The GREAT Lifetime Payout 2 Special is a participating annuity plan that offers a comprehensive security package for you and your loved ones, including death and coverage against terminal illness.
With limited premium payments from as short as 3 years, the GREAT Lifetime Payout 2 Special gives you payouts for a lifetime.
Here’s our review of the GREAT Lifetime Payout 2 Special.
Read on.
My Review of the GREAT Lifetime Payout 2 Special
I think the Great Eastern GREAT Lifetime Payout 2 Special is a pretty decent annuity plan to provide you with income through your retirement.
It guarantees 100% of your principal after 6 years and consists of guaranteed and non-guaranteed monthly payouts with no medical underwriting needed.
This plan also has a short premium commitment of 3 years, with premium payments starting from $10,000 per year, which amounts to about $833,33 per month.
However, this policy has 2 notable limitations.
It lacks the total and permanent disability benefit, so you will not receive a lump sum payout when needed.
Also, it has no riders that can provide you with added protection.
On top of the lack of protection, it lacks flexibility in terms of features – something its competitors like the Prudential PRULifetime Income Plus and Singlife Flexi Income offer.
If you’re looking for a lifetime of annuity payouts, you’ll need to understand that the amount you get per month will be much less than an annuity that pays you for a fixed number of years.
Because of this, the participating funds need to be consistently performing well so that you get the highest possible monthly payouts.
This is where Manulife’s participating plans come in supreme, with Manulife Ready LifeIncome III being Manulife’s answer to lifetime annuity payouts.
We also considered Manulife’s Ready LifeIncome III as the best retirement plan for lifetime payouts, having a great balance between returns and its features.
However, if you’re looking for a no-frills policy with a lifetime of payouts, then Great Eastern’s GREAT Payout 2 Special policy could be a great choice.
Just know that as this will form part of your retirement income, you should spend extra time researching and comparing retirement plans to choose what’s best for you.
It’s also worth taking some time to get a second opinion from an unbiased financial advisor to understand if the GREAT Lifetime Payout 2 Special is for you or if there are better options out there.
If this is something you’re looking for, we partner with MAS-licensed financial advisors who has helped hundreds of our readers for their retirement planning needs.
Click here for a free, non-obligatory second opinion.
Let’s now break down what the GREAT Lifetime Payout 2 Special has to offer:
Criteria
- Premium payment term: 3 years
- Minimum Premium: $10,000 per annum
General Features
Policy Terms
The policy has a 3-year premium term, starting from $10,000 annually, payable in cash or Supplementary Retirement Scheme (SRS) funds.
The policy lasts your lifetime, giving you payouts as early as the 43rd month (3.5 years).
Protection
Death Benefit
In the event of insured’s death, the policy will offer a payout equivalent to 105% of all standard annual premiums paid plus any bonus sums incurred minus any debts.
Terminal Illness Benefit
This policy provides a lump sum payment upon confirmation of the life assured of having an illness with a terminal prognosis within 12 months.
Key Features
Lifetime Monthly Payout (AKA Survival Benefit)
The policy guarantees a lifetime monthly payout starting from the 43rd month (3.5 years) for as long as you live or until the plan is terminated or a claim is made, whichever is earlier.
Here is a table to illustrate the composition of the payout:
| Policy Month | Description |
| 43 to 48 months | The payout comprises monthly income or guaranteed survival benefit |
| From the 49th Month | Starting from the 4th policy anniversary, the monthly payout consists of 2 components;
|
You can withdraw the monthly payouts or reinvest them into the policy, where they can accrue non-guaranteed interest.
The table below illustrates how this benefit will be paid out:
| Policy Month | Standard Yearly Premium | Annualised Monthly Income |
|
43 to 48 months |
Below $30,000 | 3.15% of total standard yearly premiums |
| $30,000 and above | 3.28% of total standard yearly premiums | |
| From 49 years | Below $30,000 | 0.80% of total standard yearly premiums |
| $30,000 and above | 0.85% of total standard yearly premiums |
Policy premiums are reassessed yearly to suit the sum assured and may be discounted or subject to additional charges.
This annual premium is a key component in determining your insurance protection.
Surrender Value
Your policy will qualify for a surrender value after making premium payments for 3 consecutive years.
With this benefit, you can choose to cash out on the value of your policy at any point after that period.
Check your policy documents or talk to your financial advisor to find your surrender value.
