Layered Endowments as Annuity
Using layered insurance endowments payouts as Annuity Income:
1. Previously INCOME and some insurers offer CLASSIC ANNUITY Plans for single premiums by cash or OA. And those days, BI payout illustration was based on higher Par Fund Performance as follows:
Before 1 Jul 2013:
4.75% to 5.25%
I managed to buy 5 new endowments during this BEST period.
After 1 Jul 2013:
3.25% to 4.75%
I managed to 4 new endowments during this period.
After 1 Jul 2021:
Now the BI Par Fund Performance projection is much lower at 3.00% to 4.25%.
Why Insurers lower than BI illustration ? Because MAS intervened to ensure its projection was based market Par Fund Performance conditions.
MAS intervened twice on 1Jul 19 and 1 Jul 21.
Since then, my opinion was that new endowments were not attractive anymore.
1. While one can argue that these are payout projections guidelines, insurers can pay more than these projection payout.
2. But again, which insurers would be so nice to pay much more than it projected in the policies. As far as I could remember, INCOME during Mr Tan Kin Lian ex-CEO days ever paid more its maturity payout through Bonus declaration for some 20-year policies.
3. These days after 1 Jul 23, I would buy other People's policies who surrendered. These are called Resale Endowments. Only annuity plans, not their whole life protection plans.
For Resale Endowments, I bought 10, even before 1 Jul 21.
4. I am no insurance agent.
~~~~
ILP Endowment
5. These days Insurers like AIA, Manulife, Prud offers ILP policies which tagged to Funds market price. Cash balances are withdrawal, Surrender Values are tagged to Marker Buy/Sell Prices of Policy Units held.
Many puke at ILPs, but it allows you to cash out your policies without Surrendering it. Dont need to incur interest payout as it is selling our Units held for Cash.
Those non-ILPs do not allow Cashout but have to surrender the policy or allow Policy cash loan but subject to high loan interest!!
Leveraged endowment
6. Other Insurers offer Leveraged policies like GE, Manulife and INCOME (recently). But all along, GE & Manulife offers such single Premiums plans.
I bought the GE PLG/PLR plans (PLG1 & PLG3). Those sold by ocbc are termed PLGs; while sold direct by GE as PLR series. Same same.
I bought the PLGs basically for my children’s lifetime annuity payout and high increasing Surrender Value when they chose to surrender the polcies. But you have to buy under their names, though you are Policy Holder.
Caveat: As policy owners, we try to fully pay up the loan balance; don't burden our children to takeover the loan balance, though you should be able to, I believe.
~~~~
How I fully pay up my children's PLG?
I bought another PLG3.
Let the Surrender Value SV grows and breakeven at ~Year-20, then
1. Previously INCOME and some insurers offer CLASSIC ANNUITY Plans for single premiums by cash or OA. And those days, BI payout illustration was based on higher Par Fund Performance as follows:
Before 1 Jul 2013:
4.75% to 5.25%
I managed to buy 5 new endowments during this BEST period.
After 1 Jul 2013:
3.25% to 4.75%
I managed to 4 new endowments during this period.
After 1 Jul 2021:
Now the BI Par Fund Performance projection is much lower at 3.00% to 4.25%.
Why Insurers lower than BI illustration ? Because MAS intervened to ensure its projection was based market Par Fund Performance conditions.
MAS intervened twice on 1Jul 19 and 1 Jul 21.
Since then, my opinion was that new endowments were not attractive anymore.
1. While one can argue that these are payout projections guidelines, insurers can pay more than these projection payout.
2. But again, which insurers would be so nice to pay much more than it projected in the policies. As far as I could remember, INCOME during Mr Tan Kin Lian ex-CEO days ever paid more its maturity payout through Bonus declaration for some 20-year policies.
3. These days after 1 Jul 23, I would buy other People's policies who surrendered. These are called Resale Endowments. Only annuity plans, not their whole life protection plans.
For Resale Endowments, I bought 10, even before 1 Jul 21.
4. I am no insurance agent.
~~~~
ILP Endowment
5. These days Insurers like AIA, Manulife, Prud offers ILP policies which tagged to Funds market price. Cash balances are withdrawal, Surrender Values are tagged to Marker Buy/Sell Prices of Policy Units held.
Many puke at ILPs, but it allows you to cash out your policies without Surrendering it. Dont need to incur interest payout as it is selling our Units held for Cash.
Those non-ILPs do not allow Cashout but have to surrender the policy or allow Policy cash loan but subject to high loan interest!!
Leveraged endowment
6. Other Insurers offer Leveraged policies like GE, Manulife and INCOME (recently). But all along, GE & Manulife offers such single Premiums plans.
I bought the GE PLG/PLR plans (PLG1 & PLG3). Those sold by ocbc are termed PLGs; while sold direct by GE as PLR series. Same same.
I bought the PLGs basically for my children’s lifetime annuity payout and high increasing Surrender Value when they chose to surrender the polcies. But you have to buy under their names, though you are Policy Holder.
Caveat: As policy owners, we try to fully pay up the loan balance; don't burden our children to takeover the loan balance, though you should be able to, I believe.
~~~~
How I fully pay up my children's PLG?
I bought another PLG3.
Let the Surrender Value SV grows and breakeven at ~Year-20, then
(1) surrender it to return and fully pay up their loan balance;
(2) earns monthly payout,
(3) provides increasing Death Coverage as Bequest.
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