What is the difference between investing in a single premium endowment for 10 years and buying a government bond for the same period? Which is better?
The net yield in both cases should be quite similar, i.e. around 3.5% per annum.
The endowment provides some life insurance cover (but this is really quite insignificant). A part of the return is not guaranteed, so the actual return may be slightly higher or lower, depending on the future bonuses. If you terminate the policy before maturity, you are likely to suffer a loss.
The government bond gives a guaranteed yield and is risk free. You can sell the government bond at any time, based on its fair market price. There is no penalty. The dividends are paid to you every 6 months (which may or may not be an advantage to some investors).
I prefer government bonds due to its low cost, and its flexibility (i.e. not locked-in).
- ► 2013 (306)
- ► 2012 (1270)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1655)
02/03 - 02/10
- Managing risks
- Managing your personal risk
- Critical illness
- Dance: Giselle in the Park
- ICE - In case of emergency
- Is it necessary to have an adviser?
- A good time to invest in REITs?
- Investing in REITS
- Shopping Mall or MRT station
- Choose a good adviser
- Dividend paid from a Fund
- First Anniversary of this Blog
- Motor insurance claim
- Joke - Make a Will
- Keep invested in STI ETF
- Higher cost of Vivolife
- Future for Financial Advisers
- Medishield: Cheap and Good
- Actuary Joke: Walk half the distance
- Boosting the US economy
- Changes to CPF Investment Scheme
- Agent plays an important role
- Government bonds and endowment
- High cost Endowment Policy - Views
- CDOs being rated downwards
- Bangkok Skywalk
- Target of 1,000 visitors a day
- Invest CPF ordinary account in STI ETF
- Travel by BMW
- Useful information
- High cost Endowment Policy
- Dual currency investment (or deposit)
- Another perspective
- Lower upfront cost
- Minibond Series 35
- REITS with good yield and low price
- Buying a Shield plan
- Higher productivity in insurance sales
- Selecting Blue Chips
- Divident yield on STI Exchange Traded Fund
- Redeem whole life policy?
- Call and Put Options
- Single Premium Endowment
- Questionable sales practices
- Save in a period of inflation
- Use Medisave sparingly
- Medishield and Eldershield
- Savings for the short term and long term
- Impressions of Kuala Lumpur
- ▼ 02/03 - 02/10 (51)
- ► 2007 (1803)
- ► 2006 (696)
- ► 2005 (159)