PRUDENTIAL SAVINGS SAGA

Perisher

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You are missing the protection for the policy term as well, that's why we don't compare the two.

You can also add inexpensive riders like premium waiver riders to the plan, which waives off future premiums upon diagnosis of an early/critical illness.

What if a plan could allow you to save regularly, in small amounts, and also give you protection during the time you save, without having you to worry about market volatility. But when the markets do well you will get a larger slice.

You also do not have to wait till the end of the policy to find out how much you've made, we will declare the amount you have earned yearly, and once we declare it will form part of your guaranteed amount.

At the same time your family will have a small assurance that if something unfortunate happens, there will be a payout of more than what you have saved, and if you were to fall seriously ill, the company will let you enjoy all the benefits of the plan while you can stop paying for it.

All I need is your time investment of 30 mins, while we fill up the paperwork and we'll be done for the next 20 years.

Sounds fantastic doesn't it?


I understand that each benefit is not significant by any means, such as the death benefit, but don't discount the benefits. There are plenty to be found.

Erm sounds fantastic until it falls apart.
The endowment if I understand it correctly is sold as a savings+investing plan, not a sick/protection plan?

That's already a controversial part. It seems to want to do a bit of everything without acing any. And sounds overly complicated.

Is there any reason why you avoid answering why insurance company can't put up a notice on their first page that states,
This policy may result in 0 capital gains or losses in the long term.
It's already on most investment products like stocks, bonds etc...

The riders are extras which over complicate the policy as can be seen in the fb posting so let's dismiss that. SSB doesn't have that. Makes it easier as a comparison no? See no reason to complicate it.

The part about declaring every year what you earn is essentially no difference from SSB where it's already made clear at the start how much one can earn.

The last bit is where SSB doesn't cover, the falling seriously sick, but SSB will continue without paying a cent more too. The difference here is that it won't be able to buy new one by then. So this is actually the biggest difference. edit: eh, this one is a rider benefit or in-built?

Meaning one is actually buying this over SSB mainly due to the sickness coverage. But if that's a advantage of endowment, we need to ask, how many % of the people who bought endowment actually manage to claim this part? What's the ratio? What's the odds?

If it's lower than 10%, would it matter?

Overall, as we break it down, I fail to see how drastically different SSB is from endowment that we can't compare it?

Essentially boils down to 2 point, sickness/illness coverage and returns difference ain't it?
 
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OngHuatHuat

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http://foreverfinancialfreedom.blogspot.sg/2017/04/i-surrendered-my-whole-life-policy-and.html?m=1

Saturday, April 8, 2017
I Surrendered My Whole Life Policy And Lose 80% Of My Capital
I thought this will be a good case study to look back on what I did recently at some point in the future.

I would not call this a mistake that I did because I think the policy has served its purpose for the past 4 years which I no longer needed it anymore. Still, if there is a mistake to point out, it'll be that I'd be better off taking term back then.

Well, time cannot be rewind, so I guess life moves on from here.





My WL Policy

I am not an expert in this insurance area and is/will never be an area that will interest me so I am not comparing my policy to any benchmark or competitors.

My WL policy is a straightforward deal from Prudential multiplier which will cover me a sum assured of $500k upon ceased. This multiplier will be effected until the age of 60 before it will revert back to the original value of $167k.

I chose a 15 year option paying a premium of $543 every month and have been paying them the past 3+ years before I decided to surrender.

I paid a total premium of about $20k approximately during the course of my policy.

Surrender Value

I was informed by an acquaintance in facebook that I can check out alternate 3rd party company that might be willing to buy over my policy.

I checked with purvis capital whether they will be able to offer a higher surrender value but the conclusion is they are not because the duration I have with the policy is too short. Else, usually on average they would be able to buy your policy at a 5% higher than the surrender value you might have with the insurance company.

In the end, I managed to receive a surrender amount of $4k, which sums up to about 20% of the total premium I've paid. The loss is 80% and about $16k in absolute value.

