Endowment Policies

A savings plan with a payout over a period of years

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Endowment Policies
  • Asked by Anonymous

    Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding
    265 Answers, 378 Upvotes
    Answered 18h ago
    I have done comparison before. Effectively locking the liquidity for 20-25 years, and getting 2.43% of growth seems very inefficient to me. Why not consider putting into your CPF SA for 4% returns to hit FRS, (since if you are about 25 years old, by 55 you can get your excess amount on top of FRS, out), tax relief of up to $7,000 for cash topup, or even topup your medisave to BHS (which also has tax relief)? If you require the money to be in cold, hard cash, you may even consider some universal life like Save3 TIQ which has a 6 years lock in period, at 3% interest, and can look for better deals after that? I would expect interest rate for banks to increase anyway for such a long time. For even for citibank maxi-gain account (which you may require $75,0000) but earns 70% of Sibor + 1.2%. Do review why you want to save so long, and earn a paltry interest in this case... (even DBS multiplier seems to have 2.2% which is so much flexible than the savings plan imho).
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Mar)

    503 Answers, 823 Upvotes
    Answered 1d ago
    Financial products are like medicine. If they're simple, getting them from whatever pharmacy really doesn't matter. But if it's a little complicated, you want to consult a doctor for detailed advice. Same thing here. Choose your doctor, not your hospital/pharmacy.
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Mar)

    503 Answers, 823 Upvotes
    Answered 2w ago
    If you require the cashflow and cannot commit to the plan, then it doesn't matter the return now does it. But if you are fine with the money being locked up because you have an emergency fund set aside and your insurance settled in worse case events, then you can just treat the endowment as a 25 yr non-coupon paying bond. It probably also generates a higher return than the high interest savings accounts provided by the banks without the additional frills/steps. But I'll need to confirm this if you're able to provide the projected maturity figure. At 4% per annum yield, the product would return you almost 50k from the 30k invested. To make back your 5k if you cancel today, your portfolio needs to return 55k in 20 years from the same 100/month. That's now a 8% per annum return you MUST generate to just break even from surrendering the policy. That means you must consistently do better than 8% to profit from the decision. Doable? Sure, but it doesn't come without it's risk.
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Mar)

    503 Answers, 823 Upvotes
    Answered on 18 Mar 2019
    How about you speak to an IFA and ask for a comparison? The answer will be different based on age, budget, type of endowment, length of premiums. If you'd like a comparison, you can message me. I represent almost all the insurers in Singapore.
  • Asked by Anonymous

    Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding
    265 Answers, 378 Upvotes
    Answered 2w ago
    Yes correct. Both are universal life as their base investment is in bonds. Other than time period, please read through the product summary / brochure for exclusion and Conditions since they do not pay interest for special conditions.
  • Asked by Huang Yixuan

    Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund
    425 Answers, 596 Upvotes
    Answered on 06 Oct 2018
    What is your purpose for signing into an endowment plan in the first place? Saving up for a big ticket item down the road? Retirement? Or just a form of "forced" savings? Personally, I won't recommend getting into endowments or any retail wealth management products out there, including ILPs/unit trusts/mutual funds. They cost too much to put in and you get paltry returns in the end. As alternatives to endowment plans, considering buying into Singapore Savings Bonds, or leaving a standing instruction to "force transfer" a sum of money each month into an account giving higher interest, such as POSB's SAYE, CIMB's FastSaver, or Citibank's Maxi Gain. You can also buy into a bond ETF through POSB's Invest Saver programme each month at minimally S$100. Hope this helps.
  • Asked by Anonymous

    Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Mar)

    503 Answers, 823 Upvotes
    Answered 3w ago
    There's barely any insurance on this. It's decent for something short term. Better than SSB at the moment for just 3 years.
  • Asked by Anonymous

    Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding
    265 Answers, 378 Upvotes
    Answered 4w ago
    There are many answers on this already. https://seedly.sg/questions/anyone-tried-etiqa-elastiq https://seedly.sg/questions/for-etiqa-elastiq-what-does-the-prevailing-rates-mean-is-it-like-a-sibor-rate https://seedly.sg/questions/any-thoughts-on-elastiq-as-a-means-to-grow-your-savings https://seedly.sg/questions/is-etiqa-elastiq-an-ilp Have fun reading it.
  • Asked by Anonymous

    Yixiong Chang
    Yixiong Chang
    207 Answers, 274 Upvotes
    Answered on 16 Mar 2019
    It just a loose reference to the interest rate environment at that time. The contract wrote ' the crediting rate will be determined by us based on the prevailing rate, subject to the minimum guaranteed crediting rate of 0% p.a '. So Technically they can set the rates at any percentage, or even zero if they like to. =D But there will lose them clients' monies. In reality what it means is just they will set the rates they deemed to be competitive (while they still can make money).
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