A new class of Savings and Endowment plans has hit the market, allowing a lifetime of wealth accumulation. Such policies combine both the characteristics of Savings endowment and Whole life plans.
Meant for the purpose of enhancing your financial returns, each of the lifetime savings plans has its advantages and specific shortcomings as discussed below.
The 3 Best Savings Endowment Plans with Lifetime Wealth Accumulation in Singapore
Reviewing endowment policies across all insurers in Singapore, InterestGuru.sg presents this comprehensive list of the best savings plans for lifetime wealth accumulation based on their individual features.
- Best Lifetime Savings Plan for withdrawal flexibility/ guaranteed cash values – Manulife ReadyBuilder
- Best Lifetime Savings Plan for highest projected cash value – Prudential PruWealth
- Best Lifetime Savings Plan for lifetime income payout/ legacy – NTUC Income Wealth Solitaire
Note: All the featured savings plans allow for lifetime wealth accumulation without a fixed maturity. To fully withdraw the accumulated cash value, you may simply surrender/ terminate the policy.
Should you take up a lifetime endowment plan?
Should long-term wealth accumulation be your primary objective, a lifetime endowment plan may offer the best product features that meet your needs.
- The flexibility of partial withdrawal without financial penalty
- Long-term guaranteed capital growth on your money
Depending on the insurance companies, lifetime endowment plans can be classified as a whole life plan or an endowment savings plan.
Key characteristic lifetime endowment savings plans include:
- Paying insurance premium for a fixed number of years
- Reaching a higher guaranteed cash value than the total premium paid in a shorter number of years
- Choice of maturity or surrendering of the plan for cash value
In any case, it is never too early to start saving and let the effects of compounding returns generate additional wealth for you.
The advantages of a whole of life endowment plan
Within this category of life insurance plans, some features are generally available to all of them.
- Limited period of payment – Insurance premium is only paid for a fixed number of years
- Guaranteed of principle – Savings is principle guaranteed after a fixed number of years
- Partial withdrawal – Part of the accumulated savings can be withdrawn
- Unlimited wealth accumulation – The policy continues until termination for full cash value
- Simplified or general underwriting – No medical underwriting or health check is required
The disadvantages of a whole of life endowment plan
As wealth accumulation is the primary objective of lifetime endowment plans, the insurance coverages are generally lacking. Compared to a whole life insurance policy, the following features are commonly lower in values.
- Critical and Early Critical Illness coverage – Lump sum payouts are not available for such plans
- Coverage multiplier – Multiplier for insurance coverage are not available
- Low Sum Assured value – In the event of death, the plan usually only pays the higher of 105% of total premium paid or surrender value
Read about: Term life or Whole life (Which is better for long-term coverage)?
Which lifetime endowment savings plan is the best?
Depending on your financial objectives and goals, Manulife ReadyBuilder, Prudential PRUWealth or NTUC Income Wealth Solitaire may each better fit you.
The lifetime endowment savings plans below are not ranked according to any priorities due to individual financial returns, product features, and unique benefits.
Best Lifetime Savings Plan for withdrawal flexibility/ guaranteed cash values – Manulife ReadyBuilder
With unlimited withdrawal features and continual wealth accumulation, Manulife ReadyBuilder allows you to achieve multiple goals within a single insurance savings plan.
Besides lifelong wealth accumulation, the policy can be re-assign or pass on to a third party for further financial gains.
Key features of Manulife ReadyBuilder includes:
- The flexibility of withdrawal from the cash value at any point of time *Unique*
- The option to stop paying the insurance premium for up to a year, without incurring interest or penalties on the payable premium *Unique*
- Continuity of plan to the next generation or third party without starting all over again from the beginning
- Wavier of future insurance premiums in the event of Total and Permanent Disability
Sample Illustration for Manulife ReadyBuilder
Gary (Male, Non-smoker) at age 35 with a newborn, decided to accumulate his savings by paying his premiums over a 10 years period. His financial commitment for Manulife ReadyBuilder ends upon making the last premium payable (by the end of the 10th year).
Monthly or Yearly Premium: $1,000 or $12,000
Total Premium paid: S$120,000
- With no restriction or lock-in period on cash withdrawal, Gary can do a partial withdrawal as long as there is cash value in his plan.
- At Age 50 (15 years from the policy), he can expect approximately a Guaranteed/ Projected cash value of $125,000/ $150,000
- Assuming no withdrawal, at Age 70, he can expect ~$400,000 as a lump sum should he choose to completely cash out the plan. Alternatively, he may do a partial withdrawal and assign the policy to his child (now age 35).
Should there be no withdrawal done on the policy, his child would be looking at a potential surrender value of ~$1.3mil/ $3mil at Age 65 or Age 85 respectively.
More about: Manulife ReadyBuilder review (Opens in a new tab)
Download factsheet: Manulife ReadyBuilder (Opens in a new tab)
Best Lifetime Savings Plan for highest projected cash value – Prudential PruWealth
With the same objective as Manulife ReadyBuilder, Prudential PruWealth has similar features with slight differences.