Why Did I Surrender?

This is a personal reason so I am sure there would be people who might disagree with me.

I reviewed my needs and cashflow and decided that my family no longer needs the policy as much as they did should something happened to me today as compared to 3 years ago. The amount of quantum we are talking about is always going to be subjective but we agreed and decided on what is enough.

Someone could argue that the policy can also be a good form of endowment in other uses, i.e if I keep them throughout the full 15 years and redeem them the next 20 years or something. I am not a big fan of endowment myself so that's something not in my plan at all. Still, I think it's worth mentioning that it CAN be useful to particular individual with certain needs so it is wrong to say that they are a total crap.

With more cashflow on my hand, I can have an alternate way to build up my wealth in different aspect which I think can also serve as a form of defense. Like a team of Barcelona, Offense is often a good way of defense. If you cannot defence, score more goals. But I think there needs to be at least some basic defence there and I think I've established that (not going into the details here).

How Do I Feel?

If there were anything to highlight, I think this part would be the most important of the lots.

First, I thought it was important to acknowledge that I have made a mistake buying a WL instead of a term.

Second, it was also important that I put my emotion aside, review my needs and decide on things swiftly. I could have let it dragged on for a few more years before deciding to withdraw and thought it was foolish. I thought it was important to be decisive and not wishy-washy about things. 80% loss, take it with stride and life moves on from there.

There are at least about 5 people in my circle of friends who thought that I would be suffering in this painful loss.

I guess this is the same with why people are frustrated with CPF because they are assuming CPF to be money that they would be depending for future retirement. In wealth building, I think it is prudent and conservative not to include them as part of our retirement strategy. So anything that comes out of it is a bonus, not a privilege.

I don't want to give the impression that thinks that I belittle this amount of money but it is usually part of my conservative ways in building wealth strategy to exclude these particular things in my computation by taking a 100% provision so instead of feeling like a loss, it feels like a gain to me.

Yes, I know it is pretty silly to look at it that way, but my cashflow is actually better this month by $4k because of this.

* Again, this is a disclaimer to highlight that the products do not suit my needs at this point but does not mean it does not suit any individual at any particular point of time. Just need to be clear about that.

His loss is insanely large.
I dunno why.
If i surrender now, my loss is approximately around 30 % of premium paid.
Because of this post, I went home and calculated the sums again.
 

OngHuatHuat

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Thanks for all your sharing btw yyhwin

Actually the life insurance return quite consistent with what they promised.
Now I kind of know why prudential policy is usually slightly more expensive.

I still considering whether to continue or just surrender it. :s8:
 

akwl88

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His loss is insanely large.
I dunno why.
If i surrender now, my loss is approximately around 30 % of premium paid.
Because of this post, I went home and calculated the sums again.

He surrendered on 4th yr

U got check ur surrender value how much on 4th yr?
 

appleyum

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Prudential said simi difficult investment climate during the 3 financial saga.

Stock market also rebound sharply after all the 3 financial saga right.

Prudential really all sorts of lousy excuse also dare to give.

M1 drop until $1.20 during Lehman brother 2008 saga, so now 2017 M1 stock price is still at $1.20 ah ? Market rebound and Prudential diam diam quietly hide all the profit to fund their luxury AP watch and sports car sibo ?

DyLveU8.jpg
 

havetheveryfun

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His loss is insanely large.
I dunno why.
If i surrender now, my loss is approximately around 30 % of premium paid.
Because of this post, I went home and calculated the sums again.

because for the first 2-3 years, a huge chunk of commissions is taken out of the policy .. last time someone shared before a picture in edmw, the commissions was like 50% of the premiums for the first 2 years, then lesser for the next few and then lesser and lesser until reach 0.

lets just say if u cancel in the first year, you will lose 100% of the premiums paid, cancel in 2nd year, you lose maybe 90%, cancel in 3rd year, lose 80%, and so on... something like that
 

Lewis.T

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Erm sounds fantastic until it falls apart.
The endowment if I understand it correctly is sold as a savings+investing plan, not a sick/protection plan?

