I am planning to buy a endowment insurance.
If im paying $105 monthly for 25 years @ interest rate of 3. 75% per annual.
On top of that i get cashback 5% of $15000 sum insured YEARLY from 2nd year to 24th year and 25th year i get 25% bonus of sum insured.
How much will i get back if i have the cashback reinvested?
The premium paid for this policy is $31,500 for 25 years
- $105/mth @ 3. 75% for 25 years is $50,741. 61
- 5% of $15,000 for 23 years is $17,250
- 25% of $15,000 on 25th year is $3,750
total pay out at maturity is $71,741. 61(rate of return appx 6. 2%)
I think you should find out more about this policy, some how dun think the return will be so high.
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If u reinvested the cashback, the maturity value will be higher. But i would like to highlight to you is that if you bought the endowment plan from an insurance agent, do not forget that a huge percentage of the first 3 years of the premiums paid to the plan is given to the agent as commission. Therefore, the maturity value of your endowment plan will not be so much as what the previous responder had calculated.
It would be better for u to invest your money in exchanged-traded funds using a discount online brokerage such as OptionsXpress so as to minimise the cost of investing your hard-earned money and also to get the best returns on your money.
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Hi there,
Before you go into the calculation, your need to consider 2 important questions:
1) Why do you want to buy an endowment?
2) When do you need your money back?
The reason for these 2 questions is to see whether you are looking for the right solution for your problem.
Endowment is a combined solution for people who want to have a protection for death and total permanent disability (TPD) while enjoying a high saving returns for a specific period (25 years for your case).
If you think you need your money back every year, then endowment is not for you, as the 5% cashback is assumed that you DO NOT take out the money until 25 years later, the average annual cash back will be 5%.
Further more, please note that you can only get the 25% maturity bonus if you don’t redraw any money during this 25 years, once you redraw any cash before maturity, you are unable to get this 25% bonus.
Therefore, do not enter an endowment if you are:
- Need money back every year.
- Don’t need any financial protection in the event of death, and TPD.
- Looking for very high return (should consider investment funds, of course also higher risk)
However, if you are willing to set a side amount of money for your mid – term savings, retirement and protection of death and TPD while enjoying a high yield but low risk return, the endowment is a good solution for you.
If you are looking for an endowment, the one that you mentioned in fact is not that attractive, I have the 18, 20 and 24 years endowments that only require to pay 12 years, and you almost can get back 200% upon maturity.
If you wish to know more, we can arrange for a discussion to see what endowment is most suitable for your condition and absolutely no obligations.
You can take a look of my profile at my website:
http://www. insuranceuniversity. com. sg/about-kerry. htm
Just simply drop me an email and I will help u to solve your problems.
Best regards,
Kerry
Always provide the right solutions
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