10 Best Endowment Plans in Singapore: [2023] Selections

10 Best Endowment Plans in Singapore: Short & Long-Term Plans

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best endowment plans singapore
singlife logo
Best Endowment Plan

Singlife MyLifeIncome III

singlife logo
Best Endowment Plan with Highest Guaranteed Returns

Singlife MyEasySaver II

manulife logo
Best Endowment Plan for Lifetime Payouts

Manulife’s Ready LifeIncome (III)

manulife logo
Best Endowment Plan for Lifetime Payouts (Option 2)

Manulife ReadyBuilder (II)

singlife logo
Best Supplementary Retirement Scheme (SRS) Endowment Plan
Singlife MyLifeIncome III
aia logo
Best Endowment Plan for Highest Cash Payouts

AIA’s Smart Flexi Rewards (II)

China Taiping logo
Best Endowment Plan for Highest Cash Payouts (Option 2)

China Taiping’s i-Cash (III)

manulife logo
Best Single Premium Endowment Plan

Manulife ReadyBuilder (II)

prudential logo
Most Flexible Endowment Plan

Prudential’s PRUActive Saver III

manulife logo
Best Short- Term Endowment Plan

Manulife Goal 10

A plate of chicken rice costs $3.50 today, when 10 years ago, it was $2.50.

Things are getting more and more expensive, and with the upcoming increase in GST to 9%, we need all the help we can get where our money is concerned. 

Are you making your money work harder for you, or are you working harder for your money?

This might be where an endowment plan might be of interest to you. 

With an endowment, you set aside a sum of money with an insurer for them to invest for a period of time, with the expectation of getting back your capital with additional returns at the end of the plan.

There are many different endowment plans which serve a wide range of needs. 

For simplicity’s sake, this article’s focus is on endowments, also known as savings plans. 

Here’s our take on what to consider when selecting an insurance savings plan and the best endowments based on different criteria.

Comparison of the Best Endowment Plans in Singapore

InsurerPlan NamePolicy Term (Years)Premium Term (Years)Protection CoverageCash Payout Option?Cash Payout FrequencyWithdraw without penalty?Interest Rate Marketed*Other Notable FeaturesRiders available
NTUC IncomeGro Cash Flex10, 15, 20, 25, 30, or till age 120 (options dependent on premium term)5, 10, 15, 20, 25, 30105% of all net premium(s) and a terminal bonusYes; 3% of your sum assured and a non-guaranteed cash bonusAnnual, MonthlyNoup to 3.25% p.a.

– Premiums waived upon disability and a lump sum benefit of 2 years of annual premium will be paid

– Premium waiver for 6 months if retrenched

– Guaranteed insurability option at selected life events

Cancer Premium Waiver Rider
Gro Saver Flex10, 15, 20, 25, 30 years or till age 120SP, 5, 10, 15, 20, 25, 30105% of all net premium(s) paid or 101% of the cash value, whichever is higherNoNo
Gro Power Saver103

higher of:

(i) 105% of all net premiums paid and 100% of bonuses, or

(ii) cash value

NoNoup to 2.96%– Premiums waived upon disability and a lump sum benefit of 2 years of annual premium will be paid
Gro Sure Saver15 to 2515 to 25

(Death, TI & TPD)

Sum assured and bonuses

Yes; Guaranteed yearly cash benefit equal to 5% of your sum assuredAnnualNoup to 3.25% p.a.

– Hospital Cash Rider

– Premium Waiver Riders (Death, TPD, CI)

– Additional SA for death, disability, or CI

Luxe SolitaireTill age 120SP

higher of:

(i) 105% of net single premium and a non-guaranteed terminal bonus, less all monthly cash benefits and cash bonuses paid or

(ii) cash value

Yes; Guaranteed monthly cash benefit is 0.104% of the net single premium, while non-guaranteed monthly cash bonus is up to 0.20% of net single premiumMonthlyNoup to 3.25% p.a.

