Posts
I have blogged about how I buy single premium endowment policies with my SRS money before.
The best product ever was the Guaranteed Rewards plan from UOB Life which unfortunately is no longer available.
That guaranteed 3% to 4% returns per annum over an 8 to 10 year period. Of course, there was a life insurance component as well.
A Guaranteed Rewards $20,000 endowment policy that matured 2 years ago became more than $30,000 after the 10 year period was up.
That was 4% compounded yearly over a 10 year period. Some might not agree with me but I feel that for a relatively stress free option, it was not too bad.
I have another Guaranteed Rewards policy that is going to mature soon. I think it is probably going to be next year.
In the meantime, I have a single premium endowment policy from AVIVA called Guaranteed XO which is maturing on 21 November 2013 after 8 years. This one has a guaranteed portion and a non-guaranteed portion which pays every 2 years.
I cannot remember exactly but the last three payouts were unimpressive. I was probably paid less than $800 in total.
In their latest advice to me, they did not say how much more I would be paid on top of the single premium of S$10,000 all of which would be returned to my SRS account.
Will I get a pleasant surprise in November?
Pleasant surprise or not, this is going to beef up my SRS account which is one of my 4 war chests.
Related posts:
1. Great Eastern Life paid me $4,000.
2. Customer service in insurance companies.
3. A war chest called "SRS".
Bloggy Award
8 comments:
Hi AK71,
Yes, UOB Life had pretty good products before they were sold to Prudential. I used to sell their plans too (I am a FA Rep) back then.
Perhaps you might to look at TM Life Plans. Currently, they are the only Life Insurer in Singapore with a track record of maintaining their bonus payout, for the past 65 years.
If you are keen to find out more, please feel free to email me at gerimegaly@yahoo.com.sg
Cheers!
James
Hi James,
Hey, thanks for the offer but I stop buying endowment and life policies. OK, I did buy a term life policy last year but that was because I bought a property and I wanted more coverage in case I meet with an untimely demise. ;p
No worries. I totally understand the "Buy Term & Invest the Rest" mindset...
However, as not all of us are "wired the same", some Endowment plans still offer decent returns, especially for those who have minimal risk appetites (provided the Insurer has a good proven track record, of course).
Life policies on the other hand have its own benefits, especially so when one is looking at legacy concerns...
In any case, cheers & continue the good work with your blog. I enjoy reading it!
Hi James,
Different strokes for different folks. I agree. :)
4% a year guaranteed, if still available today, is not bad for risk averse people looking for a relatively safe place to park their money.
Unfortunately, with the low interest rate environment that we have been experiencing (for the longest time), no Insurer is able to provide 4% Guaranteed Returns.
But if one is able to stretch the saving/investment period to a 15 year time-frame, then the returns can come close to 4% but maturity figures come with Guaranteed & Projected values combined. Having said that, this is where the track record of the Insurer's bonus payout comes into play. ;-)
Hi James,
Well, to be fair, a good track record is nice to have but it is no guarantee of future results. So, unless the returns are guaranteed, it is a no go for me.
The very last single premium endowment policy I bought a few years ago was from NTUC Income as I found that it had a large guaranteed portion and a small non-guaranteed portion. It was the Growth Plan. Unfortunately, it is no longer the case.
I will just have to hope that the majority of my investments is able to grow my wealth at a minimum rate of 5% per annum in the meantime.
I do understand that a track record means nothing but having been in this line for over 24yrs, I have personally seen how some Insurers, though exist for business reasons, do have a heart for the customer. They also try to maintain the consistency of their bonus rates, by stopping plans which were previously offering higher returns - especially when the market conditions do not support such high returns. And one such company is TM Life.
(I represented GE Life earlier in my career and currently represent AVIVA, AXA Life, Manulife, NTUC Income and TM Life).
Another thing which I would like to point out is that Bonuses paid out by Insurance companies are different from buying a Stock. When you make a paper gain on a Stock, it remains a paper gain, up and until you sell the stock, and realise the gain.
However, in projections shown in Quotations of Insurance Plans, what happens is that once a Bonus is declared, that particular year's bonus is no longer "Projected" but becomes Guaranteed. In other words, that amount is "locked-in", into the policy. So as the policy gains traction in years being in-forced, all the projected values once declared, become guaranteed.
Hi James,
Good points and well noted. :)
Post a Comment