PRUDENTIAL SAVINGS SAGA

[Lewis.T]

You mean there is such a product?

Capital guaranteed endowments. Insurer does well due to market, you get additional as per 2012 and 2016 for Prudential.

Insurer loses money for the policy term, you get back your capital. a la the uncle in question for this thread.

 

[Perisher]

And I'm not neutral? Pretty sure if you look through my post history I do recommend investing on their own if a person has the discipline and can take the risks.

In fact I don't recommend any specific plan here because that would constitute marketing. I'm not allowed to. I can only generalize like buy a term, buy a hospitalization plan etc.

On the other hand ETF and SSB advice is spammed all over as the one size fits all solution here.

Just so you know I don't earn anything discussing stuff or posting my findings here.

ETF and SSB are much better option than endowment/ILP. Not a one size fit all but a better option. Only agents are here defending endowments or worse ILP.

 

[Perisher]

Capital guaranteed endowments.

Capital guaranteed endowment that pays better than SSB? Erm, which specific product actually did this

When market does well I want a share of it. When market plummets I want my capital to be guaranteed. I have 2.5k to invest for the next 20 years.

 

[Lewis.T]

ETF and SSB are much better option than endowment/ILP. Not a one size fit all but a better option. Only agents are here defending endowments or worse ILP.

Yes they are better in most cases, especially for people who view this forum as they are willing to learn and can handle risk better when they are equipped with the knowledge.

However what is happening here is this:

BTIR SSB and ETF. No questions asked about time horizon or risk profile or allocation.

Also not only agents here defend endowments/WL/ILP. Open your eyes a little. Usually these are the more experienced folk (older perhaps) that have been through several market cycles and see the value in such plans.

 

[OngHuatHuat]

He is just being sarcastic.

It is much easier to bash than to do detailed calculations or to find that specific product that suits your need. Just what I feel.
Anyway, I am not so into insurance nowadays after I have more and more confidence in stock and property market. I think investment insurance is there for people that are not so financial savvy.

The best product for common folks is still what the government able to offer: CPF. Too bad some people still think it is a form of tax. I view it merely as a tool for the government to take care of retirement and healthcare need. As I have mentioned before, it is pretty difficult to beat that 4 ++ % regardless of how market performs. If you have set up your cpf reserve, you will be more daring and less worried in your investment.

You mean there is such a product?

 

[Perisher]

Yes they are better in most cases, especially for people who view this forum as they are willing to learn and can handle risk better when they are equipped with the knowledge.

However what is happening here is this:

BTIR SSB and ETF. No questions asked about time horizon or risk profile or allocation.

Also not only agents here defend endowments/WL/ILP. Open your eyes a little. Usually these are the more experienced folk (older perhaps) that have been through several market cycles and see the value in such plans.

Can help me link to a few?

 

[Lewis.T]

Capital guaranteed endowment that pays better than SSB? Erm, which specific product actually did this

I'm not asking for pay better than SSB. I have a 20 or 30 or 40 year time horizon for example. I don't want the 1+% CAGR of an SSB because the duration is maximum 10 years.

I do not mind losing the 1+% guaranteed interest for a chance to ride the market and receive better returns over the time horizon. (Most people would want this)

However I'm also afraid of losing my money, because nobody wants to lose their money (Most people again).

 

[Perisher]

I'm not asking for pay better than SSB. I have a 20 or 30 or 40 year time horizon for example. I don't want the 1+% CAGR of an SSB because the duration is maximum 10 years.

I do not mind losing the 1+% guaranteed interest for a chance to ride the market and receive better returns over the time horizon. (Most people would want this)

However I'm also afraid of losing my money, because nobody wants to lose their money (Most people again).

A bit contradicting don't you think?

You say SSB is 1+%, do not mind losing the 1+%, but not asking for pay better than SSB?

 

[Lewis.T]

A bit contradicting don't you think?

You say SSB is 1+%, do not mind losing the 1+%, but not asking for pay better than SSB?

I mean guaranteed payout sorry. I'm not asking for a guaranteed payout of 1+%, I don't mind forgoing that for a possible 2-4% non-guaranteed returns.

 

[Perisher]

I mean guaranteed payout sorry. I'm not asking for a guaranteed payout of 1+%, I don't mind forgoing that for a possible 2-4% non-guaranteed returns.

They say don't mind but after 20+ years, result is lose money or 0 growth, then you see if they mind?

I think it's best to write it down in black and white and layman's term and emphasize that you say you don't mind earning nothing after 20+ years hor, don't come blame me 20+ years later.

Do you see my point of what clients actually want?

 

[OngHuatHuat]

The case here:
They are using savings product for protection purpose. That's why contributes to the low cash value of the policy. If they took away all
Riders, the situation would be much better.

They say don't mind but after 20+ years, result is lose money or 0 growth, then you see if they mind?

I think it's best to write it down in black and white and layman's term and emphasize that you say you don't mind earning nothing after 20+ years hor, don't come blame me 20+ years later.

Do you see my point of what clients actually want?

 

[OngHuatHuat]

Those Riders for CI etc carry no cash value.

 

[Perisher]

The case here:
They are using savings product for protection purpose. That's why contributes to the low cash value of the policy. If they took away all
Riders, the situation would be much better.

Agree. If they separate it instead of package it together, they won't end up thinking the way they did.