– Maturity benefit at the point of policy maturity when the original insured reaches 120 years old

– Minimum SP of $100,000

Not indicated
AIAAIA Smart Wealth Builder Seriesup to age 125SP, 5 and 10, 15 or 20

higher of

(i) 105% of total premiums paid or

(ii) 101% of the guaranteed cash value and any bonuses not surrendered

NoYes

– Perpetual plan (no maturity) but able to do withdrawals after certain number of years

– Capital guaranteed after a number of years (based on premium term)

– ECI/CI Premium Waiver Rider

– ECI Payor Benefit Rider

AIA Smart Flexi Rewards (II)15 to 30 years5

(Death Benefit only)

(i) higher of

(1) 101% of the total premiums paid (less coupons paid out), or

(2) guaranteed cash value,

and (ii) any bonuses or coupons which you have not surrendered

Yes; 5-yr premium term = 15% of insured amount from end of y2, 10-yr premium term = 30% of insured amount from end of y4, regular premium term = 40% of insured amount from end of y4AnnualNo

– Maturity payout

– Capital guaranteed at maturity (5- & 10-year pay only)

– ECI/CI Premium Waiver Rider

– ECI Payor Benefit Rider

20 to 3010
15 to 3015 to 30
AIA Smart Flexi Growth15 to 30 years5

(Death Benefit only)

(i) higher of

(1) 101% of the total premiums paid (less coupons paid out), or

(2) guaranteed cash value,

and (ii) any bonuses or coupons which you have not surrendered

NoNo– Capital guaranteed at maturity for 5- and 10-year pay plan

– ECI/CI Premium Waiver Rider

– ECI Payor Benefit Rider

20 to 3010
15 to 3015 to 30
PrudentialPRUActive Saver III10 to 30SP, 5 to 30

higher of:

(i) 105% of the total premiums paid up to time of death; or

(ii) 101% of the surrender value,

NoNo

– Maturity benefit

– Capital guaranteed at maturity

– CI/ECI Premium Waiver Rider

– Payor Benefit Rider

PRUWealth IIItill age 110SP, 5, 10, 15, 20

higher of:

(i) 105% of the total premiums paid up to time of death; or

(ii) 101% of the surrender value,

NoYes

– Perpetual plan (no maturity) but able to do withdrawals after certain number of years

– Capital guaranteed after a number of years (based on premium term)

– Premium waiver for 1 year upon death of loved one

– Defer premiums for up to 2 years if policy has sufficient value

– CI/ECI Premium Waiver Rider

– Payor Benefit Rider

PRUActive Cash15 to 255, 10, 15, 20 or 25

(Death) 

higher of:

(i) 105% of the total premiums paid up to time of death; or

(ii) 101% of the surrender value,

Yes; guaranteed yearly cash benefit payouts which is 3% of policy’s face valueAnnualNo

– CI/ECI Premium Waiver Rider

– Payor Benefit Rider

PRULifetime Income PlusWhole LifeSP

higher of:

(i) 101% of single premium; or

(ii) 101% of the surrender value as at the time of death, plus any cash benefit

Yes; monthly cash benefit from the 36th policy month onwardsMonthlyNo– Monthly payouts for lifeNot indicated
Singlife with AvivaMyChoiceSaver10 to 25 years or up to age 995, 10, 12, 15, 18, 20 or 25

higher of:

(i) 105% of the Total Premiums Paid for the basic plan; or

(ii) the Guaranteed Cash Surrender Value;

plus any reversionary and terminal bonus

NoNo

– Capital guaranteed

– Maturity benefit

– Additional payout for accidental death (100% of Sum Assured on the basic plan)

– 12 months waiver of interest in the event of unemployment or retrenchment

– Death, disability and TPD rider which pays out 10x of annual premium

– CI Premium Waiver Rider

– Payor Benefit Rider

MyEasySaver IISame as premium term12, 15, 18 or 25

higher of:

(i) 101% of the Total Premiums Paid for the basic plan; or

(ii) the Guaranteed Cash Surrender Value;

plus any reversionary and terminal bonus

Yes; yearly guaranteed cash payouts from the end of the 2nd policy year (5% of your sum assured)AnnualNo2.83%

– Maturity benefit is 160% of your sum assured, less all the payouts given

– Additional payout for accidental death (100% of Sum Assured on the basic plan)

– Death, disability and TPD rider which pays out 10x of annual premium

– Cancer Premium Waiver Rider

– Payor Benefit Rider

MyLifeIncome IIIWhole Life3, 5, 10, 15, 20 or 25

higher of:

(i) 101% of the Total Premiums Paid for the basic plan; or

(ii) the Guaranteed Cash Surrender Value;

plus any reversionary and terminal bonus

Yes; yearly income of up to 5.6% of SA = Guaranteed Cash Benefit (1.2% of SA) plus Cash Bonus (up to 4.4% of SA)

Accumulation period (number of years before payouts start once policy ends): 0 to 20 years, available options depend on premium term

AnnualYes, for reinvested yearly payouts and booster bonus

– Booster Bonus that is 0.35% of Sum Assured, will increase your yearly payouts starting from your 21st income payout or when you turn 60

