PremierLife Generation III

[havetheveryfun]

recently i have been introduced to this plan. something wasn’t discussed in this thread is the leverage part. e.g. 200k cash & 500k loan from bank. so on 49th month, the interest is pegged to 700k. there are financing cost etc. but all in, it works out to be quite feasible, esp looking at the low interest rate sign up now. i was told by rm, 49th month onwards, i should be getting around 6-8% per year. which is quite attractive.

the downside is, i need to lock in my sum for 10-12 years minimum. the upside is..minimum risk (?), lifetime monthly payout & some insurance coverage.

any bros familiar w this plan? any risk? any other downside? thanks.

Keyword is "should be getting". The agent said u should be getting 6-8%a year, but is it written black and white in the plan?

 

[boredboiboi]

Keyword is "should be getting". The agent said u should be getting 6-8%a year, but is it written black and white in the plan?

Because it consist of the guaranteed and non guaranteed plus the interest rate is floating. Thus “should be”.

 

[LoanGroan]

recently i have been introduced to this plan. something wasn’t discussed in this thread is the leverage part. e.g. 200k cash & 500k loan from bank. so on 49th month, the interest is pegged to 700k. there are financing cost etc. but all in, it works out to be quite feasible, esp looking at the low interest rate sign up now. i was told by rm, 49th month onwards, i should be getting around 6-8% per year. which is quite attractive.

the downside is, i need to lock in my sum for 10-12 years minimum. the upside is..minimum risk (?), lifetime monthly payout & some insurance coverage.

any bros familiar w this plan? any risk? any other downside? thanks.

Ultimately you are borrowing from the bank a large sum of money at a floating rate to invest in bonds with fixed/predictable returns. With the added guarantee of your money back if you die or if you do not die, at least 10 years before you can get your capital back if their investment fund does well earning 4.75% every year.

Because of high expense fees and commissions paid to agents, most people will say that such plans are a shitty deal. In general, that's probably the case, but the low interest rate environment makes it slightly more interesting as your accumulation phase hopefully lines up with 4 consecutive years of low interest rates. Which means less total capital put in and if you're a conservative investor, less opportunity cost.

Regardless of how good/bad a deal it is, it boils down to your own personal situation, current and future loan obligations and what you intend to do with the 200k if you do not get this plan. There are defenitely worse ways and better ways to use your money. Please do your own due diligence and do not get pressurized by the agent. There are sign up bonuses every month of the year.

 

[ashcrow]

Rate of return will depend on the interest spread that you're charged.

Hopefully rates will continue to remain low for the coming years till you reach the payout.

From what I know, buying from the bank will have a significantly lower spread then buying from an agent. Heard of complaints from people who found out after purchasing from agent. DYODD.

thanks. but i thought this is exclusive to ocbc. are there private agents that can handle the plan? if there’s any agent recommendation, can pm me. i wouldn’t mind comparing the rates.

Downside is if the interest rate go higher than return. If u not gonna touch the capital, then leave it and collect as long as u live.
Look at it as a form of passive income for life.
There are another plan in the market that starts paying at 37th month and income is about the same. U can look at manulife signature income 2.

yes. if the cost of financing increases..it will eats into my passive income. but looking at past 5yr trend, it does seems feasible. moreover, due to the covid and market situation now, the sign on interest is at lowest.

and yes, i intend to just leave it in bank to generate passive income. cfm better than savings account interest. will look at manulife! thanks

 

[ashcrow]

Ultimately you are borrowing from the bank a large sum of money at a floating rate to invest in bonds with fixed/predictable returns. With the added guarantee of your money back if you die or if you do not die, at least 10 years before you can get your capital back if their investment fund does well earning 4.75% every year.

Because of high expense fees and commissions paid to agents, most people will say that such plans are a shitty deal. In general, that's probably the case, but the low interest rate environment makes it slightly more interesting as your accumulation phase hopefully lines up with 4 consecutive years of low interest rates. Which means less total capital put in and if you're a conservative investor, less opportunity cost.

Regardless of how good/bad a deal it is, it boils down to your own personal situation, current and future loan obligations and what you intend to do with the 200k if you do not get this plan. There are defenitely worse ways and better ways to use your money. Please do your own due diligence and do not get pressurized by the agent. There are sign up bonuses every month of the year.

thanks for the write up. yes, i am a conservative investor. this does look like a plan for my appetite. i am intrigued by the lifetime monthly payouts from 49th month onwards, and even at 6%, it’s still decent considering the low risk. i intend to just park the sum in the bank, and i calculate it takes est. 15yrs to break even.

i understand the cost of financing is pegged to sibor rate. think i better ask about the rates for pre-covid to understand better...assuming 4yrs down the road..the interest bounce back pre-covid.

 

[chrisloh65]

I was offered similar deal, but there are 2 issues here:

1) The bank controls how much interest they charge you and is floating and at their discretion to adjust.

