Martin Lee @ Sg
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NTUC DreamSaver

NTUC recently launched their DreamSaver product, a regular premium participating endowment plan with a policy term of 8 or 10 years and a limited premium paying term of 5 years.

How it works is that you pay premiums for the first five years of the plan, and then you will receive a monthly cash coupon equal to the size of your monthly premiums from the sixth year onwards. If you deposit the cash coupons with NTUC, you will be able to earn a non-guaranteed interest of 3.5% p.a. on the coupons.

The minimum monthly premium for this plan is $500.

Let’s cut to the chase and look at the actual rate of return of the DreamSaver plan.

The 10-year plan will be used as an illustration. For the highest return, the cash coupons should be deposited with NTUC to earn the higher interest.

Total premiums paid : $500 x 12 x 5 = $30,000
Total guaranteed maturity proceeds : $30,250

Internal rate of return (IRR) based on guaranteed portion : 0.11% p.a.

Projected maturity proceeds if par fund performs at 3.75%: $35,191
IRR based on this projected return : 2.13% p.a.

Projected maturity proceeds if par fund performs at 5.24%: $37,691
IRR based on this projected return : 3.06% p.a.

I will leave it to you to give your verdict on this plan. ๐Ÿ™‚

Leave a Comment:

creepy says 9 years ago

There is an ongoing lawsuit against AIA.

Shanne says 9 years ago

Good analysis Martin. Keep it up. ๐Ÿ™‚

TheWatchman says 9 years ago

You know why this product is now extended to FAs and with a different name? NOt really, this product was first manufactured for Citibank but ntuc agents found out and cow peh cowbu and the identical twin REACH was born. Of course initial enthusiasm was intense like new broom sweeps clean but soon fizzles because the consumers found out the truth.Now they think that FAs have better tricks up their sleeves and can do something to CONner and con their own customers before sending it to the closet.
Do you know the risk of this product? If it is intended for the masses it is a very risky product because it can NEVER meet the masses’ goals but only the ntuc agents’ and now the FAs’ goals.

Nuts says 9 years ago

I had a chance to preview the above policy back in June 2009 when their actuaries and LI dept were finalising this product. I gave my feedback then that it was not attractive, and the internal costs and expense ratios were too high. It was then shelved and they focused on the revamp of their new ILPs to launch in Q3 2009 (which is worse compared to their older ILPs). I thought that was it.

Little did I know that they suddenly launch this anticipated endowment in mid-2010. When I looked at the figures again, it is still the same old crap as back in June 2009. In recent years, the name of products seems to be made for their salespeople in mind e.g. for their salesmen & saleswomen to DREAM and to REACH for their API and WPI targets in order to be hosted at 5-star hotel dinners and to go on expenses-paid overseas trips. I believe the next overseas incentive trip in Mar 2011 is Spain, either Barcelona or Madrid.

The Watchman says 9 years ago

Another crap product aimed at the kiasu and ignorant for their insurance salesmen to exploit.10 years for about 3% and non guaranteed too. Real return is ZERO or may even be negative.
I wonder whose needs can be met by this product… Oh, I think I is to help the executive financial consultants to meet the incentive trip and qualify for mdrt needs..
The sales pitch goes like this. pay only 5 years , hor.. you got insurance…and capital guaranteed and you get this amount after 10 years…(half truth)
Consulting? it is insulting.

PS.. another name for Dreamsaver is REACH…please save your dream before it turns nightmare when it matures

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