– Capital guaranteed after certain number of years (depends on selected policy term)

– Death, disability and TPD rider which pays out 10x of annual premium

– Cancer Premium Waiver Rider

– Payor Benefit Rider

AXASavvySaver II15, 18, 21 or 24Same as policy term

(Death & TI)

Higher of:

(i)101% of the total premium paid on the basic plan; or

(ii) total surrender value;

plus accumulated cash payouts

Yes; annual guaranteed payout at end of 2nd year, up to 5.50% of SAAnnualYes, able to withdraw accumulated cash payouts if required

– CI/TPD Rider

– Payor Benefit Rider (death, TPD, CI)

Great EasternGREAT Flexi Goal15, 2015, 20

(Death, TI and Disability)

higher of:

(i) 105% of total premiums paid; or

(ii) guaranteed surrender value

NoNoup to 3%– Capital guaranteed at maturity for limited pay plansNot indicated
GREAT Wealth Multiplier IIup to age 1205, 10, 15

(Death, TI and Disability)

(a) 110% of the total premium paid; or

(b) the guaranteed surrender value

NoYes

– Multiplied returns of up to 7X

– Capital guaranteed after a certain number of years based on premium term

– Selected premium waiver riders with retrenchment benefits
GREAT Lifetime Payout 2Whole Life3

(Death & TI)

Lump sum benefit of 105% of the total annual premiums

paid plus any bonuses

Yes; payouts from the 4th policy anniversary with guaranteed payout (up to 0.85% pa) and non-guaranteed payout (up to 2.43% pa)Monthly – Capital guaranteed from end of 6th policy yearNot indicated
GREAT Prime Rewards 315, 20SP

(Death, Disability & TI)

higher of:

(i) 110% of single premium less survival benefits already paid; or

(ii) the guaranteed surrender value of the policy

Yes; annual payout for 10, 15, 17 or 20 yearsAnnualYes, able to withdraw any accumulated annual income and bonuses from income– Capital guaranteed at end of 5th policy yearNot indicated
Prestige Life Rewards 5 Special (only available till 31 July 2022)Whole LifeSP

(Death & Disability)

Coverage varies across age bands

Yes; guaranteed monthly payouts for life starting from 19th to 24th policy month at 3.35% p.a. of the SPMonthlyNo– Surrender value of 80% of the premium paid from day oneNot indicated
China Taipingi-Cash (III)to age 855, 10

(Death)

higher of:

(i) guaranteed surrender value or

(ii) 105% of total premiums paid plus non-guaranteed terminal dividend

Yes; guaranteed yearly cashback equivalent to 1.0% and a non-guaranteed yearly cash dividend of up to 7.2% of basic sum assured from end of premium termAnnualNo

– Maturity benefit at 85

– Capital guaranteed

Not indicated
i-Saver882

(Death)

105% of the total yearly premiums paid and a non-guaranteed bonus

NoNoup to 3.13% pa– Capital guaranteed at maturityNot Indicated
i-WealthSaver10, 15, 20 or 25SP, 5, 10, 15 or 20

(Death)

higher of:

(i) 105% of the total premiums paid ; or

(ii) 101% of Guaranteed Surrender Value;

plus reversionary bonus and non-guaranteed terminal bonus

NoNoup to 3.60% pa– Capital guaranteed as early as y5, dependent on premium termNot Indicated
ManulifeReady LifeIncome (III)up to age 1205,10

(Death & TI)

higher of

(i) 101% of the total premiums paid to date (less any advance premiums); or

(ii) the guaranteed surrender value;

plus any claim bonus and accumulated income and its interest

Yes; starts from end of policy year 5 or 10, boost in yearly income from policy year 25 onwardsAnnualNo

– Freeze premiums for up to 1 year

– Lump sum benefit if retrenched

– Premium waiver upon disability

Not indicated
Manulife GrowSecure16 or 185, 8 or 10

(Death & TI)

higher of:

(i) 105% of (the total premiums paid on the basic plan less any advance premiums paid, or

(ii) the guaranteed surrender value

plus any reversionary bonus and non-guaranteeed claim bonus

NoNo

– Capital guaranteed at maturity

– Premium waiver upon disability

– Premium freeze in times of need for 1 year

– Additional payout of 50% of total premiums paid to date in the event of accidental death

Not indicated
Manulife IncomeGenup to age 1203

(Death & TI)

higher of:

