As working adults, many of us would be used to receiving regular income, most likely in the form of a salary paid at least monthly.
Receiving a fixed sum every month has its advantages, as it helps us plan our expenditures, be it buying groceries or paying our bills. By the time retirement comes, we may be used to planning our expenses along these modes, but unfortunately, the source of regular income - our jobs - will no longer be there to enable this to happen.
We all know that CPF funds may not be sufficient to tide us over our retirement years. As many of us are expected to enjoy a longer life span given medical advances, it would be advisable to start planning ahead to ensure we enjoy our golden years.
A good strategy would be to build streams of income to fund our retirement, and one way we can make this happen is by investing in products that provide an annuity income.
An example of such a product would be PrimeGold Saver, offered by OCBC Bank.
It can help in retirement planning and is ideal for those who wish to start saving early, and are looking for a deferred regular stream of income over a period of time.
PrimeGold Saver is a Single Premium Participating Endowment insurance plan which offers investors the flexibility of receiving Annual Payouts as early as the end of policy year 4, depending on their choice of plan.
The plan provides financial protection against Death and Total and Permanent Disability during the policy term. In addition, this plan also provides annual payouts, consisting of (Guaranteed) Survival Benefits and (Non-guaranteed) Cash Bonuses one year after the Accumulation Period for up till one year before the policy matures, as illustrated below:
|Policy Term||Accumulation Period||Payout Period||Annual Payouts due on End of Policy Year|
|(a)||15||5 years||10 years||6 - 14|
|(b)||20||3 years||17 years||4 - 19|
|(c)||20||5 years||15 years||6 - 19|
Assumption : Policy Term of 15 or 20 years
Premium payment Term : Single Premium
Sum Assured : Minimum - Cash: $21,000 (i.e. minimum single premium of $20,000) or SRS: $8,400 (i.e. minimum single premium of
(a) For PrimeGold Saver (15 years)
Accumulation Period means a period of 5 policy years commencing from the Commencement Date. Payout Period means a period of 10 policy years commencing immediately after the expiry of the Accumulation Period.
(b) For PrimeGold Saver (20 years I)
Accumulation Period means a period of 3 policy years commencing from the Commencement Date. Payout Period means a period of 17 policy years commencing immediately after the expiry of the Accumulation Period.
(c) For PrimeGold Saver (20 years II)
Accumulation Period means a period of 5 policy years commencing from the Commencement Date. Payout Period means a period of 15 policy years commencing immediately after the expiry of the Accumulation Period.
Different types of annuities can have different product features so the key point would be to match the most appropriate income stream (or streams) to your own specific circumstances. There is no limit on the number of income streams you may invest in, and you may choose to invest in more than one income stream simply to spread your risk.
Other factors to consider include how much of your available money to invest in such products. They are not the only option available and it is always prudent to retain access to some money for emergencies or other irregular expenses such as home maintenance costs.
Finally, as with any investment, retirement income streams involve some degree of risk. Everyone views risks differently, so it is advisable to talk to a financial planner and ensure that you are not taking on excessive risk in your investments.
PrimeGold Saver is a single premium participating anticipated endowment insurance plan underwritten by Great Eastern Life Assurance Company, and is not a deposit or obligation of, or guaranteed by OCBC Bank.
Buying a life insurance policy is a long-term commitment. An early termination of the policy usually involves high costs and the surrender value payable may be less than the total premiums paid.
It is usually detrimental to replace an existing accident and health policy with a new one. A penalty may be imposed for early policy termination and the new policy may cost more or have less benefits at the same cost.
You may wish to seek advice from a financial adviser before making a commitment to purchase a life policy. In the event that you choose not to seek advice from a financial adviser, you should consider whether the life policy in question is suitable for you.
This material is for general information only. It is not a contract of insurance. It does not constitute an offer to buy an insurance product or service. It is also not intended to provide any insurance or financial advice. The specific terms and conditions of the plan are set out in the policy documents. A person interested in the insurance policies should read the product summary and benefit illustration (available from OCBC Bank) before deciding whether to buy this product.
No representation or warranty whatsoever (including without limitation any representation or warranty as to accuracy, usefulness, adequacy, timeliness or completeness) in respect of any information (including without limitation any statement, figures, opinion, view or estimate) provided herein is given by OCBC Bank and it should not be relied upon as such. OCBC Bank does not undertake an obligation to update the information or to correct any inaccuracy that may become apparent at a later time. All information presented is subject to change without notice. OCBC Bank shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person acting on any information provided herein.
OCBC Bank, its related companies, their respective directors and/or employees (collectively “Related Persons”) may have positions in, and may effect transactions in the products mentioned herein. OCBC Bank may have alliances with the product providers, for which OCBC Bank may receive a fee. Product providers may also be Related Persons, who may be receiving fees from investors. OCBC Bank and the Related Persons may also perform or seek to perform broking and other financial services for the product providers.