Great Eastern’s GREAT Prime Rewards III is a single premium participating annuity plan that provides guaranteed financial payouts to secure your future in golden years.
The plan offers financial protection against unfortunate events such as death, terminal illness, total and permanent disability.
Here we have a comprehensive review of Great Eastern’s GREAT Prime Rewards III, including features, benefits, and any valuable information to help you decide if it’s the right option.
Premium Payment Options
The policy is a single premium payment option which means you can only make one lump sum payment at the commencement of the plan.
Because of this, monthly premium payments are not allowed, and you cannot change the premium rates midway.
Premiums start at $10,000.
This plan provides you with an option of 4 payout periods, with 2 policy terms – 15 or 20 years.
The policy terms include an accumulation period and payout period.
This means that the sum of your accumulation and payout period will either be 15 or 20 years.
The table below is a summary of the yearly payouts.
As you can see, (a) is a 15-year policy term with 5 years of accumulation and 10 years of payouts.
(b) has a policy term of 20 years with a payout period of 20 years and no accumulation period – meaning you begin getting your payouts at the end of the 1st policy year.
The Great Eastern GREAT Prime Rewards III provides you with a wide variety of features which are essential factors to consider when choosing an annuity plan.
The plan offers up to a 100% capital guarantee after the end of year 5.
With a guaranteed payout, you are assured of a stable income stream to cater to your needs during retirement.
Worth noting, the guaranteed benefits are already declared and are payable regardless of the performance of the participating funds.
The non-guaranteed benefits are bonuses to be earned in the future but not yet declared.
These depend on how the participating fund performs and are approved by the board before declaration and payment.
The non-guaranteed bonuses fall into 2 categories, cash and terminal bonuses. The cash bonus is first declared and becomes guaranteed before eventually being paid.
With the GREAT Prime Rewards III, you can get a one-time lump sum payment or terminal bonus after submitting a claim, maturity, or during the surrender.
Notably, the terminal bonus terms are reviewed every year.
The table below shows the actual investment mix and 2021’s strategic asset allocation for the participating fund on 31st December 2020.
Quite often, the performance of the participating fund depends on many factors, such as the rate of return, claims experience, and expenses incurred.
In this case, the investment rate of return has not been constant, as shown in the table below.
On the same note, the total expense ratio can significantly affect the eventual declaration of the non-guaranteed bonus.
The table below is an example of the previous expense ratio though it’s not an indication of future expenses.
The survival benefit also forms part of the annual payouts throughout the payout period.
It’s a guaranteed amount paid as a certain percentage of the single premium if you survive to the maturity of the policy year during the payout period.
The table below summarises the survival benefit payout percentages over different policy terms.
You may choose to withdraw the payment or allow the policy to keep and, in return, earn some interest at the non-guaranteed rate.
You can surrender your policy as long as you’ve made your premium payment. Early termination can be expensive.
Check with your financial advisor for the surrender value of your policy.
When death occurs, your beneficiaries will receive a lump-sum payment of;
- 110% of a single premium minus survival benefits previously paid or;
- The guaranteed surrender value of the policy, whichever is higher, including any terminal bonus.
Like most policies, the death benefit ends immediately after a claim.
Total and Permanent Disability Benefit
You will receive the death benefit as a single payment if you suffer from total and permanent disability or TPD.
There are 2 types of TPD covered under this policy;
i) Presumptive TPD
Presumptive TPD is applicable for the entire of the policy term and refers to a disability that occurs when you experience irrecoverable loss of;
- Sight in both your eyes,
- Unable to use two limbs
- Loss of sight on one year and unable to use one limb
ii) Other forms of TPD
Other forms of TPD are not presumptive and occur in the following situations.
- If you are above 15 years and suffer from a disability that causes incapacity to perform meaningful employment.
- If the assured is aged below 15 years and the TPD leads to confinement to a hospital or care facility where the child requires all-around attention for six months.
In both cases, the maximum claim payable for the TPD benefit is S$5,000,000.
Terminal Illness Benefit
Under this benefit, you will be paid a death benefit as a single amount or lump sum in case of a diagnosis with a terminal illness that can lead to death within 12 months.