I don't know how it was sold I was still learning basic math back then. I was talking about current endowments in general.

That's already a controversial part. It seems to want to do a bit of everything without acing any. And sounds overly complicated.

Can't comment, not sure how the agent sold it to him.

Is there any reason why you avoid answering why insurance company can't put up a notice on their first page that states,
This policy may result in 0 capital gains or losses in the long term.
It's already on most investment products like stocks, bonds etc...

Really? I'm looking at this page now, I haven't found anything remotely close to what you said after a minute of looking.
https://www.posb.com.sg/personal/la...ml?pid=sg-posb-vanity-investments-investsaver

The riders are extras which over complicate the policy as can be seen in the fb posting so let's dismiss that. SSB doesn't have that. Makes it easier as a comparison no? See no reason to complicate it.

The thing is his riders were almost standalone plans by themselves. The premium waiver riders I'm talking about are a fraction of the cost of his riders.

The part about declaring every year what you earn is essentially no difference from SSB where it's already made clear at the start how much one can earn.

It is different, because you don't know how much you will make otherwise until the end of the policy, where SSB straight up tells you regardless of what happens you get this amount.

The last bit is where SSB doesn't cover, the falling seriously sick, but SSB will continue without paying a cent more too. The difference here is that it won't be able to buy new one by then. So this is actually the biggest difference.

Yes SSB still continues but doesn't add value. We pay up the rest of the plan for him. It's a pretty big diff.

Meaning one is actually buying this over SSB mainly due to the sickness coverage. But if that's a advantage of endowment, we need to ask, how many % of the people who bought endowment actually manage to claim this part? What's the ratio? What's the odds?

I have no claims detail for this, but like I said it is a fraction of the cost. For plan that requires you to put in $2400 for 20 years, the waiver riders (both early and critical) cost $54.76 a year.
 
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appleyum

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17796358_10212258145305983_5432459219171178040_n.jpg


17795857_10212258543995950_4912340067030654936_n.jpg


Ask Pru-sh-it mai talk cock about the what

- lehman bro 2008
- dot com bust
- 1997 Asian crisis

Even with all those 3 events the global stock market all rebound back. Why prudential don't dare to mention the part where the stock market rebound back sharply leh ?

DyLveU8.jpg
 

akwl88

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because for the first 2-3 years, a huge chunk of commissions is taken out of the policy .. last time someone shared before a picture in edmw, the commissions was like 50% of the premiums for the first 2 years, then lesser for the next few and then lesser and lesser until reach 0.

lets just say if u cancel in the first year, you will lose 100% of the premiums paid, cancel in 2nd year, you lose maybe 90%, cancel in 3rd year, lose 80%, and so on... something like that

Yup. If u look at yyhwin policy, 1st 2 years are kosong
 

OngHuatHuat

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He surrendered on 4th yr

U got check ur surrender value how much on 4th yr?

4th year the loss will be around 44 %.

Total premium paid to date: 12404
Surrender value projected at 3.75% = 6924

I think my policy is one of the better ones, i see the new limited pay series, the benefit illustration not so good already.
 

akwl88

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I don't know how it was sold I was still learning basic math back then. I was talking about current endowments in general.



Can't comment, not sure how the agent sold it to him.



Really? I'm looking at this page now, I haven't found anything remotely close to what you said after a minute of looking.
https://www.posb.com.sg/personal/la...ml?pid=sg-posb-vanity-investments-investsaver



The thing is his riders were almost standalone plans by themselves. The premium waiver riders I'm talking about are a fraction of the cost of his riders.



It is different, because you don't know how much you will make otherwise until the end of the policy, where SSB straight up tells you regardless of what happens you get this amount.



Yes SSB still continues but doesn't add value. We pay up the rest of the plan for him. It's a pretty big diff.