(i) 105% of (the total premiums paid on the basic plan less any advance premiums paid, or

(ii) the guaranteed surrender value

plus any non-guaranteeed claim bonus and monthly income which has built up interest

Yes; lifetime monthly income from end of 49th policy monthMonthlyYes, able to withdraw any accumulated annual income and bonuses from income

– Disability premium waiver

– Maturity Benefit at age 120

– Additional payout of 50% of total premiums paid to date on accidental death

Not indicated
Manulife Spring (II)123, 6

(Death, Disability & TI)

higher of:

(i) 105% of (the total premiums paid on the basic plan less any advance premiums paid, or

(ii) the guaranteed surrender value

plus any non-guaranteeed claim bonus, reversionary bonus, and GCB which has built up interest

Yes; yearly cash benefits from end of 3rd or 6th policy yearAnnualYes, able to withdraw any accumulated annual income and bonuses from incomeup to 2.87% pa

– Capital guaranteed at maturity

– Off set premiums with guaranteed cash payouts

Not indicated
ReadyBuilder (II)Whole LifeSP, 5, 10, 15, 20

(Death & TI)

higher of:

(i) 105% of the premium paid; or

(ii) 101% of the total surrender value

NoYes

– Perpertual plan (no maturity) but able to withdraw

– Freeze premiums for up to 1 year

– Lump sum benefit if retrenched

– Premium waiver upon disability for regular premium policies

Not indicated
Tokio MarineTM Nest Egg II (Flexisaver)15 to 305, 10, 15

(Death & TI)

higher of

(i) 101% of the Total Annual Premiums paid less all Guaranteed Monthly Cash Payout paid, or

(ii) the amount equivalent to 12 Guaranteed Monthly Cash Payout

plus non-guaranteed terminal dividend and any accumulated cash benefit with interest

Yes; monthly cash benefit with guaranteed and non-guaranteed portion

Payout duration from 10, 15 or 20 years

MonthlyNo– Capital guaranteed upon start of monthly payouts

– CI, ECI, Cancer Premium Waiver Rider

– Payor Benefit Rider

TM Nest Egg II (Cashback 8/10)10, 122

(Death)

101% of the total annual premiums paid

Yes; starting from the 2nd policy anniversary

8-year: 8% of sum assured

10-year: 10% of sum assured

AnnualYes, able to withdraw any accumulated annual income and bonuses from incomeup to 2.72%– guaranteed benefit of up to 140% of the Sum Assured, plus a non-guaranteed bonusNot indicated
 
*Some insurers indicate a rough projection of the interest rates you can earn on their product brochures. Do note that these rates are not guaranteed unless stated on the brochure.

Best Endowment Plan in Singapore

Personally, it would be very hard for me to name the best endowment plan because people purchase endowments for very different reasons, and there is no one endowment that is able to cater to everyone’s needs.

However, if you really had to press me, the one that comes closest to this title would be Singlife with Aviva’s MyLifeIncome III.

singlife with aviva logo

Singlife with Aviva’s My LifeIncome III

The reason is that it is a plan that provides cash payouts but also has no set maturity date, which would be able to cater to a range of different needs. 

With the cash payouts, you have the option to receive the payouts or let them accumulate to earn extra interest, based on your needs.

For those who are looking to just grow their monies, but have no set goal their saving for, they can hold the product as long as they require.

While for those who have a set goal they’re working towards, they can estimate the sum of money they require and at what age, and ensure that the premium they put in will get them this sum of money when they require based on the projections in the policy illustration.

Apart from the above, it comes with a decent range of premium terms.

And the feature that sets it apart from the others is the booster bonus of 0.35% of your SA which increases your payouts, helping to alleviate the impact of the rising cost of things.

Best Endowment Plan with Highest Guaranteed Returns

 

Prudential PRUActive Saver II

Singlife with Aviva MyChoiceSaver

GE GREAT Flexi Goal

AIA Smart Flexi Growth

Total Premiums

$37,500

$36,945

$37,500

$37,500

Guaranteed Return

$38,254

$38,000

$34,166

$33,750

Non-Guaranteed Return

$8,288

$7,654

$11,724

$11,675

Total Potential Returns

$46,542

$45,654

$45,890

$45,425

Illustrated returns @ 4.25% Illustrated Rate of Return for 30yo, Male, Non-Smoker, Regular Premium 15 year Plan, No Cash Payout

 

Prudential PRUActive Saver II

Singlife with Aviva MyChoiceSaver

Manulife GrowSecure*

AIA Smart Flexi Growth

NTUC Income Grow Saver Flex

Total Premiums

$50,000

$49,350

$49,949

$50,066

$50,000

Guaranteed Return

$54,248

$55,000

$51,902

$53,235

$53,019

Non-Guaranteed Return

$29,848

$25,286

$24,361

$29,990

$28,734

Total Potential Returns

$84,096

$80,286

$76,263

$83,225

$81,753

Illustrated returns @ 4.25% Illustrated Rate of Return for 30yo, Male, Non-Smoker; Limited Premium, Pay 10 years, 20 year Policy Term, No Cash Payout

*Note: Policy term is only 18 years, not 20 years.

