Asked by Anonymous
Asked on 17 Mar 2019
Top Contributor (Jun)
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.
Best is always situational and ever changing. Products change, etc etc.
Though Save3 from TIQ just came out with a crediting rating of 3%, 6 years lock in period (7th year can Consider to take out), and lumpsum premium helps you to save on the sales charge of 1.2%.
Their Elastiq gives 2.02% with lock in period of 3 months, minimum $5k.
Other Endowments with 10 year lock In period typically can give yield of 2.5% up to 3% depending on RB, TB etc.
So shop around.
I recommend not buying endowment plan and opt for fixed deposits with a bank instead. Fixed deposits hold your money for 6 months to 3 years. Once the period of fixed deposit is over, you can deposit the rest in again to roll over the interest year after year and when added up, the returns is almost similar to an endowment insurance. You also have much shorter locked in period. Let's say you deposit your money for 12 months, and touch wood something unfortunate happens and you require that money, you only need to borrow for a short period of time, which you can do so with credit card balance transfers and cashlines(which have low interest rates) and then repay all of them once your fixed deposits are returned to you. You also have the choice of forfeiting the fixed deposit for no interest.
Endowment plan on the other end usually lock you in for 10 years and only give you a fixed returns, which if calculated to annual interest rate, is only slightly higher than fixed deposits. There is no liquidity in endowment plans at all, which means if you cancel the plan midway should you require the money, you will forfeit a sum of the premiums as penalty. The benefit of endowment plan however, is that it has the insurance element to it that covers death, terminal illness and permanent disability. You can treat endowment plans as a term insurance with a forced savings element.
19 Mar 2019