COMMENT POSTED IN MY BLOG
Your FAQs are very informative. is the single endowment plan, Growth, by NTUC a good investment vehicle?
You have advised against any product with lock in. I notice that this Growth has lock in. To get the full return you have to keep it till maturity.
It may be considered a low risk but then its guaranteed component is very low especially in the early years and it is only 1.5% when it is held to maturity.
I think the investor is better off taking about the same risk with well diversified portfolio. Consider these two downsides, ie. long lock in period and low return, I won't recommend anyone investing in this product.
What is your view, Mr. Tan?
REPLY
Based on the current bonus rates, the Growth policy should give a return of 3% to 4% p.a. at the maturity date.
It is a good plan for a policyholder who does not wish to take investment risk, and is willing to invest for the full term. The upfront cost is low. The return on maturity has been quite fair.
For those who are prepared to take risk, it is better to invest in a well diversified fund.
Wednesday, August 1, 2007
Earn 4% in your CPF special account
Dear Mr Tan,
If the Growth Policy can return between 3%-4% do you think it is wise to invest your CPF Special Account in this product?
The Special Account gives a guaranteed 4% without the risk and no need to hold to maturity.
I have one NTUC agent persuading me to invest my special account in the Growth POlicy. Trying hard to convince me about the insurance, which is actually a personal insurance stripped of all other benefits. I am amazed by her argument.
REPLY
It is better to keep your money in the Special Account to earn 4% per annum, rather than invest in the Growth policy, which is likely to pay a lower return. You can get your life insurance by buying a low cost term insurance.
If the Growth Policy can return between 3%-4% do you think it is wise to invest your CPF Special Account in this product?
The Special Account gives a guaranteed 4% without the risk and no need to hold to maturity.
I have one NTUC agent persuading me to invest my special account in the Growth POlicy. Trying hard to convince me about the insurance, which is actually a personal insurance stripped of all other benefits. I am amazed by her argument.
REPLY
It is better to keep your money in the Special Account to earn 4% per annum, rather than invest in the Growth policy, which is likely to pay a lower return. You can get your life insurance by buying a low cost term insurance.
Buy term and invest in a low cost fund
COMMENT POSTED IN MY BLOG
I don't believe in cash value policies. I have only term from NTUC. They are cheap. I have no worry about keeping them. I can throw them away when the time comes without the feeling of loss.
I invest in the combined funds which are giving me good returns. I can move the investment whenever I like. I can use the profit to finance my term policies if I run into a crunch.
It is so flexible having two types of plan seperated. Don't fall for all those limited premium plans with fanciful names like LPPL living policy.
I don't believe in cash value policies. I have only term from NTUC. They are cheap. I have no worry about keeping them. I can throw them away when the time comes without the feeling of loss.
I invest in the combined funds which are giving me good returns. I can move the investment whenever I like. I can use the profit to finance my term policies if I run into a crunch.
It is so flexible having two types of plan seperated. Don't fall for all those limited premium plans with fanciful names like LPPL living policy.
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