I have no claims detail for this, but like I said it is a fraction of the cost. For plan that requires you to put in $2400 for 20 years, the waiver riders (both early and critical) cost $54.76 a year.

If it's lower than 10%, would it matter?

Overall, as we break it down, I fail to see how drastically different SSB is from endowment that we can't compare it?

Essentially boils down to 2 point, sickness/illness coverage and returns difference ain't it?
[/QUOTE]

Risk considerations

Before you decide to invest in the Nikko AM Singapore STI ETF or ABF Singapore Bond Index Fund through POSB Invest-Saver, you need to understand the risks and fees that come with investing in the ETFs, and be willing to accept that your principal amount may be at risk including the possible loss of the principal amount invested as this is not a capital guaranteed product.

Chiu no read?
 

appleyum

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appleyum got some vendetta with Prudential is it? :s13:
Hate them to the max... :s22:

Pru-sh-it is so greedy of course moi hate them. Prudential is one of the most greediest and cheesepie insurance company I had ever seen. You can click the link to see how they raise the insurance premium.

Now they even go and cheat customers money by right promise $42,000 now give back only $20,000 plus jin cheesepie ~!

http://www.tnp.sg/news/business/ntuc-income-and-great-eastern-raise-ip-premiums

Prudential hiked its premiums by 8.8 per cent to 36.6 per cent (The most greediest :mad:)

Aviva raised its IP premiums by between 10 per cent and 25 per cent

AIA raised its premiums by 2 per cent to 23 per cent

NTUC raised its premiums between 5 per cent and 15 per cent

GE raised its premiums by 2 per cent to 4.2 per cent

______________________________________________________________

Prudential raise rider's premium increase by 300 per cent ~! (The most greediest :mad:)

NTUC assist rider premium increase by 10 and 30 per cent

:)

NTUC Income and Great Eastern (GE) are the latest insurers here to raise the premiums of their Integrated Shield Plans (IPs), in the wake of hikes by their rivals - though the rises come with some sweeteners.

The premiums of Income's Enhanced IncomeShield Preferred plan relating to private hospitals have been increased by between 5 per cent and 15 per cent from March 1.

Its Assist rider on this IP also saw a premium hike of between 10 and 30 per cent from the same date.

GE will raise the premiums of its "as charged" private hospital plan by 2 per cent to 4.2 per cent.
It has started sending letters to affected policyholders on its premium revision and the introduction of a new rider, which will be effective from May 1 upon their renewals.


Mr Lee Swee Kiang, GE head of group product management, said: "For our IP ("as charged") plan for private hospitals, the average premium increase is the lowest in the market."

The insurers are raising IP premiums now that a 12-month moratorium - imposed when MediShield Life was introduced on Nov 1, 2015 - has expired.
Soon after, AIA, Aviva and Prudential raised their premiums.
AIA raised its premiums by 2 per cent to 23 per cent, while Aviva raised its IP premiums by between 10 per cent and 25 per cent, and Prudential hiked its premiums by 8.8 per cent to 36.6 per cent.

The increases apply to IPs that cover private hospitals.
There are six IP insurers, and AXA may be the last one to revise premiums, as it began offering IPs only in May last year.

The Income and GE premium hikes come with some enhancements.
In the case of Income, they include increasing the IP's annual policy limit to $1 million, reducing by half the waiting period for a claim against congenital abnormalities, doubling the coverage of pregnancy complications, and including breast reconstruction after mastectomy and cosmetic surgery after an accident.

For GE, the annual policy limit will increase up to $1.5 million and the post-hospitalisation follow-up goes up to 180 days.

Mr Andrew Yeo, general manager of life and health at Income, said the need to lift IP premiums is a result of escalating claims costs.
Claims for IPs covering treatment in private hospitals have risen by 17 per cent a year in the past few years, faster than claims for that in public hospitals.

