PremierLife Generation III

[elnewbie]

Hi
What do u mean by Bank Yearly Premium ?
I'm only aware that the interest to be paid for financing this policy is based on Sibor + spread.

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.



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.

 

[Nancy Fancy]

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...

Hi Ashcrow

IRR(XIRR) is 3.6% per annum per excel formula, not 2.6%
Prestige Life Rewards is a whole life plan, Prime Rewards can be 5+10, 3+17 or 5+15 years.

I can share you more details if you interested in any of the plans.

 

[ashcrow]

Hi
What do u mean by Bank Yearly Premium ?
I'm only aware that the interest to be paid for financing this policy is based on Sibor + spread.

ps..i referring to investment return %. i don’t know why it’s at 3.6% though. i need to ask my rm.

Under MAS regulations, projections for non-guaranteed returns based on the insurers achieving 3.25% and 4.75% investment returns respectively.

from my understanding.
investment return % - financing cost (sibor+spread) = payouts

Hi Ashcrow

IRR(XIRR) is 3.6% per annum per excel formula, not 2.6%
Prestige Life Rewards is a whole life plan, Prime Rewards can be 5+10, 3+17 or 5+15 years.

I can share you more details if you interested in any of the plans.

thanks. let you know again if keen!

 

[addict951]

Up

ps..i referring to investment return %. i don’t know why it’s at 3.6% though. i need to ask my rm.

Under MAS regulations, projections for non-guaranteed returns based on the insurers achieving 3.25% and 4.75% investment returns respectively.

from my understanding.
investment return % - financing cost (sibor+spread) = payouts



thanks. let you know again if keen!

Up this old thread
ashcrow, did you sign up any of the plans mentioned in this thread?

 

[xtwis7]

Up

Up this old thread
ashcrow, did you sign up any of the plans mentioned in this thread?

The current trend of such annuities is much more attractive if financing is taken up. Of course the consideration is that interest rate risk may erode the returns.

Let's assume that current interest rates at 1.5% pa. Given a $100k downpayment and $200k loan, your return on your $100k downpayment after the 5th year when payouts start will be as such:

Yearly payout: $10.8k
Interest payment: $3k
Net return: $7.8k

Out of the $10.8k return, roughly 45% is guaranteed with the remaining made up by the projected returns. Above is illustrated based on Prestige Life Rewards 3 from GE. While there are other similar options, note that the guaranteed payout will vary from company to company.

 

[oceanicmanta]

agree with financing looks more attractive

however, interest cost start from day 1, so one has to be able to service the loan for the first 4 yrs before getting the payout

if not wrong, another good feature is that the risk of capital loss is capped at 80% from day 1 (unlike par fund plans where the risk of capital loss is significant in the initial years)

 

[reddevil0728]

agree with financing looks more attractive

however, interest cost start from day 1, so one has to be able to service the loan for the first 4 yrs before getting the payout

if not wrong, another good feature is that the risk of capital loss is capped at 80% from day 1 (unlike par fund plans where the risk of capital loss is significant in the initial years)

I thought all these also based on park funds?

so is not so much about par funds but the type

 

[soneat]

I thought all these also based on park funds?

so is not so much about par funds but the type

These plans are either based on crediting rate or par fund. So it pretty much depends on the discretion of the insurer.

 

[xtwis7]

agree with financing looks more attractive

however, interest cost start from day 1, so one has to be able to service the loan for the first 4 yrs before getting the payout

if not wrong, another good feature is that the risk of capital loss is capped at 80% from day 1 (unlike par fund plans where the risk of capital loss is significant in the initial years)

Yes the first four years without the payouts need to be factored in. Treat it as servicing payments before your property is built up.

 

[reddevil0728]

These plans are either based on crediting rate or par fund. So it pretty much depends on the discretion of the insurer.

Yea so nothing to do with par fund or not no?

 

[xtwis7]

Yea so nothing to do with par fund or not no?