Key features of Prudential PruWealth includes:
- The flexibility of withdrawal from the cash value after 20 years
- Allows joint-ownership so the policy is automatically transferred to the joint applicant upon the demise of the main policyholder *Unique*
Sample Illustration for Prudential PruWealth
Gary (Male, Non-smoker) at age 35 with a newborn, decided to accumulate his savings by paying his premiums over a 5 years period. His financial commitment for Prudential PruWealth ends upon making the last premium payable (by the end of the 5th year).
Monthly or Yearly Premium: $2,000 or $24,000
Total Premium paid: S$120,000
- After 20 years and starting at age 55, he can choose to do a withdrawal, as long as there is cash value in his plan. At Age 55 (20 years from the policy), he can expect approximately a Guaranteed/ Projected cash value of $140,000/ $230,000
- Assuming no withdrawal, at Age 70, he can expect ~$420,000 as a lump sum should he choose to completely cash out the plan. Alternatively, he may do a partial withdrawal and assign the policy to his child (now age 35).
Should there be no withdrawal done on the policy, his child would be looking at a potential surrender value of ~$1.3mil at Age 65.
More about: Prudential PruWealth review (Opens in a new tab)
Download factsheet: Prudential PruWealth info sheet (Opens in a new tab)
Best Lifetime Savings Plan for lifetime income payout/ legacy – NTUC Income Wealth Solitaire
As the name suggested, NTUC Income Wealth Solitaire is in a class of its own and catered to those with higher net worth. While the entry level is set higher, the plan does come with unique benefits.
Key features of NTUC Income Wealth Solitaire includes:
- Only single premium option available (Min sum of $100,000)
- Monthly guaranteed income payout starting from the end of the 5th policy year *Unique*
- Option to accumulate payout at the prevailing interest rate of 3.5% p.a
- Additional guaranteed lump sum at the end of the 20th and 30th policy year *Unique*
Sample Illustration for NTUC Income Wealth Solitaire
Gary (Male, Non-smoker) at age 45 decided to take up NTUC Income Wealth Solitaire with his 5 years old child (Eddie) as the insured party. He decided to pay a single premium of $300,000, knowing that there is a monthly income payout starting from age 50.
Total Premium paid: S$300,000
- After the end of the 5th policy year, Gary can potentially receive up to $1,000 monthly. Alternatively, he can accumulate the monthly income if he does not require the income.
- Assuming the monthly income is accumulated, Gary can receive ~$500,000 at age 75 from the plan and choose to start getting a monthly payout or continue with accumulation.
- In any case, Gary at age 85, transfer ownership of the policy to his child (Eddie) now at age 45. Eddie can choose to supplement his income by drawing the monthly payout of up to $1,000.
Suppose that Eddie chooses to receive a monthly income, the policy can still be surrendered at a later time for its surrender value. At age 70, Eddie can still surrender the policy for up to $600,000 or receive up to $1.6 mil when the policy expires when he reaches age 100.
More about: NTUC Income Wealth Solitaire review (Opens in a new tab)
Download factsheet: NTUC Income Wealth Solitaire (Opens in a new tab))
Are whole of life endowment plans suitable for you?
If mid to long-term wealth accumulation is your primary objective, a whole of life endowment plan may be an excellent fit for your financial goals. Instead of being restricted by a fixed maturity endowment plan, you can now terminate the policy only when you need the funds.
Read about: Where do you start with financial planning?
If a monthly payout is your priority
Not only do you have the flexibility of cashing out, plans such as NTUC Income Wealth Solitaire even provides a minimum guaranteed monthly income as short as 5 years after the placement of your insurance premium.
Alternatively, you may consider a retirement annuity plan if you prefer to have a higher income over a fixed number of years.
Read about: 3 Best Retirement Plans in Singapore with Lifetime Income Payout (2020 Edition)
Read about: The Complete Guide to Retirement Planning (2020 Edition) *NEW*
If a lump sum payout is your priority
Prefer to have access to withdraw from your lump sum while allowing the remaining funds to accumulate over time? Consider a limited payment policy with features that enhance your financial journey. Plans such as Manulife ReadyBuilder even have fail-safe features during a period of financial difficulty.
And for those looking at wealth succession, Prudential PruWealth allows a joint-ownership to ensure there will be no unforeseen financial dispute within the family after your demise.
Read about: This is why your insurance payment term should be as short as possible
Read about: 3 Best Endowment Savings Plans in Singapore with Fixed Maturity (2020 Edition)
Lifetime endowment savings plans are for long-term gains
Not all lifetime endowment plans allow withdrawal at any point in time, take your time to fully understand the terms and conditions.
In the event that you require insurance coverage or investment returns, such savings plans will certainly not be suitable for you. Hence, always ensure that your financial goals are met and there is a reasonable time horizon towards making a full withdrawal.
Read about: The 7 Best Regular Insurance Savings Plans in Singapore by Product Features (2020 Edition) *NEW*
Which Endowment Savings Plans are the most suitable for you?
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Note: All financial figures above are based on close approximate and all non-guaranteed figures are based on the higher tier of 4.75% investment returns. The sample illustrations are for illustrative purposes only and is not a contract of insurance. In the event of doubt, always refer to the precise terms and conditions as specified in your policy contract. Seek the advice of a qualified financial professional or a licensed financial advisor before making any decision or financial commitment.
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