Jumpstarting Your Savings – The Business Times
For most of us Singaporean, a huge part of our lifetime is spent working and trading valuable time for money. At the end of the day, we would like to put the funds we have accumulated into financial instruments that we can work hard for us, ideally something that is safe and able to counter inflation.
Amid the current low-interest environment, it can be challenging for us to find such instruments that are low risks and able to generate such returns to match the rising cost of living. While putting your money into bank’s fixed deposits, CPF, or government savings bond are generally safe, the rate of returns may be lower than the inflation rate, thus eroding the value of the money.
Resale Endowment Policies
Resale Endowment Policies are existing endowment policies or commonly known as savings plan which have given up by the original policyholders. They are distributed by some of the largest insurance companies in Singapore. Instead of surrendering back to the insurance companies, these policies are legally assigned and sold to investors whom will become the new owners. These new owners will continue the remaining tenture to maturity and enjoy all the rights and monies of these policies.
You can buy time and jumpstart your savings
Now imagine a savings plan that is divided into two parts: the first part of the plan typically grows slower as this is the accumulation phase of the savings plan. Most of the investment in the initial years goes to pay for the expenses of the plan such as distribution costs. The second part of the plan i the part whereby the cash value in the plan really starts to build up at an accelerating rate due to the effects of compounding on the bonuses earned on the policy.
As compared with starting a brand new endowment policy, Resale Endowment Policies present you with the opportunity to jump straight to the second pat of the policy with a lump sum. You are now able to skip the slow growth accumulation phase and avoid paying for the costs of starting a brand new policy. As the duration to maturity has been significantly shortened, you can expect to receive the maturity pay out sooner and effectively jumpstarting your savings!
Achieve your life goals faster with higher certainty
Whether you are planning for your life goals such as retirement, your children’s education funding or simply to diversify your portfolio, the stable nature of resale endowment policies as well as the certainty of when the policy will mature, makes it a suitable instrument to be part of your portfolio that will help you to achieve your goals and gives you greater peace of mind.
Source: The Business Times, Shareinvestor, Wednesday, August 2, 2017.