Asked by Jermyn Wee

I’m servicing endowment plan today for 100 dollars a month. It will mature in 15 years. Should I give up my endowment plan which my parents bought for me?

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  • Chua Jovantre
    Chua Jovantre
    Level 2. Rookie
    Answered on 29 Mar 2019

    Does your policy have a yearly cash back feature which you are entitled to take out? If so, you can consider taking out this cash back benefit and explore other avenues to put your money into. Ultimately, you still need to diversify your investment portfolio even if you are aiming for higher returns. And, safer alternatives like endowment policies and bonds makes up part of it.

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  • Jermyn Wee
    Jermyn Wee
    Level 3. Wonderkid
    Answered on 04 Mar 2019

    Thnks for your reply Gabriel.

    I think its because the interest they give is really quite bad. ANd i still have 15 years to pay for this plan. If i give it up i can use that to invest somehwere and get beter returns.

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    • Hariz Arthur Maloy
      It really depends on how long you have been paying for, the current surrender value and the IRR from today onwards. You'll have to do an opportunity cost calculation and break even rate on any investments you would replace this $100 with. The good thing about your endowment is at least it has guarantees and returns are predictable. Treat it like a bond. Speak to an advisor to see if it's worth it.
      04 Mar 2019
  • Gabriel Tham
    Gabriel Tham, Kenichi Tag Team Member at Tag Team
    Top Contributor

    Top Contributor (Apr)

    Level 8. Wizard
    Answered on 04 Mar 2019

    Why do you want to give it up?

    I think you can treat it as a long term savings. Returns are not fantastic but it helps you save up.

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