Prudential Pruflexicash

[Thememberboi]

hi guys, i have a endowment plan which is the Pruflexicash

As i'm only 18 when i purchased this, i can only afford to pay $79 premium a month. This was discussed with my financial planner.

And the projected rate of return is 4.75%. However, i'm about 2 and a half year into the plan already. I'm thinking of surrendering the plan since my parents don't really need the cash in case(touchwood) i got into any accidents or diseases. Since they got their own money for retirement. And that i'm thinking of using it to invest in more liquid vehicles like stocks that might possibly generate a higher return in long term.

What do you guys think? should i surrender and get back the money? or should i just continue the plan?

 

[Lewis.T]

Hm, I can tell you what you can do if you do not wish to surrender the plan.

Use the cashback to fund your investments, so in reality you're only committing something like $40 or less per month into the plan.

Think of the plan as a low risk low return investment vehicle.

Alternatively if you cancel you'll be 100% sure to make some losses, 2k at the very least.

My personal recommendation is to hold onto the plan. You're not committing an awful lot and I hope you don't need the money for an emergency right now that's why you're thinking of surrendering.

 

[blurpandasg2014]

hi guys, i have a endowment plan which is the Pruflexicash

As i'm only 18 when i purchased this, i can only afford to pay $79 premium a month. This was discussed with my financial planner.

And the projected rate of return is 4.75%. However, i'm about 2 and a half year into the plan already. I'm thinking of surrendering the plan since my parents don't really need the cash in case(touchwood) i got into any accidents or diseases. Since they got their own money for retirement. And that i'm thinking of using it to invest in more liquid vehicles like stocks that might possibly generate a higher return in long term.

What do you guys think? should i surrender and get back the money? or should i just continue the plan?

Personally, I think it will be better off for u to stop paying for this plan and put the money into posb invest savers

 

[Thememberboi]

Hm, I can tell you what you can do if you do not wish to surrender the plan.

Use the cashback to fund your investments, so in reality you're only committing something like $40 or less per month into the plan.

Think of the plan as a low risk low return investment vehicle.

Alternatively if you cancel you'll be 100% sure to make some losses, 2k at the very least.

My personal recommendation is to hold onto the plan. You're not committing an awful lot and I hope you don't need the money for an emergency right now that's why you're thinking of surrendering.

understood! I think the premium i've paid in total only less than $2.5k up till now. If it cost 2k to surrender the plan then i'll be left with nothing

Personally, I think it will be better off for u to stop paying for this plan and put the money into posb invest savers

I've already have a young investor account with CIMB. I've done my due diligence for the past few months and i am thinking to invest in blue chips and reits for capital growth and dividends to reinvest. But just afraid when i surrender the plan i would not get much back

 

[Lewis.T]

understood! I think the premium i've paid in total only less than $2.5k up till now. If it cost 2k to surrender the plan then i'll be left with nothing



I've already have a young investor account with CIMB. I've done my due diligence for the past few months and i am thinking to invest in blue chips and reits for capital growth and dividends to reinvest. But just afraid when i surrender the plan i would not get much back

You can call up the pru hotline to ask for the current surrender value, just don't be shocked if it isn't much at such a stage in the plan. (If any)

If you are confident in making good returns in the stock market, surrendering might be a better choice as the loss will be insignificant compared to what you may be earning.

If you are not so confident then you can think of it as a low risk investment vehicle and just hold onto the plan. It has some other minor benefits too if you've gone for the premium waiver riders.

 

[Thememberboi]

You can call up the pru hotline to ask for the current surrender value, just don't be shocked if it isn't much at such a stage in the plan. (If any)

If you are confident in making good returns in the stock market, surrendering might be a better choice as the loss will be insignificant compared to what you may be earning.

If you are not so confident then you can think of it as a low risk investment vehicle and just hold onto the plan. It has some other minor benefits too if you've gone for the premium waiver riders.

Thanks Lewis for your advice! i think i will just cash out the cashback every year and as you said, about $37 every month only! I guess it's better this way also.

Confident or not, i will have to give it a try first. i've done my part in doing my due diligence... hopefully it will go in my favour. Decide to use about $3-5k of my savings for it! Aiming for long term growth though.

 

[Lewis.T]

Thanks Lewis for your advice! i think i will just cash out the cashback every year and as you said, about $37 every month only! I guess it's better this way also.

Confident or not, i will have to give it a try first. i've done my part in doing my due diligence... hopefully it will go in my favour. Decide to use about $3-5k of my savings for it! Aiming for long term growth though.

Np, glad I could be of some help to you!

Edit: If you're still reading, why CIMB youth investor? I haven't done any research on this but everybody and their mum seems to be using SCB here. (Myself included)

 

[Shion]

My hatred for PruFlexiCash is so deep I always thrash this plan whenever someone mentions about it.

I used to tell Pru agents dont waste my time talking to me about PruFlexiCash.

No offence.

 

[coey]

You have the policy right ? Just look at the surrender value. For such plan the first 2 yr surrender value is 0 usually .