2) There is guaranteed and non-guaranteed portions for your investment. I can also guarantee you that having seen too many of such plans, you will never get the full rate for the projected "non-guaranteed" portion at the end of 10-15 years, and the payout rate for the guaranteed portion is always much lower than the interest rate you need to pay for the leverage loan, so your return is going to be shitty at end of the lock-in period!

recently i have been introduced to this plan. something wasn’t discussed in this thread is the leverage part. e.g. 200k cash & 500k loan from bank. so on 49th month, the interest is pegged to 700k. there are financing cost etc. but all in, it works out to be quite feasible, esp looking at the low interest rate sign up now. i was told by rm, 49th month onwards, i should be getting around 6-8% per year. which is quite attractive.

the downside is, i need to lock in my sum for 10-12 years minimum. the upside is..minimum risk (?), lifetime monthly payout & some insurance coverage.

any bros familiar w this plan? any risk? any other downside? thanks.

 

[chrisloh65]

You need to ask for black and white on 2 things:

1) How much is the payout from 49th month onwards? Is it guaranteed payout?

2) 6% return, is this guaranteed?

I doubt they are as good as they "marketed" when market interest rate is so low now

thanks for the write up. yes, i am a conservative investor. this does look like a plan for my appetite. i am intrigued by the lifetime monthly payouts from 49th month onwards, and even at 6%, it’s still decent considering the low risk. i intend to just park the sum in the bank, and i calculate it takes est. 15yrs to break even.

i understand the cost of financing is pegged to sibor rate. think i better ask about the rates for pre-covid to understand better...assuming 4yrs down the road..the interest bounce back pre-covid.

 

[havetheveryfun]

Because it consist of the guaranteed and non guaranteed plus the interest rate is floating. Thus “should be”.

Of cos. If u could really get 6% guaranteed I'm pretty sure many people would jump onto the plan. And 6% also is it after after deducting the fees already or before? And so on.

 

[Mr.Canberra]

Of cos. If u could really get 6% guaranteed I'm pretty sure many people would jump onto the plan. And 6% also is it after after deducting the fees already or before? And so on.

Lai lai lai uncle intro you one good policy for maximum retirement income. Suitable for lazy people with cash but want to jiak hong full time in peace.

Great Eastern - PrimeGold Bonus 2

This one buay pai lah. Thanks for reading my snake oil post.

 

[ashcrow]

I was offered similar deal, but there are 2 issues here:

1) The bank controls how much interest they charge you and is floating and at their discretion to adjust.

2) There is guaranteed and non-guaranteed portions for your investment. I can also guarantee you that having seen too many of such plans, you will never get the full rate for the projected "non-guaranteed" portion at the end of 10-15 years, and the payout rate for the guaranteed portion is always much lower than the interest rate you need to pay for the leverage loan, so your return is going to be shitty at end of the lock-in period!

i take it that you didnt sign up. i am also thinking if i should. the 6-8% sounds really rosy. but, i need to make sure its not all about salesman talk. there are very little information or review.

true that the bank can adjust the interest...but I believe they have to follow certain regulations. from what I was shared..there are 2 interest component that determine my payout.

1) bank yearly premium %. which the rm mentioned that it's quite fixed at 3.65% throughout many many years.

2) cost of financing %. this is the variable component that the bank can adjust. but, i was shared that it's pegged to sibor.

I also asked for an illustration..if based on 2019 (pre-covid year), how much payout I could get. the answer I got is 8%.

what shared above...it's through verbal discussion with rm. i cant say that i rem everything throughout the discussion..and the information above is accurate..so, dont hold me for my words.

You need to ask for black and white on 2 things:

1) How much is the payout from 49th month onwards? Is it guaranteed payout?

2) 6% return, is this guaranteed?

I doubt they are as good as they "marketed" when market interest rate is so low now

I did ask for guaranteed payout %. it works out to be 4%+, and the rm mentioned that they have never pay anything lesser.

I dont think the rm will guarantee and promise the sky. i understand on his role as well. I have to make my decision based on trends and reviews like these.

 

[ashcrow]

Lai lai lai uncle intro you one good policy for maximum retirement income. Suitable for lazy people with cash but want to jiak hong full time in peace.

Great Eastern - PrimeGold Bonus 2

This one buay pai lah. Thanks for reading my snake oil post.

really not bad. looking at their illustration. its about 14% from 6th year onward. without the 1st 5 years, it comes at an average of 9.3% for the 15yrs tenure. not bad. hmmm....

 

[Mr.Canberra]

really not bad. looking at their illustration. its about 14% from 6th year onward. without the 1st 5 years, it comes at an average of 9.3% for the 15yrs tenure. not bad. hmmm....

Yah the young chap from the bank was really honest and intro a "lazy" policy that suits my need. He did not gave me the usual sales talk probably he knows I am "giam siap calculative" uncle. No point wasting his own time hahaha. I will apply for this when I have spare cash to park in the future.

Don't think the non guaranteed EIR is that high lah! The yearly payout is draw down from the principal sum as well.

