NTUC Foundation Policy - should I withdraw the encashment bonus?

I wish to withdraw the 18k (125%) bonus to pay off my uni fees. However, this would negate the bonus 25k SA on top of the 50k SA (original). What happens if I withdraw, will bonuses still accumulate in the future? Should I surrender this policy after withdrawing or convert to fully-paid up? Cause the SA is too little to cover life + it only lasts till when I'm 50.

I'm paying $60 per month for this. It has been around 20 years since my parent bought this.

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Duane Cheng

28 Jul 2020

Financial Consultant at Prudential Assurance Company Singapore

Hi there,

The foundation policy is quite an old policy with special benefits. The policy was created for 2 major life milestones, which is education and marriage.

You may encash the accumulated bonus for the purpose of the Life assured’s tertiary education and marriage. The policy will payout an enhanced discounted value of the accumulated bonus at a rate which is 25% more than the normal discounted value. It must be encashed within six months after marriage or entry into/graduation from a tertiary institution.

Do note that encashing the policy will affect the terminal bonus for this policy. If you have no problem funding your tertiary education at this point, it would be better to pay with current day cash, and let this policy reimburse you with interest in the future, at maturity or after graduation. If you convert your policy to a paid-up policy, you might not qualify for future bonuses.

The policy was never meant to provide you full insurance coverage for death, tpd or TI, it was designed to help you accumulate your funds using an endowment policy.

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