 

[Lewis.T]

Can help me link to a few?

http://forums.hardwarezone.com.sg/107352645-post68.html

Not directly defending anything, but this is a true neutral standpoint.

You'll be hard pressed to find people who directly defend endowments that are not agents because most of us haven't gone through a policy lifetime. I have clients who are very happy with their endowments bought way before my time.



If we were more neutral, why don't we post the negatives of STI ETF as well such as in this thread?

http://forums.hardwarezone.com.sg/98862346-post32.html
http://forums.hardwarezone.com.sg/98867476-post35.html
http://forums.hardwarezone.com.sg/98876967-post40.html
http://forums.hardwarezone.com.sg/98884931-post48.html
http://forums.hardwarezone.com.sg/98886415-post49.html
http://forums.hardwarezone.com.sg/98887887-post52.html

For SSB and ETF, we keep harping on the good points. When it comes to endowments suddenly no good points and only talk about the bad? What happened to neutral views?

 

[Perisher]

http://forums.hardwarezone.com.sg/107352645-post68.html

Not directly defending anything, but this is a true neutral standpoint.

You'll be hard pressed to find people who directly defend endowments that are not agents because most of us haven't gone through a policy lifetime. I have clients who are very happy with their endowments bought way before my time.



If we were more neutral, why don't we post the negatives of STI ETF as well such as in this thread?

http://forums.hardwarezone.com.sg/98862346-post32.html
http://forums.hardwarezone.com.sg/98867476-post35.html
http://forums.hardwarezone.com.sg/98876967-post40.html
http://forums.hardwarezone.com.sg/98884931-post48.html
http://forums.hardwarezone.com.sg/98886415-post49.html
http://forums.hardwarezone.com.sg/98887887-post52.html

For SSB and ETF, we keep harping on the good points. When it comes to endowments suddenly no good points and only talk about the bad? What happened to neutral views?

Eh, we know agents would harp on the good points yo. Do we need more of that?
Negatives are usually mentioned along with it for STI. And it's that the returns are not absolute. Usually advised with bonds+ETF to protect the downside.

 

[soneat]

With regards to this "Prudential Saga", what needs to be done is the PolicyHolder (or the son of that PolicyHolder) needs to sit down, read, think and examine what constitutes their Policy Contract, and to lay down all the collateral that they have and evaluate if they have been any material breach or misrepresentation on the part of the insurer or insurer's representative at that point in time. If they are unable to do that themselves, they need to get help from someone else that can spend the time, effort and energy to do that for them.

Decades ago, endowment was the fashionable financial product/tool, just like BTITR where I=ES3,.... is fashionable now. No one will be able to tell if 2 decades later if the I=ES3,....is the still the correct decision.

Having said above, I do agree the I=ES3,...Vanguard Index ETF....etc....makes sense now.

Financial well-being is personal. Individuals will have to be responsible for their own decisions.

 

[OngHuatHuat]

It is not sold in a package.

Ern, riders is what you chose to add, agents will explain to you what is the function of each rider then propose which one you need, but they won't tell you riders carry no cash value. Most of them don't even know how to derive that formula, they will just tell you must hold till maturity, half way withdraw hefty penalty.

I am not trying to defend anyone, but I think you all quarrel for the wrong reason. The correct title should be:
Are insurance riders necessary?
Or
How insurance riders affect your policy performance.

Or

Don't use savings/ investment insurance product for protection purpose.

I have removed many riders for my life insurance few years back after I do a detailed study on it. Now the performance is much better but you cannot assume other people will do the same too.

Agree. If they separate it instead of package it together, they won't end up thinking the way they did.

 

[OngHuatHuat]

Basically if you want more protection for your policy, you have to pay protection fee. You cannot simply compare 2 products like that, one without protection value one with protection value.
Let say your aim is to beat 2.5 % offered by some insurer based on premium paid and you are using Ssb to achieve it, your cannot simply have a return of 2.5 % per annum, you need to have a return that is higher than that. How much higher depending on your protection value and what you need for the protection.

 

[OngHuatHuat]

In real life, a lot of people(common folk) not people that whole day read money mind posts, they worry too much and they will add whatever riders that are proposed to them so that they are very well covered should anything happen to them. Nothing wrong with that, you want more protection, you pay for it. But the problem is, most agents, they are good at selling but not good at numbers, they are not the one that did the calculations behind. They will just add expensive riders to endowment plan rather than propose another term + accident combination for you.

Riders eat into your insurance investment returns. Take out your policy and see how much you are paying for them. All this carry no cash value at all!

 

[soneat]

It is not sold in a package.

Ern, riders is what you chose to add, agents will explain to you what is the function of each rider then propose which one you need, but they won't tell you riders carry no cash value. Most of them don't even know how to derive that formula, they will just tell you must hold till maturity, half way withdraw hefty penalty.

I am not trying to defend anyone, but I think you all quarrel for the wrong reason. The correct title should be:
Are insurance riders necessary?
Or
How insurance riders affect your policy performance.

Or

Don't use savings/ investment insurance product for protection purpose.

I have removed many riders for my life insurance few years back after I do a detailed study on it. Now the performance is much better but you cannot assume other people will do the same too.

I did that as well.

In my earlier years, a lot of riders were added. A few years on, I realised most of these riders aren't necessary (at all). At best, the riders are good to have but the premium is not worth it. After I chopped of the riders, even the lousiest policy I ever had (i.e. AIA Prime Life) is still "decent".