In reality the returns are quite similar to CPF's 3-4% p.a. returns but difference is you can choose when to cash out unlike CPF! No penalty if you choose to surrender policy from the 4th or 5th year onwards. Cannot remember the details.

What I know is this policy is very low investment risk and receive reasonable and better returns than fixed deposits.

 

[boredboiboi]

really not bad. looking at their illustration. its about 14% from 6th year onward. without the 1st 5 years, it comes at an average of 9.3% for the 15yrs tenure. not bad. hmmm....

It works differently. End of 15 years all the payout and ends. Different from the plan u mentioned initially where capital is still there

 

[xtwis7]

This is also known as Prime Rewards at Great Eastern since it’s the same policy.

It’s one of the more decent policies because this is by far the plan with the fastest guaranteed breakeven. For maximum yield, you’ll want to be going for the 5+15 option. You want fastest guaranteed breakeven, it’s 3+17. Highest payout will be 5+10.

Pretty simple. Of course if anybody’s keen to know more, I can share the illustrations. Note that the yield is slightly lower for premiums below $50k.

really not bad. looking at their illustration. its about 14% from 6th year onward. without the 1st 5 years, it comes at an average of 9.3% for the 15yrs tenure. not bad. hmmm....

 

[chrisloh65]

What is the XIRR for:

1) With only guaranteed payout?

2) With both guaranteed and non-guaranteed payout?

Yah the young chap from the bank was really honest and intro a "lazy" policy that suits my need. He did not gave me the usual sales talk probably he knows I am "giam siap calculative" uncle. No point wasting his own time hahaha. I will apply for this when I have spare cash to park in the future.

Don't think the non guaranteed EIR is that high lah! The yearly payout is draw down from the principal sum as well.

In reality the returns are quite similar to CPF's 3-4% p.a. returns but difference is you can choose when to cash out unlike CPF! No penalty if you choose to surrender policy from the 4th or 5th year onwards. Cannot remember the details.

What I know is this policy is very low investment risk and receive reasonable and better returns than fixed deposits.

 

[ashcrow]

Yah the young chap from the bank was really honest and intro a "lazy" policy that suits my need. He did not gave me the usual sales talk probably he knows I am "giam siap calculative" uncle. No point wasting his own time hahaha. I will apply for this when I have spare cash to park in the future.

Don't think the non guaranteed EIR is that high lah! The yearly payout is draw down from the principal sum as well.

In reality the returns are quite similar to CPF's 3-4% p.a. returns but difference is you can choose when to cash out unlike CPF! No penalty if you choose to surrender policy from the 4th or 5th year onwards. Cannot remember the details.

What I know is this policy is very low investment risk and receive reasonable and better returns than fixed deposits.

It works differently. End of 15 years all the payout and ends. Different from the plan u mentioned initially where capital is still there

This is also known as Prime Rewards at Great Eastern since it’s the same policy.

It’s one of the more decent policies because this is by far the plan with the fastest guaranteed breakeven. For maximum yield, you’ll want to be going for the 5+15 option. You want fastest guaranteed breakeven, it’s 3+17. Highest payout will be 5+10.

Pretty simple. Of course if anybody’s keen to know more, I can share the illustrations. Note that the yield is slightly lower for premiums below $50k.

thanks for sharing. it does seems really good for a lazy plan. but, can I put in layman term. I bank in $50k, I will get back 119700 at 15th year mark? if yes, it does gives better returns than premierlife, right? though premierlife is perpetual. hmmm.

if I go with 5+15 option with more investment, say 100k, i should be looking at $14k per mth? vs premierlife 200k...monthly return on 5th year is about 14k as well. the PrimeGold Bonus guaranteed % seems high as well.

 

[a4973]

thanks for sharing. it does seems really good for a lazy plan. but, can I put in layman term. I bank in $50k, I will get back 119700 at 15th year mark? if yes, it does gives better returns than premierlife, right? though premierlife is perpetual. hmmm.

if I go with 5+15 option with more investment, say 100k, i should be looking at $14k per mth? vs premierlife 200k...monthly return on 5th year is about 14k as well. the PrimeGold Bonus guaranteed % seems high as well.

Looking at the illustration I believe for single premium of $50k total payout is $69700 which is inclusive of the $50k.

 

[ashcrow]

side note. every year end, my company will have financial & budgeting for next year. usually looking at 8-10% growth. if these annuity plans can provide the 6%..or like the GE prime gold..9%. if it...really so good? i can ask my boss sell off the business, and park his money there. low risk and no business headache somemore.

 

[ashcrow]

Looking at the illustration I believe for single premium of $50k total payout is $69700 which is inclusive of the $50k.

ah ok..ps. then i interpret wrongly liao. if that’s the case...about 2.6% per year leh? better to put in dbs multiplier...

 

[xtwis7]

The guaranteed payout is considered to be one of the more decent ones in the market as most other par plans lean towards a higher non-guaranteed return.

ah ok..ps. then i interpret wrongly liao. if that’s the case...about 2.6% per year leh? better to put in dbs multiplier...