TM Infinite VIP

[(o.o)y]

Promised to post this short description in the other thread, but it was closed. So post it here. TM Infinite VIP is single premium plan designed for early retirement / wealth transfer / wealth preservation.

TM Infinite VIP provides a lifetime monthly income from 5th policy anniversary (after 5 years).

Key Benefits
- Monthly income for life after 5 years
- Begins with 80% guaranteed surrender value from day 1. If TM maintains its track record of not cutting bonuses, surrender value will reach 100% in 10 years. (breakeven)
- Ability to transfer ownership to next generation (wealth transfer)

Illustration
Male, A, age 40 buys into TM Infinite VIP, paying $533,400. At age 45, A receives $2000 a month income for his whole life.

At age 60, A decides to transfer ownership to his son, B. His son, B, continues to receive income for whole life. When B passes away, death benefit will be paid to B's beneficiaries.

In a nutshell, suitable for people who have money, looking for steady income, looking for capital preservation and of course risk adverse.

 

[badsector]

The first monthly Cash Benefit will start on the 5th policy anniversary. Each monthly Cash Benefit is 1/12 of the following:
(a) a guaranteed amount equivalent to 1.5% of the single premium; and
(b) a non-guaranteed dividend equivalent to 3.0%* of the single premium.

*Based on a projected investment rate of return of 4.75% p.a. on the Participating Fund.

not considered steady income mah

 

[sAVaGEmP5]

I took 533440 * 0.015 = 8001
8001 / 12 = 666.80/mth

Worth than CPF

 

[limster]

Illustration
Male, A, age 40 buys into TM Infinite VIP, paying $533,400. At age 45, A receives $2000 a month income for his whole life.

If I buy Dividend Warriors Portfolio with projected annual yield of 6% I will get $2667 dividends a month.
($533,400 x 6% = $32,004 a year = $2667 a month)

So the cost of buying this Infinite VIP plan is that I don't get dividends for 5 years after paying the lump sum, and thereafter, I pay the company $667 in management fees versus DIY?

Furthermore, DIY dividend portfolio, the dividends will increase over the years due to inflation or real earnings growth. (eg: REITs - rental rates will slowly increase). For the Infinite VIP policy, the dividend is forever fixed at $2,000. (at 5% inflation a year, in 20 years time, $2,000 won't be worth much).

Since I hold a few shares in the finance sector, I also salute the financial industry for thinking of ways to take money from people. This allow DIY investors who buy the bank/finance shares to benefit from increased profits.

Like I always say to bank officers trying to sell structured products, I hope you sell a lot so that the bank declares a bigger dividend this year.

 

[KeyboardWarrior]

Male, A, age 40 buys into TM Infinite VIP, paying $533,400. At age 45, A receives $2000 a month income for his whole life.

$2,000/month guaranteed?

 

[Shiny Things]

This is a terrible investment.

Let's compare it to a DW-style REIT portfolio.

If I buy $100 of a DW portfolio, then on day 1 I have a thing worth $100 and a (non-guaranteed) dividend stream that starts immediately.

If I buy $100 of this, then on day 1 I have a thing worth $80 (the surrender value) and a (non-guaranteed!) dividend stream that doesn't start for 5 years.

Please explain to me why I'd take Thing Two over Thing One.

 

[frenchbriefs]

dividend warrior portfolio can suffer major catastrophic losses...say PAP lose election in 2016.

dividends can also be cut anytime.

take the $2000 guaranteed cpf money.

plus 80% guaranteed surrender value to 100% value?talk

 

[aural]

$2,000/month guaranteed?

Nope. Not 100% guaranteed. 2k is based on projection of 4.75%

The guaranteed is abt 1/3 of the total value.

 

[limkopilimteh]

A non guaranteed annuity doesn't give a retiree much comfort...He still needs to worry when the payout will be cut...no different from worrying about when the dividends will be cut.

So what is the benefit of the annuity? Less chances of annuity being cut?

 

[o0KelviN0o]

Insurance companies should just stick to insurance

 

[limster]

Insurance companies should just stick to insurance

We need companies to think of new ways to take, er make money from people so that their profits and dividends can increase!



Disclaimer: Vested in finance shares, but don't think I have any ETF that holds Tokio marine though... If this VIP Infinte plan becomes popular, I may need to add Tokio Marine to my portfolio, eg: by international finance ETF.

 

[xsilkx]

Actually this plan is suitable for people who is not well versed in investment and people who is okay with the 1.5% interest rate or people who has low risk appetite. Cause upon reaching retirement age, some people would choose a plan which able to protect their capital.

In VIP infinite, the capital is definitely protected. >.< in the event of death.

The purpose of this plan is designed as an legacy plan. And people can buy for their children so some kids, you see why they have big allowance, maybe this is one of the reasons, which we never know right?

If you talking about break-even of this plan (guaranteed surrender value + guaranteed payout), it will take 20 years.

If you talk about TM sticking to their max payout, break-even takes only 7/8 years. So it is actually not bad as compared to many companies. Cause based on what I calculated all their plans are designed to break-even in the shortest period but this does not include whole life. I don't encourage people using whole life plan to break-even, I would rather ask you to do investment, be it ILP, stock, share, forex, which ever you want, those 100% will be faster break-even than whole life plan.

But do bear in mind that each year when the company declare it's bonus statement. this bonus becomes the guaranteed amount, so no way the company can take this away from you.

So in terms of retirement, this plan may not be the best plan. And no such things as the best plan haha. But to some people, it is a good plan and especially to people who has lump sum of money but they are unable to control themselves, then such plan will be able to help them to control their spending.

And maybe if that person has lots of money. and fear of losing it. This might be a good plan to them too. So it's all about different perspective.

And if any plan that increase the guaranteed payout each year or each very few year, the premium price will be quite high than the level payout.

So you are good in investment, keep it up. And put some of your profit in safe instrument, cause you never know what will happened.

 

[focus1974]

Talk more about Universal Life..
how can we tap on it to make more money.. ?