[Premium] Picking up a Lifelong Income Plan

I’m buying a fixed income instrument through leverage. I can’t share the exact plan yet, but it’s a participating whole life plan which provides for lifelong income. I was hesitant on buying such an insurance plan, as I did my own sums and I know it takes around 8-10 years…

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10 comments

    1. It’s 6K after deducting borrowing costs. Few things in life are guaranteed but I will be receiving payouts for a lifetime. They may reduce along the way but that is true of every other plan out there.

  1. Have you considered maximising your CPF to FRS and choosing BRS at 55 yrs old? This will allow you to earn 4% on principle with almost no risk. Furthermore, money is protected from your creditors and will be distributed directly to nominees without the need for a will.

    1. By going with this private annuity, I can possibly opt-out of setting aside the CPF retirement sum. This will preserve the capital for future generations.

  2. Your distribution layout looks like capital depreciating type…

    There are many insurers offering life annuity plan but can be broadly classified into 2 types.

    1. Capital Depreciating Type
    2. Capital Preservating Type

    Hope yours is the latter. Anyway since we are on this subject, maybe I will just share what are some possible considerations when selecting a life annuity like the one you just sign up when comparing all similar choices of what’s available in the market.

    1. First day cash value
    2. Cashback Payout date Yr
    3. Guaranteed Annual Cash Back
    4. Additional Non Guaranteee Annual Cash back
    5. When does Guaranteed Surrender Value equals to premiums savings (cashback payout option)
    6. Growth of Guarantee Surrender Value (cashback payout option)
    7. Total Surrender Value (inclusive of non guaranteed surrender value)

    Factor 7 may not be as critical cos value will definately fluctuate because of insurers respective par fund performance, claim experiences , future expenses.

    Factor 8, cost of funds (if financing is involved. Actually apart from premium financing, portfolio financing may be another viable options with better flexibility and ownership)

    I just completed a simulation on 6 insurers life annuity plans. If you wish to have a copy for your personal reference to compare against what you have signed up, feel free to let me know… 🙂

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