PruSave Limited Pay

Hi anon,

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In short

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1) Pros: A guaranteed minimum return, with potentially higher returns depending on Pru's par fund performance. Fuss free, risk free.

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Cons: You'll want to compare the numbers against other insurers' plans, since a plain vanilla saving plan is all about the numbers and which insurer can deliver a good return (guaranteed and non guaranteed) to you.

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2) You can't compare them. They have very different risk levels. One is practically risk free and the other has risks. Most people compare on returns, but they totally forget about risk. In reality, we should be looking at risk and then comparing assets with similar risks in terms of the returns you may get. Notice the use of 'may', because ultimately, if you take risk, there is this chance, no matter how small, that you will lose monies.

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So I don't think it's wrong to consider Prusave if it meets your needs for something safe and secure, to hedge away uncertainty in your investment portfolio. However, whether Prusave is the best plan for you amongst all other endowments on the market, is another question entirely. You might want to seek quotations from multiple insurers, or an IFA can help you run through the numbers.

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Good luck!

Endowments are for those who dont have the discipline to save towards a short term goal (e.g. education funds, car fund, etc). if you are clear about your own investments, simply buy minimum whole life and supplement with term, then invest the rest.