I’ve tried to standardise the plans for comparison within the 2 tables above, but since most plans don’t have the same policy and premium term options, there will be some differences.

After analysing the 2, just a simple change in the policy and premium term affects the plan with the highest guaranteed returns. 

In fact, many factors including but not limited to your premium amount and term, your policy term, option for cash payouts, the insurer’s par fund performance, the distribution cost, and many others affect the overall returns on endowment plans. 

Therefore, it is inaccurate and difficult to qualify and name one specific plan to be crowned the plan with the highest guaranteed returns across all factors.

If getting a plan that will give you the highest return is your highest priority, it is more advisable to compare the policy illustration values for the plans you’ve shortlisted which are suited to your needs, instead of comparing the number marketed on the product brochures.

singlife with aviva logo

Singlife with Aviva’s MyEasySaver II

One honourary mention in this area is Singlife with Aviva’s MyEasySaver II, which actually commits to a lump sum guaranteed maturity payout of 160% of the sum assured, less all payouts, but including any bonuses. 

Most of the other plans don’t really advertise the amount of their guaranteed payout at maturity. 

The only other insurer who does this at the moment is Tokio Marine’s ™ Nest Egg II, which has a guaranteed maturity payout of 140% of sum assured.

Best Endowment Plan for Lifetime Payouts

One of the endowments that fits this bill and would give the “best” endowment (MyLifeIncome III) a run for its money is Manulife’s Ready LifeIncome (III).

manulife logo

Manulife’s Ready LifeIncome (III)

Like the former, it’s a plan that provides lifetime income, with no maturity date. However, if you wish to, you can surrender the plan early for its cash value. 

It boasts a premium waiver upon disability, a lump sum benefit upon retrenchment, and the option to freeze premiums for 1 year.

However, where it falls short of MyLifeIncome III is that it only has 2 premium term options, and its annual cash payout is only up to 3% of the SA (vs up to 5.6%).

manulife logo

Manulife’s ReadyBuilder (II)

Alternatively, if you do not care for the cash payout option for a whole life endowment, its sister plan, the Manulife ReadyBuilder (II) makes for a good option as well for a plan without maturity. 

This plan allows you to make partial withdrawals of the surrender value, without compromising on your capital after a certain number of years, based on your selected premium term.

Pick #1

Manulife’s Ready LifeIncome (III)

Pick #2

Manulife ReadyBuilder (II)

Best Supplementary Retirement Scheme (SRS) Endowment Plan

The supplementary retirement scheme is a voluntary savings scheme introduced by the government to help us ensure that we’re retirement ready.

You can utilise the money in your SRS to invest for your retirement as the interest in the SRS account leaves much to be desired.

Read more about SRS here.

singlife with aviva logo

Singlife with Aviva’s MyLifeIncome III

Once again, Singlife with Aviva’s MyLifeIncome III tops the table in this area.

What I like about this plan is that it’s a whole-life plan and with its cash payouts, you’re essentially guaranteed a retirement income for the rest of your life.

You can also choose your accumulation period with options up to 20 years. This allows you to choose to start your cash payouts at the age that you plan to retire.

What’s more, the additional booster bonus gives you the peace of mind that your monthly payouts can offset some of the effects of inflation.

However, what would have made the plan better would be the option to receive the payout on a monthly basis, but that’s just me being nitpicky.

Best Endowment Plan for Highest Cash Payouts

aia logo

AIA’s Smart Flexi Rewards (II)

If we’re comparing the insurance savings plans that provides cash payouts, AIA’s Smart Flexi Rewards (II) wins by a mile, giving you payouts as high as 40% of the insured amount starting from year 4. 

Premium and policy term-wise, the choices for AIA’s Smart Flexi Rewards (II) aren’t too shabby either. 

You can opt to go for a 5 or 10-year limited pay plan, or a regular payment plan (i.e. policy term = premium term). 

