Earn up to $26,000 more, compared to similar plans in the market
1. Purpose
This plan is for a policyholder to invest a lump sum using the savings in the Central Provident Fund, Supplementary Retirement Scheme, or in a bank account or fixed deposit. The policyholder can also top up the investments at any time.
The attractive features are:
- 100% of the lump sum is invested
- the lump sum is invested in a large, well diversified fund, to earn an attractive return
- the charges are among the lowest in the market
- sum assured of 125% of the savings, or value of investments (if higher)
2. What is the expected return?
The savings can be invested in one of several funds operated by NTUC Income.
For example, a popular fund is the Combined Growth Fund. It comprises of $3,800 million of investments, is invested in 900 quality investments, and is managed by 9 top fund managers globally. The benchmark return of the fund during the past ten years is 6.5% per annum. The actual return during the first 3 years (2003 to 2005) was an average of 16% per annum.
Note:
- The future return is not guaranteed
- Past performance is not indicative of future return.
3. How much must I invest?
The initial investment must be at least $5,000. You can invest more, if you wish.
The invested sum is used to buy units of the investment fund at its prevailing price. The value of the units are expected to increase with the underlying value of the investments in the fund.
4. How much can I expect to get at the maturity date?
If you save $50,000, the projected amount (not guaranteed) at the end of 20 years is:
Assumed net return 5% p.a 7% p.a. 9% p.a.
Initial investment $50,000 $50,000 $50,000
Gain (estimated) $78,000 $136,000 $220,000
Projected amount $128,000 $186,000 $270,000
Assumed net return - after deducting the fund management fee (for illustration only)
Gain (estimated) - after deducting spread, policy fee and advisory fee
The projected amount is much higher than the return from traditional endowment or educational plans offered by life insurance companies.
If the policyholder (male at 30) pay a traditional endowment policy for the same premium, the guaranteed sum assured is $77,000 and the projected amount at maturity (not guaranteed) is $113,000.
5. Is there any life insurance cover?
In the event of death of the parent before age 60, the policy pays a sum assured of 125% of the invested sum (less withdrawals) or the value of the investments, whichever is higher. This cover is provided free of charge.
If you need additional cover, we recommend a decreating term assurance. If you insure for $50,000 over 20 years, the monthly premium is only $x,xx at entry age 30 and $x.x at 40.
6. Can I top up my investments?
You can top up your investments at any time, by making additional investments of at least $1,000.
7. Can I make withdrawal for emergency?
You can withdraw any amount from this plan, subject to a minimum of $500. There is no charge or penalty for the withdrawal. When you make a withdrawal, a certain number of units will be cancelled to provide this amount.
8. Is there a minimum investment period?
There is no minimum saving period. You can continue the savings plan for as long as you wish.
9. What are the charges?
The charges are among the lowest in the market:
- 3.5% spread between offer and bid price
- fund management fee of about 1% per annum
- initial fee of $100 when you set up the plan
- annual fee of $50 per policy (currently, waived for an investment above $15,000)
These modest charges are more than offset by the higher return that is likely to be earned by the investment fund.
They are much lower than similar plans available in the market. You can get a much better return from this plan.
10. Do all investment funds charge similar annual fee?
Most funds in the market charge an annual fee of 1.5% or 2% of the value of the investment. The combined fund from NTUC Income charge a lower fee of about 1% per annum.
A difference of 1% in annual fee, on an initial investment of $50,000, amounts to $26,000 at the end of 20 years (assuming an average return of 6% per annum). You can get $26,000 more, by investing in the combined fund.
11. Do all plans have the same spread between the bid and offer price?
Most investment linked plans in the market have a spread of 5%. The flexi-link plan from NTUC Income have have a lower spread of 3.5%. The difference of 1.5% on a lump sum of $50,000 mean that you get an additional $750 invested for you.
During our promotion, if you invest a larger amount, you can get bonus units credited to your investment. This gives more investment units to you. The bonus can be as high as 2%. This reduces the spread to as low as 1.5%.
12. Interested?
Call 6877 1111
Visit our Business Center at Bras Basah Road or Tampines Point.
Or see your insurance adviser.
End of FAQ
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