Endowment. No way. But why ?

Pay5, Wait5, Payout5

This is my first 15-year $100k endowment bought from GE in 2011. 

It was my first venture into buying 21 endowments journey.... And I am still buying more.

Lol. I heard from my agent that many queue at GE Centre @Pickering St to complain after GE declare their policies payouts cut !! 

It suffered a cut in maturity payout from $29,100 to $20,320 at Year-15 maturity year.

~~~

Year-11 to Year-14 (Guaranteed payout)

Year-11 to Year-14 is guaranteed at $29,100 annually from 2021 to 2024.

My 4th payout is this 7th Mar 2024, guaranteed at $29,100.


Year-15 in 2025

Even with the maturity payout cut/revised from $29,100 to $20,320.

~~~

XIRR downs

It's effective XIRR drops from 3.77% to 3.16% p.a. annualized return.


Effect: 

Still beat OA 2.5% p.a.

~~~~~

Paradox of buying endowment/annuity

1. I know how to invest. I would not invest in endowment. I sure can make.

2 Don't trust Endowments. The payouts are not guaranteed.

3. Endowments payout yield will not be even better than CPF OA 2.5%. I swear by my experience. Promise me 3%, 4%, some 8%!, I only get 2.+%!

4. Why lock your money in endowment for so long ? What if I need cash ?

~~~

My takeaway:

1. Choose your insurer properly. For me, I learn only to trust:

a. NTUC

b. GE

c. Tokio Marine

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