Do I really need endowment plans?

It will really depend on your needs. An endowment plan will lock up your money for a long time before giving you back the returns. But the returns from endowment plan is more or less secured and guranteed

Endowment policy is designed to be serviced and held long-term to maturity, in order to get the projected returns upon maturity. Giving up the policy early will lead to high termination charges deducted from the gross surrender value. If one had to give up the policy early due to financial constraints, then he/she will either surrender it to the insurer, or sell it to a traded insurance policies broker for a slighter higher cashback than net surrender value to reduce the loss.​​​

What is Your Goal?

You need to know what you want for your future and how to maximise the value of your money to help you reach your goal. For the most part, maximising the value of your money does not necessarily mean to increase the returns alone. Instead, it is about building a well-diversified financial portfolio that you can be confident with for the rest of your life.

Question of the Day:

While it is good to either do DIY investing or invest your money through professional guidance from global investment firms like Mercer, and BlackRock, the returns are always non-guaranteed. As a result, the question is,

"How confident are you to always live with non-guaranteed returns regardless of health?"

For instance, I may be down with a serious medical condition and requires full time and attention to focus on recovery. As a result, will I have the ability to continue monitoring my investment? Will dividend continue to be paid to me?

Risk Diversification

As much as we wish to stay healthy forever, reality remains a mystery. Therefore, endowment policies help to diversify part of these risk away.

In any case, there are various pros and cons associated with each instrument. Therefore, it is in your best interest to speak with an experienced professional who is able to share with you all the information that you need to help you make the right decision.

By the way, you may have a misconception with the returns generated by endowment policies. For the most part, @3.25% or @4.75% is not your investment return. Instead, it is the performance of the participating fund. Here is some information to help you understand better: https://www.blog.pzl.sg/what-is-a-participating...

All in all, spend quality time to decide how you want your future to be like. Ensure that all financial gaps are taken care of in a way that you can be confident to live with for the rest of your life.

Here is everything about me and what I do best.

Whether u need endowment plans depends in you. Endowment lock your money for a minimum of 10 years and insured you. It just another way of investing your future.
I personally classify endowment as a low risk illiquid. The interest idls also volatile based on the insured company performance

If u r look at stocks, Reits with 5% dividend outweigh endowment plans. Reits also have potential to increase its capital value. It is also liquid.
Same goes for corporate bonds that gives u about 4 % coupon rate. The least lock down is 5 years. Still bonds can be sold in the secondary market called stocks but may not be worth doing so.
If u r looking at alternative investment,robo advisors help u reinvest your dividends which works more similar to endowment. Robo advisors is more liquid than endowment and your performance is more transparent than endowment plans. However, if u are very emotional with the performance, I would recommend endowments plans.
P2p lending is another investment on smes. It is viewed as higher risk (than a bond in my opinion) and is a debt instrument. Although it is illiquid, it is more liquid than bonds and endowment plans. The lockdown of loans issued is between 1-12months and they paid monthly. The average annual return for p2p is 10%. It is another way to diversify your investment. You can either play passively and actively.

As you can see there is so much investment tools. Your job would be creating a portfolio based on your risk profile and capital. You are also free to try out every one of them