Endowment Policies

A savings plan with a payout over a period of years

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Endowment Policies
  • Asked by Anonymous

    Christopher Tan
    Christopher Tan, Executive Director at MoneyOwl Private limited

    Top Contributor (Jan)

    48 Answers, 93 Upvotes
    Answered 4w ago
    Dear anonymous, thank you for your question and sorry for the late reply. You are indeed a great saver! Assuming that the $15,000 is your emergency fund, I would encourage you to invest your $11,000 into a portfolio of low cost ETFs to get a higher return. Low cost = less than 0.5% p.a. in terms of management fee. As a start, here are a list of equities ETF you can consider: 1. SPDR S&P500 ETF - US, a proxy to develop markets 2. SPDR Straits Times Index ETF - Singapore market 3. Db x-trackers MSCI Pacific Ex Japan UCITS ETF - A proxy to Asia By investing in then, you will be broadly diversified across different geographical regions. There are enough studies to show that it is very difficult to beat the market by trading and there is really no need to. The driver of returns for stocks is earnings or profitability. As long as world population continues to grow (and it is!) and people have needs and companies continue to exist to meet the needs, stock prices will (and have) gone up over the long run. Yes, some companies will fail but most will continue to be around. That is why you should invest in a broad diversified portfolio.So stay invested. Do not get in and out based on views or news. That will be gambling. You are already doing well saving your money. But simply saving and not investing may not help you achieve your goals and also might not beat inflation rate. Hope this helps.
  • Asked by Anonymous

    Luke Ho
    Luke Ho, Money Maverick at Money Maverick
    153 Answers, 256 Upvotes
    Answered on 18 Jan 2019
    That's kind of the issue right there. 1) You read something somewhere that said not to do something, but didn't do something else. 2) Then you thought hinting would be a good idea. It's not. Say no. Tell her why. 3) She will then tell you why she's pushing it. Listen to it. You'd be surprised. There are a whole range of reasons. If she's a good FA, it's because she wants to help you and maybe she'll remind you of something YOU told her about your savings goals. In which case what you're doing clearly isn't enough, otherwise she wouldn't be pushing it. If she's a bad FA, she won't have a particularly good reason. Ask her to tell you the truth and emphasize why you're telling no. Then emphasize that this doesn't help your relatonship, and tell her to offer something you NEED. 4) If the lock up period is a problem, plans nowadays have a variety of flexible options. There's no savings plan for the sake of a savings plan - saving is NOT enjoyable NO MATTER where you put it. SPENDING money is fun, not saving it. But it remains a STATISTICAL fact thats UNCONTESTABLE that inflexible money makes more money. Even if you insist on ETFs, for example - taking it out just one or twice destroys your return record for a 5, 10 year period (causes a significant change. So if it meets an objective, why not? And if it doesn't, it means YOU dont care as much about the objective as you thought and YOU can tell her that much with a clean conscience. She'll get it from there.
  • Asked by Anonymous

    Loh Tat Tian
    Loh Tat Tian, Ex-Financial Advisor, Founder at Singapore Insurance Value Finding

    Top Contributor (Jan)

    228 Answers, 327 Upvotes
    Answered on 01 Jan 2019
    You may wish to consider a few places. 1) Resale / Traded Endowments in S$ (Singapore dollars). Make sure Absolute Assignment is made ( and assigned to you) when the person sell you their endowment policy. Pray that the person doesn't die, and it matures for higher internal rate of return. 2) Why do you think of parking in SRS? SRS is a tax relief tool more than investment. But for SRS, there a few things you can invest in, including SSB in feb 2019. 3) All endowments have insurance component, so its the same for the tranches offered by FWD and NTUC. however, their insurance component is really low, hence very little (negligible) cost of insurance, hence their rates can beat fixed deposit. You lose liquidity for the time required to be put inside only.
  • Asked by Anonymous

    Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund

    Top Contributor (Jan)

    329 Answers, 469 Upvotes
    Answered on 12 Nov 2018
    Learn to invest on your own. Why take the chance of having your funds locked up in an endowment that offers uninspiring returns? Not to mention costly funds that won't lead to something decent? Buying into a few reits and ssb may potentially offer something on par if not better, returns wise, with the option to liquidate without much costs. Do examine the reits to see if they fit what you are looking for before buying into them. Hope this helps
  • Asked by Anonymous

    Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund

    Top Contributor (Jan)

    329 Answers, 469 Upvotes
    Answered on 20 Sep 2018
    Well, it depends on one's needs. If a person has a very low risk appetite, likes to have "forced" savings and prefers a form of guaranteed returns, endowments would be suitable. Other than that, personally I don't really like endowments due to the long lock up period, medicore returns, and lost opportunity cost if I were to channel the funds towards my own portfolio instead.
  • Asked by Anonymous

    Yixiong Chang
    Yixiong Chang
    188 Answers, 244 Upvotes
    Answered on 05 Nov 2018
    Endowment plans are largely a savings plan with a small insurance factor to it. If you want it to be "low monthly premium", you just have to elect to save less, and thus a smaller eventually maturity value. You might be asking where is the highest return? In general the longer the saving period, the higher the net return. Also one with the lowest cost structure will be able to have higher returns (One that doesnt not pay commission to agents or any middlemen). For eg, you can take a look at FWD website, where they offer a 3 year endowment.
  • Asked by Anonymous

    Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund

    Top Contributor (Jan)

    329 Answers, 469 Upvotes
    Answered on 04 Oct 2018
    No it's not necessary.. Definitely not when the funds are locked up for so long period a time.. There are safer and more liquid ways to park your funds. Like Singapore savings bonds, or a bond Etf. These will give you about the same sort of returns as an endowment, plus minus a bit. There are also high interest rate accounts like citibank's maxi gain giving you about 2% or more at the end of one year (based on current rates where the base interest is 80% of one month sibor). If you have a larger risk appetite, a basket of s-reits yield a better return than an endowment. Hope this helps.
  • Asked by Anonymous

    Leong Wen Fong
    Leong Wen Fong, Economics and Management at University of London
    125 Answers, 290 Upvotes
    Answered on 02 Nov 2018
    Hi there! One thing you need to think about it how liquid you want your funds to be, and when you want to be able to use these funds. Also, di you already have some savings saved up for rainy days? If you don't have around 6 months worth of spare cash (based on your expenses), then you should start with that. Perhaps CIMB Fastsaver (1% int.) would be the most simple one. Alternatively you could go for DBS Multiplier or OCBC 360 savings, but these require salary crediting. You could also look into SSB. If you are investing for long term, and do not need the cash immediately, then go for STI ETFs, or REITs! These usually yield higher returns, but at a higher risk! Educate yourself before investing! Hope that helps!
  • Asked by Anonymous

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

    Top Contributor (Jan)

    277 Answers, 468 Upvotes
    Answered on 30 Oct 2018
    I think ultimately, the main concern is that people don't want to buy what they don't need, they're afraid they won't understand and get swindled, or it'll be a waste of money. It's very important to know what's important in life insurance and what risks you're planning to cover for. Clients may not be experts in products, but they can't go wrong with knowing what insurance does and how it protects them. Regarding independent advisors like myself, yes we do give a more comprehensive comparison between companies and have additional services that tied advisors may not have, but most insurance companies work the same way, it's a very competitive industry where they're all trying to one up the other. And there'll only be best for now, not best for always. Things change so its not horribly detrimental if your advisor is tied to one insurer.
  • Asked by Anonymous

    Soon Xiaohui
    Soon Xiaohui
    32 Answers, 102 Upvotes
    Answered on 28 Aug 2018
    Hello There, To be honest, it is depending on what is the purpose/objective for the plan? There is many alternative options. And premium term affects the overall ROI of the plans. Let me put this in a simple way: Paying a 20 years premium does not guarantee you will have a good return as every plan is designed & calculated differently. Sometime a short term premium (5 years premium) with a long duration (maybe 20 to 25 years of holding period) can give a much higher ROI however this is solely depending on your budget. But for someone who just started working, I would recommend you to look into your cash flow (expense), learn on how to manage it, create an emergency funds & saving up in alternate bank accounts (especially if you do not have a saving habit, time to build the habit). You may put partial of your saving into SSB while you learn more about endowment, investment. Please do not hurry and commit into a plan without understand its nature. If you really wish to speak privately, do feel free to pm via facebook~
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