Thursday, June 16, 2016

When Should I Buy An Investment Savings Plan?

Hi everybody!

After reading Budget Babe's post about Francesca Soh, I have decided to address this thorny issue.

(hubba hubba. From her blog, I'm not a stalker, k)

The PRUflexicash looks absolutely ridiculous. After 15 years the total non-guaranteed return is about 12%, while the highest possible loss is 24%. Based on their example, the IRR is 1.42%! Are you kidding me? It's a ridiculous product to begin with! And that's not even taking into account the smoke, mirrors and perfumes by the agents selling them.

Whenever something comes disguised trying to be some weird mix of insurance / investments / savings, more often than not, it's a piece of shit. Take for prime example, the savings plan by Great Eastern that ran last year. It was a horrible horrible choice as a savings vehicle, especially when compared to awesome alternatives like the Singapore Savings Bond.

I have decided to make a complicated infographic to help people decide if they should buy an insurance savings plan.


You might think I'm joking. I'm not. You might think that this is satire. Well, it's both truth and satire.

You want the truth? Here's the inconvenient truth:

Insurance Savings Plans are shitty instruments for insurance and shitty instruments for savings. Are you protected and also saving with these plans? Yes, but there are much better alternatives.

Like? Perhaps buying a cheap term insurance and put money in some a low-risk savings alternative, like the Singapore Savings Bonds. Honestly, even just rolling over fixed deposits every single year would probably be almost just as good too.

But if you want a cute pretty agent to buy you coffee and pat you on the head for being such a good little saver, just close this window and call her up for an appointment. What do I know?

12 comments:

  1. Most agents sell their products on roadshows when these commuters majority have no decent financial knowledge

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    1. Yes, I would agree with this statement, those so called agents are targeting those NSF who just enlisted or poly student to sign up for such plan, which i personally think it is not right.

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    2. I remember got some of those agents camp at Paris Ris MRT to get the Tekong boys! Luckily I botak and ugly that time, they never talk to me, HAHA

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  2. i like your flow chart.

    i agree its a crappy product.
    but it suits those who know nuts about personal finance. and want the easy way out.

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    Replies
    1. Hi Foolish Chameleon,

      Thanks, it was a lot of work to make it ;) Haha

      I wouldn't say that it is all bad, but 90% of these products are really just things that are packaged nicely so that a commission can be justified. The number of people who would genuinely need these products as their 1st choice solution, as opposed to other options, is very narrow.

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  3. This comment has been removed by the author.

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  4. Very good article! You know, my financial advisors from https://linkagemind.com/practices/tax-investment/ always provide me with priceless recommendations on investment issues. They are fully experienced guys who know their businesss well.

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  5. Thank you for sharing such great information. It is informative, can you help me in finding out more detail on a Investment Insurance Plan,i am very new to this field and wanted to understand the basics of investment insurance .

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  6. Thank you for sharing such great information. It is informative, can you help me in finding out more detail on a Investment Insurance Plan,i am very new to this field and wanted to understand the basics of investment insurance .

    ReplyDelete
  7. Thank you for sharing such great information. It has help me in finding out more detail about Savings Plan!

    ReplyDelete
  8. Hey Nice Article. Thanks for sharing such article. You can also check here to know more about
    Child Savings Plan."

    ReplyDelete

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