Do note that for the regular payment plan, capital is not guaranteed.

China Taiping logo

China Taiping’s i-Cash (III)

The next closest is China Taiping’s i-Cash (III) with the possibility to get up to 8.2% in cash dividends, of which only 1% is guaranteed.

Given that it’s in the insurer’s best interest to ensure that you get consistent returns (so that you don’t surrender), I’d feel pretty confident in getting these returns from China Taiping.

Pick #1

AIA’s Smart Flexi Rewards (II)

Pick #2

China Taiping’s i-Cash (III)

Best Single Premium Endowment Plan

As with all endowments, the best single premium plan depends on your needs. 

But if you have a lump sum of money set aside, and you don’t know what to do with it, then choosing an endowment which you can hold perpetually is a good choice. 

It allows you to keep your money inside for as long as possible and let compound interest do its work. 

Whereas if you choose a plan with a maturity date, if you don’t require the cash at maturity, you’ll need to search the market for another endowment again. 

You’d also want to have the option to access that cash value as soon as possible, just in case you need it. 

manulife logo

Manulife ReadyBuilder (II)

Out of all the plans that fit the above criteria, Manulife’s ReadyBuilder (II) would be my pick because it has an added retrenchment benefit lump sum payout. Do note that this benefit is only applicable to the first 5 policy years.

In this case, I did not consider plans with a cash payout as I assume that you’re investing the lump sum of money because you already have sufficient emergency funds set aside and do not need to supplement your income.

Most Flexible Endowment Plan

prudential logo

Prudential’s PRUActive Saver III

Let’s say you’re looking to save for a specific goal in the future, but the number of years to that goal isn’t a nice round number like 15 or 20 years, and you only want to receive the money in said year, no earlier and no later.

Or perhaps you’re looking to pay premiums for a certain number of years, like 6 or 13 years?

With Prudential’s PRUActive Saver III, you have the flexibility to pick and choose any permutation of policy and premium term which falls into the range offered, making it arguably one of the most flexible in this area.

Best Short-Term Endowment Plan

Name of Plan

Expected Returns

Policy Term

Minimum SP

Protection

Manulife Goal 10

3.54% (3.39% guaranteed)

2 years

10,000

101% of SP

NTUC Income Gro Capital Ease Eco

1.82% Guaranteed

3 years

10,000

105% of SP

China Taiping i-Save

1.8% Guaranteed

3 years

50,000

105% of SP

Etiqa Tiq 3-year Endowment 

2.3% Guaranteed

3 years

10,000

101% of SP

Great SP Series 7

2.3% Guaranteed

2 years

10,000

105% of SP

Last but not the least, short-term endowments. Looking at the short-term plans as shown above, the returns are generally similar.

manulife logo

Manulife Goal 10

But what stands out the most is the Manulife Goal 10 with 3.54% returns, 3.39% of which is guaranteed.

Now that’s some pretty good returns! 

Due to the nature of these short-term endowments, where they’re only available for a limited time or in limited amounts, at any one time, there are only 1 or 2 of such products across the market. 

Therefore, there’s no real need to compare the short-term endowment plans. 

If you have the spare cash set aside and you’re set on purchasing a short-term endowment, once there is one in the market, just go for it before it becomes oversubscribed.

But of course, short-term commitment is still a commitment, so only put in money that you don’t have an immediate need for.

Policy Term

Some endowment plans require you to park aside your money for a specified period of time, known as the policy term. 

This holding period should be considered carefully because if you were to surrender your plan early, you might incur losses and may not even get your initial capital back.

Once the policy matures, most endowments usually guarantee your capital at least. 

More details on your estimated maturity value can be found in the policy illustration, varying across companies and products.

Some plans offer a policy term in multiples of 5, while others let you select from a range of years giving you the flexibility to choose the specific age you want your plan to mature. 

If you’re saving up for a specific goal like children’s education, house upgrade, starting your own business, etc., consider selecting a plan with a policy term that ends closest to when you would need the money to maximise your returns. 

Apart from fixed maturity endowments, there are also whole-life endowments that only mature when you’re above 100 years old in the market.

These plans are usually designed for those looking to leave an estate for future generations.

Long- vs Short-Term Policy

In the past, endowment plans were long-term with minimum commitment periods of 10 years or more. 

But over the years, insurers have been launching short-term endowment plans with a term of 3 years or less. 

If you’ve no immediate need for your money but don’t want to lock your money for the long term, these short-term plans are worth considering, as they enjoy interest rates that are generally higher than the bank. 

