Need advice on Endowment Plan & Term..

[Surrealz]

I signed up for a Annual Cashback Endowment plan recently with Great Eastern...but starting to feel uncomfortable about it. Thinking if I should cancel it..any advice?

Sum assured: $25,000
Paying about: $280 a month
Maturity: 18 years, but will cover for 25 years
Coverage for death, terminal illness and presumptive total and permanent disability.
Brochure.

I also signed for Great Eastern Flexi Living Term Plan - up to 75 years old.

It covers Cover Death, Total and Permanent Disability (TPD), Terminal Illness and Critical Illness. Brochure.

Sum assured: $200,000.
Paying about: $70 per month.

Are these two plans overlapping or do they each serve their own purpose? Should I cancel the endowment plan?

 

[Shion]

They serve different purposes. And as usual, endowments are discouraged.

 

[akwl88]

Why are you feeling uncomfortable about it?

What is your purposes for getting these 2 plans?

Do you understand what you are buying?

Paying $350 a month for these 2, is it affordable for you?

 

[Darkzi0n]

endowment is a terrible plan for anyone who is financial savvy.

 

[Surrealz]

Why are you feeling uncomfortable about it?

What is your purposes for getting these 2 plans?

Do you understand what you are buying?

Paying $350 a month for these 2, is it affordable for you?

I can afford $350, but it's not about the money..

I was thinking 2% interest on the Endowment plan would be a good supplement/diversification to my other saving platforms..but now I'm not even so sure if the 2% is guaranteed or not, after looking at the chart. [Please correct me if I'm wrong on this]. My agent told me the '2%' annual return is 'guaranteed'.

Feeling uncomfortable because I feel that the Endowment might be unnecessary as I think about it more..and the non-guaranteed portion doesn't look good.

And of course, doesn't feel good to be 'cheated' by an agent.

And lastly, I cannot claim to say I fully understand the Endowment plan. Feels like another insurance trap to me.

 

[oceanicmanta]

there is nothing in the brochure that says 2% guaranteed, so it probably is not guaranteed.

ask agent to provide 2% guaranteed in writing.

after 18yrs, u wld have paid $64k in premiums, while the guaranteed portion is $42k. So this isnt even capital guaranteed.

endowments are like that ... mine too. took me 20yrs to realise.

endowments supposed to be saving for a future event, but if future projected values are not even certain, then what's the point ??

It's taking a risky bet & the "non guaranteed" returns arent that great ...

only guarantee is the huge comms agent is getting

 

[blurpandasg2014]

I can afford $350, but it's not about the money..

I was thinking 2% interest on the Endowment plan would be a good supplement/diversification to my other saving platforms..but now I'm not even so sure if the 2% is guaranteed or not, after looking at the chart. [Please correct me if I'm wrong on this]. My agent told me the '2%' annual return is 'guaranteed'.

Feeling uncomfortable because I feel that the Endowment might be unnecessary as I think about it more..and the non-guaranteed portion doesn't look good.

And of course, doesn't feel good to be 'cheated' by an agent.

And lastly, I cannot claim to say I fully understand the Endowment plan. Feels like another insurance trap to me.

The term can keep. Endowment its best to get those that guarantee u more than what u put in. Can consider Aviva, TM or Axa plan as they have plans with guaranteed on maturity more than total premium paid

 

[bibu00]

Right, now assuming you pay for the full 25 years
18x12x=$64357.2
Guarenteed if cashback isnt touched and reinvested
$42000
Total GUARENTEED profit = -$22357.2

Assuming their given scenerio of

Based on current interest rate of 3% p.a. for re-investment. This rate is not guaranteed and is subject to change without notice.

0.65% CAGR assuming u pay for 18 years but mature at 25 years.

Remember, there is absolutely no obligation to pay out the non guaranteed portion. You should record the agent and submit his name and any information of this misrepresentation you have to MAS asap.
You can potentially save another guy from falling into his scam.

SSB is yielding at 2.3x% this month.
make your own conclusion.

 

[oceanicmanta]

TS paying just 18yrs so CAGR would probably be lower than for 25yr premium period.

I could be wrong since FV for both payment options are the same as provided by insurer.

 

[bibu00]

MAS 504 is here if you need it
http://www.mas.gov.sg/regulations-a...ct-of-broking-staff-by-insurance-brokers.aspx

 

[bibu00]

TS paying just 18yrs so CAGR will be lower than for 25yr premium period.

oh! gonna edit my post. thanks!

 

[Shion]

Most importantly is whether can you beat the inflation in 25 years time

 

[oceanicmanta]

begs question why doesnt MAS require insurers to

1) make risk disclosure that such endowments are not capital guaranteed even if held to maturity, like what is required of other financial products

2) compute the EIR based on the projections

even simple FD have more explicit terms about early termination etc

for my Pru plans, in early years, they show the Projected Yield to Maturity in the annual statements but since 2008, after they cut the projected maturity values significantly, nothing is shown.

 

[Surrealz]

Thank you bibu00 for the break down.. ugh...yes should have thought of SSB before I signed for this...I don't know if I'm still within the window to cancel this plan..just signed it slightly more than a week ago..

Looks like this plan has almost no chance in beating the inflation rate. I think there's no chance of full pay-out anyway.

Thanks everyone else for your very insightful advice too.

This is not my first time meeting this kind of dishonest agent...very upset with how the industry is regulated here....so many idiots like me getting scammed everyday. or should I blame myself for not clarifying more zzzzz

 

[bibu00]

if u want to cancel. visit the whatever insurance company's main office and get it done. do not go back to your agent, if they delay you till your free look period is over, then theres no way you can get your money back.

 

[Darkzi0n]

Thank you bibu00 for the break down.. ugh...yes should have thought of SSB before I signed for this...I don't know if I'm still within the window to cancel this plan..just signed it slightly more than a week ago..

Looks like this plan has almost no chance in beating the inflation rate. I think there's no chance of full pay-out anyway.

Thanks everyone else for your very insightful advice too.

This is not my first time meeting this kind of dishonest agent...very upset with how the industry is regulated here....so many idiots like me getting scammed everyday. or should I blame myself for not clarifying more zzzzz

not the first time liao still kena... do urself and ur family a favor... be more financial savvy and dont rely on advisors who have clear incentives to mislead u.

 

[Surrealz]

not the first time liao still kena... do urself and ur family a favor... be more financial savvy and dont rely on advisors who have clear incentives to mislead u.

Trying to trust people again mah. Then end up all got hidden agenda can't trust any of them seriously.

 

[Shion]

Insurance agents are salesman, we are customers. Goods sold, risks transferred, transaction ends.

 

[Shion]

for my Pru plans, in early years, they show the Projected Yield to Maturity in the annual statements but since 2008, after they cut the projected maturity values significantly, nothing is shown.

I believe the par fund performance for the insurance compaines have not return back to pre-2008 figures. Only in 2012 they achieved double-digit % growth since 2008.

 

[akwl88]

Yup ts, you got your answer liao

Best cancel the endowment asap

Got 14 days free look period

Ssb is another alternative which ur agent failed to disclose

Rmb, agents are there to line their pockets, not help u grow your money

Get the insurance u need, not what the agent wants

Do not mix insurance with investment

Happy cny!