Endowments are really bleaked & scary?

My email to Mr Ooi to give my comments on this Sunday INVEST article "Avoid buying unsuitable investment products" dated 16 Jul 2023.

Thank you for your above Sunday article in "INVEST" Section in The Straits Times.

I always enjoy following your Sunday INVEST articles.

May I share my opinion about what you shared.

1.  I have bought a total of 19 saving endowment policies, bought since 2011 at age 47.

2. They are a mixed of:
a. 7 x new endowments bought directly from insurers, amounting to:
Total premiums paid: $100k + $115k + $42k + $20k + $30k + $60k + $100k = $467k (fully paid from year 2011 to 2023)
 
b. 2 x new leveraged endowment policies from Great Eastern; Premier Life Generation series (PLG1 & PLG3), bought before 1 Jul 2021 (where MAS intervened in the endowment BI illustration).  Total premiums = $150k + $250k = $400k; of which cash paid was $42k + $73k = $115k

c. 9 x Traded Insurance policies which I started at age 57 in 2021. Total premiums paid = $$24k + $76k + $27k + $58k + $25k + $25k + $25k + $58k = $294k (add by yearly premiums).

d.  And I will continue to build up more in Resale Endowments within these 6 years, before I retire at planned age 65.

Total premiums invested = $876k to-date.

3. In year 2022, I started my streams of maturity payouts:
2022: $29.1k + $5.1k + $3.3k + $4.4k = $42k
(already collected from 5 policies payouts)

2023: $29.1k + $5.1k + $3.3k + $3.6k + $29.9k = $71k (already collected from 5 policies payouts)

From year 2024, my expected steady steam of passive income from these endowments are also expected to be from $40+k ~ $30k till age 85.

4. Interestingly, I will manage to leave a bequest sum of $650k at age 85.  Total accumulated payouts collected will be about $1.6M by age 85.

These are "my Ferrari Story" which I build up based on buying endowments.

5. Especially for Resale Endowment, because I am a regular Saver, I enjoy privileged relationship with TES Capital and Conservation Capital.  They give me high xirr of 5%; it certainly beats OA 2.5% interest.

6.  My takeaway as you earlier shared that endowments can augment our CPF-LIFE payout.  

I fully agree with you that building up layers of "Endowment Tap" to provide steady steam of passive income; even if projected maturity returns cut by 20%, the stream payout is still very substantial.

7.  Sorry for the long-winded background financial introduction.

~~~~

8.  In summary, I felt that your article gives a scary bleak prospect that endowment investment is not attractive, especially if one short-lived surrenders it.  

9. "My Ferrari Story" is a successful systematic "nibble" investment which I planned at age 47 and finally materialised from age 57.

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