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Anonymous
Considering between FWD, SingLife, Etiqa for endowment policies
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Pang Zhe Liang
27 May 2020
Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)
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Participating Policy
Generally, endowment savings plan are participating policies. As a result, your money is invested into the insurance company's participating fund. With this in mind, it will be good to understand on how a participating fund works.
More Details:
What is a Participating Fund
Smoothing of Bonuses
In order to give the same rate of returns to the policyholder, some of the insurance plans adopt the concept of smoothing of bonuses.
In essence, the insurance company will keep some of the profits made during the good years. This is opposed to giving out all as bonuses. During the poorer performing years, they will use the surplus to make up for the shortfall.
More Details:
Smoothing of Bonuses Singapore
For smoothing of bonuses to work, the insurance company's participating fund must have proper track records and returns over time. Otherwise, there is simply nothing much that the fund can give to its policyholder.
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