Plan | Term | Yield p.a. | Reduction in yield |
Growth - single premuim | 5 yrs | 2.94% | |
Growth Link (AIM) - single premium | 30 yrs | 3.52% | 1.73% |
Revosave - monthly premium | 15 yrs | 2.82% | 2.43% |
The return on the growth plan is fairly satisfactory. The return for the other two plans are not attractive, considering the duration of investment. The are based on a projected yield of 5.25%. If the actual yield is lower, the yield on the policy will be lower than illustrated.
If you are investing for 10 years or longer, you should aim to get at least 4% per annum.
Tan Kin Lian
The yield for revosave is only 1.6% after 15 years.
ReplyDeleteDear Mr.Tan,
ReplyDeleteFrom your past experience in NTUC Income,could you roughly let me know the yield in percentage for the 3 nos.Growrh Fund which I've invested in Year 1996 and 1998.Both policies are still in force.
Thanks,
a hawker
Reply to 8:35 PM
ReplyDeletePlease send the benefit illustration for Revosave to me. Let me check if the yield is 1.6% or higher.
Dear all,
ReplyDeleteBelow are the benefit illustration and policy summary for the 4 newer products since 2008 for ntuc income. They are all based on 30 yr-old male customer.
Do note that all figures are projected and "hope for the best", unless stated unequivocally as Guaranteed.
For your reference and reading pleasure.
1. Vivolife $100K sum assured & pay for 20yrs
2. Revosave $50K sum assured & pay for 25yrs
3. Sail $50K single premium & tenor of 30yrs
4. Vivolink regular ILP $500/mth
The reduction in yield is way way shockingly high. I have seen some BI's just to keep up-to-date with the conman industry, and the sickening thing is that the longer you keep the policy, the higher the effect of deduction will be. Don't believe? Look at your policy and calculate the percentage taken away after 20yrs versus after 30yrs. There is no economy of scale, neither is there value to loyal customers. The longer you keep your par policy the bigger you get screwed.
ReplyDeleteLooking at the reduction in yield, might as well buy a $400K group term and dump the savings into STI ETF (reduction in yield of 0.4%). You are covered for an amount that lousy par policies cannot match, and have a better chance of growing your retirement monies.
Heck, even the 15-yr Temasek bond pays you 3.65% every year, guaranteed from year 1. And you know the Singapore govt will give you back your money at the end of 15yrs.
Hi Mr Tan,
ReplyDeleteDo you mean a single premium Growth Plan with term 5 years give a 2.94%pa? Is this yield possible now?
Last year, some insurers such as AIA and TM Asialife launched a single premium 5 years plan but gave a guaranteed yield of 2.5%pa only.
starlight
starlight,
ReplyDelete2.94% is projected and historically none of them ever delivered as projected. The probability of attaining 2.94% is about 5% in the future and the probability of giving only 2.5% is 95%.
It is NOT a good saving plan..it is only good to preserve your capital at best if the inflation is 2.5% if not 3.5%. Chances of real loss is 99.99%.. So , is it low risk? It is very risky if you are accumulating...almost sure loss.
Don't be conned...Know your objective and goal..Whatever you invest in should be approached from this perspective.
The Watchman
Hi The Watchman,
ReplyDeleteThanks for sharing.
So the 2.94%pa in Growth Plan is a projected yield. Anything projected is as good as not said. I never believe in projected values. For guaranteed values, I am still wary.
starlight
Growth plan for 5-yr tenor is only guaranteed 1%pa. Figures are printed in black & white in the benefit illustration.
ReplyDeleteProjected of up to 3%pa is just that -- projection only, and is probably a 3-sigma event.
In all probability of 95% confidence level, the return of the Growth Plan will be just 2%pa.
Why go thru all the trouble comparing all these rubbish con products? Just buy shares direct.
ReplyDeleteSPH / SingPost dividend- around 6% - 7%
Starhub dividend - around 9%
Singtel dividend - around 3%
All these can beat the insurance return hands down!
Okay some of you will argue that equity carry too much risk. Fine, you can still buy STI ETF (by either DBS or Streettrack). More diversified and still can give you decent returns beating most of these insurance junk.
If you are more adventurous, try the LionsGlobal Infinity Series offering S&P500, MSCI Global Index and the European Index. Cost is a bit higher but over longer term, should still offer decent return.
Hi Everyone,
ReplyDeleteCould anyone let me know the dividens for STI ETF (by either DBS or Streettrack...)
as I intended to buy some for long term investment,Thanks.
a hawker
A lot of con products are in the market and we expect the regulator to protect us but instead MAS is coming out guidelines to protect them than us. The insurance agents are getting bolder each day. Look at revosave or vivolife, they are but scams and the agents are pushing like they are approved by MAS. Worse they packaged them and sell them as buy one get one free. MAS , are you sleeping? Are you not protecting these rogues? You should know they disadvantage the buyers and yet you look the other way. WHY??? arrest them and fine the ceo.
ReplyDeleteThank you all.. I appreciate everyone's sharing of yields etc..
ReplyDeleteI thank Mr Tan for being very honest and his straight forward way of telling things as they are.
We are indeed fortunate in having such honest and factual contributions.
My best wishes to all of you.
Thank you.
Someone commented that the actual yield on Revosave is much less than the 2.82% that I have calculated (which I look at the benefit illustration). I like this person to send the benefit illustration to me to show his calculation.
ReplyDeleteAnyway, a yield of 2.82% over 15 years is not attractive.
Mr. Tan,
ReplyDeletethere is a revosave BI posted here among a few others, right?
This Revosave is $50K for 25 years. The return is still below 1.9%.