Do note that these short-term endowments are usually launched on an ad-hoc basis with limited quantities, so the fastest fingers first.

Opting for a plan with a shorter term does come with a trade-off – which is that the returns may not be as attractive as a long-term plan. 

This is due to the concept of compound interest, where you earn interest on your interest. 

With this, generally the longer you hold an investment, the better your returns.

Premiums

Premium Amount

Endowment plans make your money work harder for you. 

But it’s not just about throwing all your cash on hand into an endowment product because as mentioned, an early surrender could lead to losses. 

The rule of thumb is to ensure that you’ve set aside emergency savings, usually 3 – 6 months of your annual income before you start investing. 

Remember to select a premium amount that is within your means. 

If you’re unable to finance your premiums, your plan will lapse, which could mean losing the premiums you’ve paid thus far.

Whether your budget is $100 or $100,000, there is a plan for everyone. 

Different products have different maximum and minimum premiums, so do take note of this.

Premium Term – Regular vs Single Premium

If you have a lump sum of money readily available, you can choose to pay your premiums in a single premium, and just leave your money to roll and accumulate.

But fret not, even if you don’t have a large sum of money set aside, you can still opt for regular premium plans, where you pay your premiums for a certain number of years. 

This premium term can be as long as your policy term or shorter. 

With a regular premium plan, you might also have the option to choose how often you’d like to pay premiums in a year. 

Premium frequency options range from annual, biannually, quarterly, or monthly.

If you find yourself living paycheck to paycheck, consider investing in a regular premium product, as a form of forced savings. 

While you enjoy life in the current moment, it’s good to pay your future self so that you can enjoy in the future as well.

Regardless of the premium term, the earlier you fully pay up your premiums, the longer time that your money has to grow.

Protection

Another name for endowment plans are insurance savings plans, and as their name suggests, there is an element of protection in endowments. 

Do note that the level of protection offered by endowments is not very high and is usually a percentage of the total premiums paid or the surrender value. 

This level of coverage is insufficient if it is your only life insurance policy. 

However, it is good if you are more focused on investment, but still want some coverage to complement your existing coverage.

If you’re looking for a protection plan, a whole life insurance or term life insurance plan might be better suited for your needs rather than an endowment plan.

Liquidity

Cash Payouts

For those who want to grow their monies, but also want to ensure some liquidity for small indulgences or to help you pay off your liabilities, some endowments come with a feature that provides you with cash payouts.

These payouts are usually a small percentage of your plan’s face value, often ranging between 3 – 5%. 

The face value is usually calculated based on a percentage of the total premiums you’re expected to pay and varies across plans.

Payouts are usually paid annually, but some plans might offer a monthly option.

These plans usually allow you to choose whether you want to receive the cash payouts or leave them in the plan to accumulate, letting you start or stop the payouts as and when you require.

There is a give and take if you do choose a plan with this feature, and that is that your returns may not be as high as a plan that does not provide payouts.

If you’re looking for cash payouts, although some endowment plans allow for this, they’re not designed for it.

You can consider getting an annuity policy instead if cash payouts are your thing.

Premium Loans

In the event that you really need the money urgently, but do not want to surrender your plan, some plans allow you to withdraw some money from your plan and take a premium loan.

Doing so might affect the long-term value of your plan as you’re reducing the value inside your plan, meaning that the interest you earn would not be as high. 

Most insurers will also charge interest on the loan that you take from your policy, which would need to be paid back. 

If not paid back, this interest will be deducted from your maturity payout at the end of your policy term.

If the interest incurred exceeds the surrender value in your plan, it will terminate and you would not get back anything, and lose your capital. 

So, if you do take a premium loan, do monitor it to minimise any possible losses.

Partial Withdrawal / Surrender

In rare cases, some plans offer you the option to partially surrender some of the cash value in your plan, without having to pay it back or incur an interest. 

Be careful not to mix up this option with the premium loan option. 

If you’re unsure, it’s always good to consult your financial advisor. If you don’t have one, we can always link you up with an advisor

A partial surrender will also affect the plan’s maturity value, so do consider all your options before you choose to exercise this option.

Expected Returns 

Participating Fund Performance

Insurance savings plans take part in the participating fund of the insurer. This fund invests in various instruments and assets which differ across insurers. 

Your premiums are pooled together and invested into this fund. 

Depending on the performance of the fund, bonuses would be declared and added to your plan, which makes up a portion of your returns.

