High yield in the past years will not be repeated

Dear Mr. Tan,
NTUC has advertised its yield on endowment policies at about 6% per annum. This is attractive, compared to the low interest rate on fixed deposits. Will I be able to get this type of return in the future?

REPLY
The yield of 6% was obtained on the endowment policies bought 20 to 30 years ago, and matured this year. This high yield was possible due to:

a) High interest rate prior during 1970s and 1980s.
b) High return from the stock and property market
c) Low expenses in the past years

Going into the future, the yield should be much lower. I understand that the new products being sold today project a return of less than 2% per annum.

In the future, life insurance products will usually give a poor return due to:
a) A high proportion invested in low yielding bond
b) High expenses to pay agents commission and marketing

If you wish to have a higher return, you should invest in a low cost, diversified investment fund, as shown in this FAQ:
http://www.tankinlian.com/faq/savings.html