On Wednesday, Prudential announced a new claims and age- based pricing approach for the PRUshield extra A Premier rider of its IP covering private hospitals, effective from May 1.

Affected Prudential customers could see their rider's renewal premiums increase by up to three times.

Conversely, they will enjoy a 10 per cent discount on renewal premiums if there are no claims in the past three policy years .
Mr Andre Czanik, managing director of health insurance at AXA Insurance, said premiums for AXA Shield and its riders have been unchanged since its launch last year.

:)
 

Lewis.T

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Risk considerations

Before you decide to invest in the Nikko AM Singapore STI ETF or ABF Singapore Bond Index Fund through POSB Invest-Saver, you need to understand the risks and fees that come with investing in the ETFs, and be willing to accept that your principal amount may be at risk including the possible loss of the principal amount invested as this is not a capital guaranteed product.

Chiu no read?[/QUOTE]

Was it on the front page staring at me or in small wordings on a different tab?
 

akwl88

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4th year the loss will be around 44 %.

Total premium paid to date: 12404
Surrender value projected at 3.75% = 6924

I think my policy is one of the better ones, i see the new limited pay series, the benefit illustration not so good already.

You see from original BI or latest BI?
 

akwl88

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Risk considerations

Before you decide to invest in the Nikko AM Singapore STI ETF or ABF Singapore Bond Index Fund through POSB Invest-Saver, you need to understand the risks and fees that come with investing in the ETFs, and be willing to accept that your principal amount may be at risk including the possible loss of the principal amount invested as this is not a capital guaranteed product.

Chiu no read?

Was it on the front page staring at me or in small wordings on a different tab?[/QUOTE]

Not sure u trolling or what

I can find within 10s of scrolling down on hp
 

akwl88

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Term also behave the same way actually.
just that the you pay lesser, so ends up lesser goes to commission.

No returns for term. Its an expense, albeit a necessary and value for money one.
 

OngHuatHuat

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You see from original BI or latest BI?

Latest BI not available until 16th of April.

in fact my current surrender value is higher than what was projected @3.75% return initially. So i think that surrender value is a very good approximation.
 

Perisher

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I don't know how it was sold I was still learning basic math back then. I was talking about current endowments in general.



Can't comment, not sure how the agent sold it to him.



Really? I'm looking at this page now, I haven't found anything remotely close to what you said after a minute of looking.
https://www.posb.com.sg/personal/la...ml?pid=sg-posb-vanity-investments-investsaver
It's at the page, how to apply, in your link,
Before you decide to invest in the Nikko AM Singapore STI ETF or ABF Singapore Bond Index Fund through POSB Invest-Saver, you need to understand the risks and fees that come with investing in the ETFs, and be willing to accept that your principal amount may be at risk including the possible loss of the principal amount invested as this is not a capital guaranteed product.

Took me like a few seconds? Then again, if it's me, I would rather it be at the forefront of all investment products. Which brings back the question, why doesn't insurance company selling investment-linked products putting it big bold on the first page on all those policies?

The thing is his riders were almost standalone plans by themselves. The premium waiver riders I'm talking about are a fraction of the cost of his riders.



It is different, because you don't know how much you will make otherwise until the end of the policy, where SSB straight up tells you regardless of what happens you get this amount.
Basically saying the returns are the difference as mentioned before.


Yes SSB still continues but doesn't add value. We pay up the rest of the plan for him. It's a pretty big diff.
Like I mentioned, it's the biggest difference.



I have no claims detail for this, but like I said it is a fraction of the cost. For plan that requires you to put in $2400 for 20 years, the waiver riders (both early and critical) cost $54.76 a year.
If that's the case for the illness coverage, then it's the single biggest difference vs SSB.

But still when we break it down this way, we can tell that it's comparable.

The difference still comes down to 2 things as I mentioned before,
1. Returns, 0 to higher than SSB returns or fixed returns.
2. illness coverage for a rider fee vs no illness coverage.

I still fail to see why this 2 can't be compared?
 
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