GE's Annual Cashback Endowment 25 (Series 2)

Any update on what you did with the policy?

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Have a similar GE policy 18, seems that the participating fund has been making losses so the surrender value is much lower than the guaranteed sum even though it's just 1 year to maturity, so it seems to make more sense to hold to maturity to get the guaranteed sum. A quick IRR calculation showed an estimated IRR of slightly over 2%. There are probably better endowment plans out there.

If you think that you can earn back the loss or even better if more that what you lost after you surrenderred the policy then why not ?

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Long term endownment is no longer popular because the projected returns ( even if it says 4.75% which rarely happen and usually the return will be the minumum valu of 3.25% ) . This is why you see more and more short term endowment plan which last for 2-5 years cropping up . Take note that you are also paying the agent fees , insurance company fees on top of the expense fees of the funds which eats up the return.

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Even now the fullerton Sgd Cash fund return about 4% pa and the latest Sg T-bonds 6 monthly return about 3.99%.

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More and more investment cash plus ( flexible ) platforms are opening up in Sg and even in future due to strong currency and Sg may be one of the Tiger Asian hubs of investment. So the offers, returns and also perks are much better than the endownment insurance plan.

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It is just a matter of time the long term insurance endownment plan will be wiped out and replaced by portfolio investment platform or self investment cash in bonds, cash plus platform.

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From my own experience, i surrendered my 25 years old policy early ( The policy scored return at that time was meagre 3.25% pa) and I lost about 10k but after a few years of my due dilligence investment ( cost effective investment ) , I was able to generate more than 4.75% pa and I did not have pay the agent fees and company insurance fees.

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Yes, you may consider this as a participating endowment policy. In detail, the premium that you pay is invested into the insurer's participating fund. Here is how it works:

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Read More: What is a Participating Fund Singapore

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Generally, yes, the return that you get consist of a guaranteed portion and a non-guaranteed portion - you may wish to obtain a revised policy illustration from the insurer to get the latest insight.

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In most cases, in order to reap the maximal return, you will need to hold onto the policy till its maturity - in this case, on year 25.

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Meanwhile, it is important to realise that the projected rates that you see in the policy illustration (i.e. 3.25% and 4.75%) are not your returns. Instead, for example, if the insurer's participating fund is able to achieve a return of 4.75% consistently over the defined period, then you will get the return as shown in the table. In order to know your effective yield, I will suggest you to use a financial calculator or to speak to your advisor to conduct a comprehensive review.

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Finally, in most cases, I won't suggest you to terminate the policy early. This is because as can be seen, an early termination will result in some losses. Hence, this is certainly not beneficial to you.

I am almost 20 years into the GE's 25- year endowment policy, and they revised their rates downwards in May 2023. The effect of their revision results in me getting 25k less when my endowment matures in 5 years time. Well they will say things about the guranteed and non-guaranteed portion.. but then I feel sad, I think I can do better if I manage my own investments rather than depend on some institution for my retirement.