facebookShould everyone consider endowment plans? Why? - Seedly

Anonymous

15 Jun 2020

SeedlyTV

Should everyone consider endowment plans? Why?

I have some spare cash in my bank, and thought if I should consider an endowment plan. Any advice?

SeedlyTV S2E07

Discussion (2)

What are your thoughts?

Learn how to style your text

Elijah Lee

13 Jun 2020

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

An endowment plan will lock in your money for a pre-determined amount of time (unless it ia perpetual endowment, which will last as long as you live).

Consider if you are ok to have the money locked away before you start. Be aware that if you suddenly need the money, you will likely lose money if you do a surrender or partial surrender of the plan.

An endowment would be suitable for scenarios where you require a certain amount of money to be available without fail at a fixed point in time. That would be an endowment with a fixed maturity. Examples include

Nowadays, there are also endowments that keep growing perpetually and will allow you to surrender a part or the whole value of the plan at any time in the future. That is also a possible alternative to a fixed term endowment.

I would suggest that you speak to an advisor to determine if you even need an endowment in the first place. If you don't, there is no reason to lock up your money.

Pang Zhe Liang

26 May 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

Objective

Before you get an endowment plan, we need to first understand your objective. For example, it could be to fund your house, kids' expenses, or retirement. With a well-defined goal, we can evaluate whether an endowment plan is the right tool.

This is because we will need you to be able to commit throughout the policy period. Otherwise, an early surrender may lead to some losses.

Participating Fund

Meanwhile, it will be good to understand more about an endowment policy and what it invests in.

More Details:

What is a Participating Fund?

This gives us a better idea on how our money is growing.

On the whole, I will suggest for you to spend quality time to create a plan for your future. Thereafter, brainstorm and understand whether an endowment policy fits into your goals. When in need, speak to someone experienced who is able to mentor and guide you through this process.

I share quality content on estate planning and financial planning here.

Write your thoughts