amount is ridiculously low.

 

[Shion]

the benefit illustration for the aia plan it already assumes you take the cash back. That's why the guaranteed amount is ridiculously low.

You referring to post #35 ? Same as Pru's benefit illustration.

They will show 2 separate ones, 1 is cashback all withdrawn, 1 is cashback all accumulated...

In my opinion it makes no sense to get such a plan. At least i cant see any compelling reason right now except that it forces one to save and have the option of withdrawing for emergency......

The drawback is quite huge though since the guaranteed amount is way lesser than the premium so i would not say it is a good trade at all.

Yeah