Flexi Link and CPF policies

Dear Mr Tan,

I've been reading your blog for more than a year and have thoroughly enjoyed it. Can you help me with the following queries.

1) I bought a Living policy for my daughter 4 years ago. I have read your articles which encourage investment in large, low cost fund. I am thinking of terminating the living policy and using the surrender value to invest in NTUC Income's Flexi-Link plan. I guess the better, long term return should exceed the loss of about $1,000 loss on surrendering the living policy. Appreciate your advice.

Reply: I agree with you. It is probably better to make the switch and get a better long term return. However, the stockmarket is still quite volatile. Perhaps you can wait until it stabilises before you make this change?

2) My husband also bought two endowment policies some 10 years ago and he has been using his CPF fund to pay for the yearly premiums. With the new CPF changes, I read that members can continue to service their regular premium insurance policies but NOT recurring single premium insurance policies even if their CPF balance falls below $20,000. May I know whether the yearly premiums for my husband's policies are considered as regular or recurring single premiums?

Reply: An endowment policy is considered as regular premium. So, your husband should be able to continue to get the annual premium paid through CPF.