 

[Shion]

This plan is pointless because it is not a "savings plan" but a "savings + term plan".

Why pay for a "savings plan" that has other distribution costs and agents commission when you can just park it in a bank account ?

You "gian png" the 4.75% so much ? Agents should not tell their clients the HIGHEST projected returns but the LOWEST projected returns.

Check your maturity value. Your total guaranteed sum should be a lot less than the total premiums paid. Is this what you called "savings" ?

Prudential better wake up their ***** idea. So many of their agents are selling this as a "pure savings plan" when it is not the case.

Side-track --> There was a time one Pru agent tried to sell a PruFlexiCash Protection Plus to me, saying that it is a "savings plan". But the funny part is, on the policy itself it does states that it is not a savings plan. Really is 睁着眼睛说瞎话.

 

[Lewis.T]

This plan is pointless because it is not a "savings plan" but a "savings + term plan".

Why pay for a "savings plan" that has other distribution costs and agents commission when you can just park it in a bank account ?

You "gian png" the 4.75% so much ? Agents should not tell their clients the HIGHEST projected returns but the LOWEST projected returns.

Check your maturity value. Your total guaranteed sum should be a lot less than the total premiums paid. Is this what you called "savings" ?

Prudential better wake up their ***** idea. So many of their agents are selling this as a "pure savings plan" when it is not the case.

Side-track --> There was a time one Pru agent tried to sell a PruFlexiCash Protection Plus to me, saying that it is a "savings plan". But the funny part is, on the policy itself it does states that it is not a savings plan. Really is 睁着眼睛说瞎话.

I think you're being too focused on the semantics here...

The policy states that it is not a savings account (akin to your bank savings account where you can withdraw as much as you put in and have flexibility).

If you look around, even investment plans are being called regular savings plans. I have little doubt that investments do not even have $1 guaranteed.

You also seem to focus a lot on the guaranteed portion of the plan, but the company is performing at over the projected 4.75% for the past decade or so, meaning that we can give you as per projected or more.

The bonuses are also declared yearly, and once declared will added to your current guaranteed amount, meaning that we don't wait till the end of say... 25 years before telling you hey! You've made money!

You lost money from this because you chose to surrender, but others who have held onto the plan have seen their money grow.

Got to chillax a bit.

 

[Tooi Kono Machi De]

I think you're being too focused on the semantics here...

The policy states that it is not a savings account (akin to your bank savings account where you can withdraw as much as you put in and have flexibility).

If you look around, even investment plans are being called regular savings plans. I have little doubt that investments do not even have $1 guaranteed.

You also seem to focus a lot on the guaranteed portion of the plan, but the company is performing at over the projected 4.75% for the past decade or so, meaning that we can give you as per projected or more.

The bonuses are also declared yearly, and once declared will added to your current guaranteed amount, meaning that we don't wait till the end of say... 25 years before telling you hey! You've made money!

You lost money from this because you chose to surrender, but others who have held onto the plan have seen their money grow.

Got to chillax a bit.

I agree with you to a certain extent.. My only gripe is even if the bonus declared yearly meets expectations, its unlikely the returns will be the 4.75% and instead 3.something%. U mentioned in another post that this is due to distribution costs but why wasnt this conveyed beforehand

 

[Lewis.T]

I agree with you to a certain extent.. My only gripe is even if the bonus declared yearly meets expectations, its unlikely the returns will be the 4.75% and instead 3.something%. U mentioned in another post that this is due to distribution costs but why wasnt this conveyed beforehand

Yes, this part is the fault of your adviser. I make it clear to people that the projected returns is based on what the company makes and not what you will make. If the company can achieve say 4.75% in the long term, you can expect to receive the projected amounts under the 4.75% column.

 

[Shion]

I think you're being too focused on the semantics here...

I believe I mentioned before I am sensitive to these...

The policy states that it is not a savings account (akin to your bank savings account where you can withdraw as much as you put in and have flexibility).

Yes, it is not a savings account. You also acknowledge it is not, but like I said, so many of your Prudential comrades are selling this as "pure savings".

You also seem to focus a lot on the guaranteed portion of the plan, but the company is performing at over the projected 4.75% for the past decade or so, meaning that we can give you as per projected or more.

Why should one NOT focus on guaranteed portion ? I am not so concerned with the % ROI your company can generate. But what I want to see is the guaranteed sum ! You know, guaranteed ?

Why would I even advice or tell people to dump their money in PruFlexiCash which does not even give you a guaranteed sum that is on-par with total premiums paid ?

Take a look at Tokio Marine Nest Egg (GIO Cashback) plan. Their death benefit is lower and guaranteed sum is ON-PAR with total premiums paid. PruFlexiCash on the other hand, is a "term insurance" in disguise of a "savings plan" I would suggest. Your death benefit is much much higher. Where does the money come from to fund this portion ?

The bonuses are also declared yearly, and once declared will added to your current guaranteed amount, meaning that we don't wait till the end of say... 25 years before telling you hey! You've made money!