Such annuities are still participating policies. ULs that use crediting rate are non-participating products which function more similarly to a ILP.

 

[reddevil0728]

Such annuities are still participating policies. ULs that use crediting rate are non-participating products which function more similarly to a ILP.

understand. So poster talking about different things?

agree with financing looks more attractive

however, interest cost start from day 1, so one has to be able to service the loan for the first 4 yrs before getting the payout

if not wrong, another good feature is that the risk of capital loss is capped at 80% from day 1 (unlike par fund plans where the risk of capital loss is significant in the initial years)

 

[xtwis7]

understand. So poster talking about different things?

It's the same thing. Why there's a 80% first day cash value is because you're paying a lump sum upfront. Hence, what @oceanicmanta mentioned is capping your loss at 20% in the worst case scenario where let's say you surrender before the first year is up.

 

[reddevil0728]

It's the same thing. Why there's a 80% first day cash value is because you're paying a lump sum upfront. Hence, what @oceanicmanta mentioned is capping your loss at 20% in the worst case scenario where let's say you surrender before the first year is up.

but poster is saying "unlike par fund plans where the risk of capital loss is significant in the initial years". is nothing to do with par funds plan right?

 

[xtwis7]

but poster is saying "unlike par fund plans where the risk of capital loss is significant in the initial years". is nothing to do with par funds plan right?

I believe it should be corrected to say "unlike most other traditional regular premium par plans, this annuity par plan has a high surrender value even from day 1 because you're making a single premium payment".

This should clarify.

 

[oceanicmanta]

I believe it should be corrected to say "unlike most other traditional regular premium par plans, this annuity par plan has a high surrender value even from day 1 because you're making a single premium payment".

This should clarify.

thanks, you explained it better

it's more to highlight the cap on capital loss that applies to different products (not singling out par plans)

in my mind, I was actually thinking of my own Pru (regular premium) par fund plans and Etiqa eEasy Save (upfront premium, non par), both with low surrender values in early years.

 

[Value.Matrix]

agree with financing looks more attractive

however, interest cost start from day 1, so one has to be able to service the loan for the first 4 yrs before getting the payout

if not wrong, another good feature is that the risk of capital loss is capped at 80% from day 1 (unlike par fund plans where the risk of capital loss is significant in the initial years)

I would caution to say that risk of capital loss is capped at 80%, simply because you have to factor in leverage (and that is commonly used, using premium financing), so if you put down 30% because banks only loan you 90% of that 80% (which is around 72% but i round off to 70%), its a 100% loss of your capital.

80% loss is only when you did not use any kind of leveraging (and that is not common because people usually leverage). And most people would not think of paying down the leverage (which you really need to factor in once loan interest climb, and may go above your crediting rate).

 

[oceanicmanta]

I would caution to say that risk of capital loss is capped at 80%, simply because you have to factor in leverage (and that is commonly used, using premium financing), so if you put down 30% because banks only loan you 90% of that 80% (which is around 72% but i round off to 70%), its a 100% loss of your capital.

80% loss is only when you did not use any kind of leveraging (and that is not common because people usually leverage). And most people would not think of paying down the leverage (which you really need to factor in once loan interest climb, and may go above your crediting rate).

I made a mistake .. for this product the min guaranteed surrender value is 80% of Sum Assured ... so the risk of capital loss shld be 20% (I wrote it as risk of capital loss is capped at 80% instead)

I was shown an example by bankers .. $100k single premium, of which $30k cash and $70k loan from bank.

say if surrender after 1 month, would get back nett 10k cash, which is 80k (the min surrender value) less 70k (to pay off loan) ... not counting the interest cost of 1%+pa for the first month

 

[ashcrow]

Up

Up this old thread
ashcrow, did you sign up any of the plans mentioned in this thread?

hi. i did. signed back during end of 2020. like bros mentioned here that financing makes it more attractive, i took a loan to leverage on the annuity.

 

[mikeeeey]

Now Generation 5, payout from yr 3 onwards