However, the claim must be accompanied by a certification from an approved specialist and confirmed by a doctor and approved by the policy.
Subsequently, the TI benefit ends immediately after a claim. However, all debts owed to the policy are deducted before making a payment.
Summary Of Features And Benefits
|Cash and Cash Withdrawal Benefits|
|Cash withdrawal benefits||Available|
|Health and Insurance Coverage|
|Total Permanent Disability||Available|
|Critical Illness||Not available|
|Early Critical Illness||Not available|
|Health and Insurance Coverage Multiplier|
|Total Permanent Disability||Not available|
|Terminal Illness||Not available|
|Critical Illness||Not available|
|Early Critical Illness||Not available|
|Optional Add-on Riders||Not available|
|Lump-Sum Maturity Benefit||Available|
|Guaranteed and Non-guaranteed Benefits||Available|
Here we have an example to help you understand the policy much better.
John is a 35-year-old Personal Banker who plans on retiring when he hits 50 years. He also plans to start a small business at this age.
To get started, he signs up for the GREAT Prime Rewards III and chooses the 5+15 policy term.
This essentially means that he can accumulate the funds for 5 years and subsequently receive guaranteed payouts for 15 years.
Because the plan is a single premium payment annuity option, he pays a single premium of S$100,000.
At 40 years, the accumulation period comes to an end. After this, there are two payment options, as we shall see in the following scenarios.
John opts for the annual cash payout option. In this regard, he will receive S$9,800 each year for a period of 15 years.
The payout starts at the end of the 6th year. The total payout comprises guaranteed and non-guaranteed payouts of S$7,000 and S$2,800 respectively.
At 55 years, the policy ends, and by then, John will have received S$147,000, as highlighted in the table below.
|Total guaranteed payout (7000×15)||S$105,000|
|Total non-guaranteed payouts||S$42,000|
|Total payout amount||S$147,000|
|Single premium Increase||147%|
In the second scenario, John opts for the accumulation option where he doesn’t receive annual payouts but chooses to accumulate the yearly cash payouts and earn more interest.
At 55 years, John receives a total of S$175,732 as benefits. Here is a table to illustrate.
|Accumulated guaranteed portion (7000×15)||S$105,000|
|Accumulated non-guaranteed portion||S$42,000|
|Total payout amount||S$175,732|
|Single premium Increase||175.7%|
Notes: Numbers are based on a 35-year old male and non-smoker. As well, the non-guaranteed benefit is based on an IIRR of the participating fund at 4.25% p.a.
My Review on GREAT Prime Rewards III
Great Eastern’s GREAT Prime Rewards III is a good choice if you are looking for a policy that offers savings as well as insurance protection.
Its main objective is to provide you with stable returns in the form of guaranteed and non-guaranteed payouts.
A good thing about the GREAT Prime Rewards III is making your payments using SRS funds.
Another positive aspect of this plan is that it has had positive investment returns for their participating fund in the past years except in 2018 when it registered a negative.
On the flip side, the GREAT Premium Rewards III has some drawbacks.
For example, you can only receive your payouts annually since there’s no option for monthly payments.
Comparing GREAT Prime Rewards III With Other Plans
Here, we have a comparison of Great Eastern’s GREAT Prime Rewards III with other plans.
- Entry Age, premium payment term,, and accumulation period less than or equal to 80 ANB
- Additional payout plus basic monthly payout
- All policies payable in cash
Like other plans, this policy has coverage such as the Death Benefit, TI, and TPD.
As this is a purely single premium plan, there are not many features that they can offer you to compete with other policies.
Overall, I personally feel that the Great Eastern GREAT Prime Rewards III is a good option if you’re looking for a single premium annuity policy.
Due to the stiff competition on the market, many companies have a plethora of annuity policies that cater to specific user needs.
As such, it’s important to compare different options before settling on a plan that will work out best for you.
We compared and listed them in our best retirement annuity plans in Singapore article.
If you’re still unsure, it’s always best to talk to an unbiased financial advisor.