Will anyone recommend Great Eastern Prestige Life Rewards 3 (SGD)?

For leveraging, note that unlike paying down a house, only the interest is being paid off and not the principal. In this way the policy does not expire until you decide to surrender and pay off the outstanding loan balance which would depend on the surrender value at that time.

The leveraging option effectively aims to use the difference in payout and prevailing interest rates. (Note the interest rate is also floating and not fixed for any period)

It is similar to buying a property with guaranteed monthly rental from the 4th year onwards. There are definitely other tools out there but in terms of risk reward, they may be different. At the end of the day, the product must suit you.

HiHi,

hope you have not made your decision yet.

I just want to add a few things for your consideration,

1. Make sure the IRR (internal rate of returns %) calculations is made to you. That means the Returns based on the 80K that you put in. You would prob want to have the IRR at 15yrs, 20yrs. (you should have it upwards of 6.5% at least)

2. Yes, your risk is interest rate that may go up since you taking a leverage loan. Ask to show, at what interest rate will you get nothing in return. Not sure for your loan you can also pay down over time or just servicing the interest.

3. Lastly, look at your Exit strategy. On the policy, look at when you can Surrender the Policy with a Value that is $250K (better if this is guaranteed).
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