Looking at an insurer’s par fund performance will give you a rough gauge of how likely they are to actualise the returns illustrated in the policy document, or perform better. 

However, do also note that past performance is never an indicator of future performance.

Guaranteed vs Non-Guaranteed Returns

In the illustration provided by the insurer, the cash value is split into 2 – a guaranteed and non-guaranteed portion. 

The guaranteed return is the minimum amount the insurer promises to return you if you surrender your plan or when your plan matures. 

The non-guaranteed portion provides an estimate of any additional returns that you might get from your plan but there is no full guarantee that you’ll receive this. 

It can be affected by the participating fund performance, expenses incurred, and the claims and surrender experience of all participating products under the insurer.

It’s recommended to take note of the guaranteed returns. 

At maturity, you’d want your guaranteed returns to at least be able to beat your maturity payout. 

After all, there is an opportunity cost if you choose to lock your money in an endowment instead of another investment instrument such as an investment-linked policy

If your guaranteed returns can’t beat your capital, your capital is at risk if the plan’s non-guaranteed returns are not realised.

A good rule of thumb is to check the policy/benefit illustration and check which year you’ll “breakeven” if any.

The breakeven year is determined by when your guaranteed returns are equal to your total premiums paid.

Others

Supplementary Benefits

Premium Waivers

Most plans allow you to add on premium waivers in the event of disability or critical illness at a nominal fee. 

It’s generally recommended to add these waivers to prevent your plan from lapsing in the event that you’re unable to work and fund your premiums due to disability or illness.

Not only do you lose your capital if your plan lapses, but you lose time as well. 

Personal Accident

You might also be able to add personal accident riders to your plan as well.

These riders usually cover medical bills and traditional Chinese medicine bills incurred due to accidents. 

Some might even cover certain illnesses like food poisoning and dengue fever.

For more details, refer to the policy document or ask your financial advisor.

Death/TPD/TI

As endowment plans are still insurance policies, coverage for death, TPD, and terminal illnesses shouldn’t be overlooked, although not the most important feature.
 
Most endowment plans only cover the higher of  100-110% of your premiums paid, or surrender value. Just be sure it does.
 
Otherwise, it almost defeats the purpose of getting an endowment plan as it’s supposed to serve as a form of capital protection unlike your typical investment plans.

Conclusion

It’s no secret. Insurance savings plans have received flak in terms of the returns they can achieve as compared to a pure investment product. 

This is in part due to the cost of distribution of these products and the protection coverage it provides, amongst other factors.

However, that doesn’t mean that it can’t have a place in our overall investment portfolio.

Endowment plans are generally lower in risk as compared to investing in stocksETFscryptocurrencies etc., and they generally guarantee your capital back plus more at maturity. 

Since the risk is lower, naturally, the returns would not be as attractive either. 

However, this makes for a good product to help you diversify your portfolio, or if you have a specific financial goal you’re working towards with a fixed deadline.

If your risk appetite is on the lower end, there’s also no shame in getting an endowment so that you can make your money work harder for you, without having to take on risks that you’re unwilling to accept.

Insurance savings plans are a tool to help us achieve our financial goals. 

All of our circumstances differ, so the road to realising our financial goals differ. 

The best endowment for me might not be the best for you.

Want to find out more about endowments and get advice on which is the best endowment plan for you? 

Speak to one of our unbiased, knowledgeable advisors who are well-versed in this area today!

Why Trust Us?

At Dollar Bureau, we’re committed to providing you with reliable, unbiased financial guidance. Our content is crafted by everyday Singaporeans who are trained in finance and insurance, ensuring relatable and practical guidance. We uphold strict editorial independence, regularly update our reviews, and value your feedback to keep our information accurate and relevant.

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Firdaus Syazwani
Firdaus Syazwani
Twenty years ago, Firdaus's mother bought an endowment plan from an insurance agent to gift him $20,000. However, after 20 years of paying premiums, Firdaus discovered that the policy was actually a whole life plan with a sum assured of $20,000, and they didn't receive any money back. This experience inspired Firdaus to create dollarbureau.com, so that others won't face the same problem of being misled or not understanding what they are purchasing – which he sees as a is a huge problem in the industry.

Disclaimer: Each article written obtained its information from reliable sources and should be purely used for informational purposes only. The information provided by Dollar Bureau and its affiliated parties is not meant to be construed as financial advice. Dollar Bureau shall not be held liable for any inaccuracies, mistakes, omissions, and losses incurred should you act upon any information listed on this website. We recommend readers to seek financial planning advice from qualified financial advisors. 

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