Bonuses
The benefits of the plan are divided into guaranteed and non-guaranteed bonuses.
The declared bonuses fall under the guaranteed benefits, while future bonuses yet to be declared fall under the non-guaranteed benefits.
It is important to note that the non-guaranteed bonuses are subject to the performance of the participating fund.
There are 2 types of bonuses available under this plan;
Cash Bonus
A cash bonus is declared annually beginning policy year 4. It is a guaranteed payout that will be paid every month.
Terminal Bonus
A terminal bonus is paid once when there’s a claim or during policy surrender.
GREAT Lifetime Payout 2 Special Fund Performance
To ensure that your money is being invested wisely, analysing the following key indicators is important.
- Participating Fund’s asset allocation
- Annual investment performance
- Geometric net investment returns of par funds across life insurers in Singapore
- Total Expense Ratio
Premium Allocation
At a glance, here is the asset allocation of the participating fund as of December 2021:
| Type of Assets | Allocation Goals (%) | Actual Allocation (%) |
| Bonds | 66 | 61 |
| Loans | 4 | 3 |
| Equities | 20 | 23 |
| Properties | 10 | 8 |
| Cash & Equivalent | 0 | 5 |
| Total | 100 | 100 |
Past Fund Performance
As of December 2021, here is how the par funds have performed:
| 2019 | 2020 | 2021 | Average of last 3 years | Average of last 5 years | Average of last 10 years | |
| Investment Returns | 11.02% | 8.41% | 1.62% | 6.94% | 5.78% | 5.52% |
Looking at the above table, the par funds have demonstrated exceptional value over the 5 and 10 years with average annualised returns of 5.78% and 5.52%, respectively.
When looking at fund performance, it’s important to take the geometric average net returns and compare them across insurers.
Based on geometric averages, Great Eastern’s par funds are doing below average over long periods of time.
Total Expense Ratio
When considering investing in various mutual funds, it’s crucial to closely examine their total expense ratio, as the costs incurred in managing these investments can significantly affect your potential profits.
Here is a table featuring expense ratios for the GREAT Lifetime Payout 2 Special:
| 2019 | 2020 | 2021 | Average of last 3 years | Average of last 5 years | Average of last 10 years | |
| Investment Returns | 1.71% | 1.20% | 2.02% | 1.66% | 1.69% | 1.66% |
By comparing the funds’ total expense ratios, you can better understand which fund may be most cost-effective for your investment goals.
Additionally, below is a table that compares the total expense ratios of Great Eastern Life to other insurer’s par funds:
As observed, Great Eastern has kept its expense ratio below 2% for the 3 years, which could make it an attractive option for investors looking for a cost-effective solution.
GREAT Lifetime Payout 2 Special Fees and Charges
With GREAT Lifetime Payout 2 Special, you do not have to worry about additional or unexpected fees or charges, as they are included in your premiums.
An Illustration of How the GREAT Lifetime Payout 2 Special Works
As Janet approaches her 50th birthday, she is ready to plan for retirement.
She dreams of semi-retirement in just 5 years, followed by true retirement at age 70, but knows that preparation and investment are important.
With this goal in mind, she buys the GREAT Lifetime Payout 2 Special by committing $30,000 per year for 3 years with total premium payments totalling $90,000.
Here is a summary of Janet’s investment and payouts received over time:
| Event | Narration | Figures |
| Limited offer after 3.5 policy years
43 to 48 policy months |
Receives 6 guaranteed monthly payouts | $246 |
| From 49th Month | Continues to get the monthly payouts which comprise guaranteed and non-guaranteed payouts | $246 |
| At 60 years, Janet retires due to a health condition | Total payouts received | $19,188 |
| If she surrenders policy at 60 years | Total amount received | $94,171 |
Assumption IIRR of the participating fund is 4.25% p.a
Summary of GREAT Lifetime Payout 2 Special
| Cash and Cash Withdrawal Benefits | |
| Cash Value | Yes |
| Cash Withdrawals | Yes |
| Health and Insurance Coverage | |
| Death | Yes |
| Total Permanent Disability | No |
| Terminal Illness | Yes |
| Critical Illness | No |
| Early Critical Illness | No |
| Health and Insurance Coverage Multiplier | |
| Death | No |
| Total Permanent Disability | No |
| Terminal Illness | No |
| Critical Illness | No |
| Early Critical Illness | No |
| Optional Add-on Coverage | No |