So what ? Why should I wait for bonuses to be added to my guaranteed sum to make my amount as if it is growing ? Why should this be the factor inflating my guaranteed sum from the start ? BONUSES SHOULD BE EXTRA MONEY BUT IN YOUR PRUFLEXICASH IT IS NOT !

From the start, premiums are being channeled to support the "term insurance" portion, you might as well buy a pure term insurance that is so much better, higher coverage and lower premiums.

You lost money from this because you chose to surrender, but others who have held onto the plan have seen their money grow.

Got to chillax a bit.

Why I surrender because I cannot stand and swallow the fact that I am paying so much for that "term insurance" portion and not the savings part as claimed by so many of your PRUDENTIAL agents

 

[Shion]

You keep on talking about cashbacks.

For PruFlexiCash, when you do a cashback, your total guaranteed sum is lowered, your returns generated is also lower. Yes, your cashback gives you a non-guaranteed sum too but this amount is only activated if you request a cashback.

Can your bonuses be on-par with the total cashbacks ?

 

[Lewis.T]

You keep on talking about cashbacks.

For PruFlexiCash, when you do a cashback, your total guaranteed sum is lowered, your returns generated is also lower. Yes, your cashback gives you a non-guaranteed sum too but this amount is only activated if you request a cashback.

Can your bonuses be on-par with the total cashbacks ?

If you're not going to discuss this based on logic but rather on emotions then I am not going to go there.

I am however, up for a healthy discussion if you're willing to cast your emotions aside for a bit.

The cashback makes up part of your guaranteed amount. The cashback is guaranteed. When you withdraw your cashback, you are effectively withdrawing the guaranteed portion out of the plan. The rest that is left in the plan will continue to accumulate over the years.

I give you an example, a 25 year plan.

If you take out cashback every year from when you are able to, you will receive this 24 times in 25 years.

Lets assume you are doing a $200/mth plan, cashback will be about $1500/mth, total premiums will be $60k.

Total cashback received will be 36k, the remaining in the plan that you cannot withdraw is 24k.

The 24k will still continue to grow, to become 35k.

Cashback received = 36k
Maturity value = 35k
Total received = 71k
Total premiums paid = 60k

If you do not intend to use the cashback and let it compound, your 60k will become about 85k.

Both ways you are still making money, unless Prudential manages the fund horribly. If you're the type that goes for guaranteed amounts then perhaps you should have mentioned this to your adviser, and perhaps he could have done a better job at meeting your needs.

If you mentioned it but he has gone ahead with recommending you this plan then I have no comments lol.

 

[Tooi Kono Machi De]

Yes, this part is the fault of your adviser. I make it clear to people that the projected returns is based on what the company makes and not what you will make. If the company can achieve say 4.75% in the long term, you can expect to receive the projected amounts under the 4.75% column.

Tbh, no hard feeling but this is also misleading.. Why put 4.75% projected returns on BI then? They shd deduct whatever costs incurred by the coy before presenting the nett returns to the prospective client.

 

[Shion]

I used to have a PruFlexiCash Protection Plus.

Accumulated cashback option.

Total premiums paid $43000 but total guaranteed sum is $24000

I asked the company and asked the agent. Both tell me the same thing -- the total guaranteed sum is actually the total of your cashbacks which you did not request for it.

From what I know, it is the same thing for PruFlexiCash, because my mother has one.

Anyway, I do not wish to talk further. I have made my points very clear. For any other threads on PruFlexiCash, I will still continue to unleash a series of fury response to it. This one is a guaranteed from me.

Btw, there is a reason why so many people are against PruFlexiCash. I am not the only one, fyi. A problem with clients or a problem with the policy, you decide.

 

[Shion]

Tbh, no hard feeling but this is also misleading.. Why put 4.75% projected returns on BI then? They shd deduct whatever costs incurred by the coy before presenting the nett returns to the prospective client.

IIRC it is a requirement to put a "standard % ROI number". It used to be 5.25%.

 

[Lewis.T]

I used to have a PruFlexiCash Protection Plus.

Accumulated cashback option.

Total premiums paid $43000 but total guaranteed sum is $24000

I asked the company and asked the agent. Both tell me the same thing -- the total guaranteed sum is actually the total of your cashbacks which you did not request for it.

From what I know, it is the same thing for PruFlexiCash, because my mother has one.

Anyway, I do not wish to talk further. I have made my points very clear. For any other threads on PruFlexiCash, I will still continue to unleash a series of fury response to it. This one is a guaranteed from me.

Btw, there is a reason why so many people are against PruFlexiCash. I am not the only one, fyi. A problem with clients or a problem with the policy, you decide.

Ok, I can see where your frustration is coming from. You were perhaps looking for a plan where you can grow your wealth but have been recommended a plan with a higher sum assured, thus eroding into the returns.

PruFlexicash Protection Plus has 4x the sum assured compared to a regular PruFlexicash, making it unsuitable when looking from a growth standpoint.