Tiq 3-Year Endowment Plan: 3.95% p.a. Guaranteed Returns if Held to Maturity (2023)
12 Jan 2023 Update
Sales of the Tiq 3-Year Endowment Plan have closed do keep a look out on Seedly as we will cover any new endowment plan launches.
In the market for a short-term investment?
Considering that the Singapore Savings Bond (SSB) gives you returns that are somewhere around 2.97% per annum (p.a.)…
Have you ever considered an endowment plan like, say…
Etiqa’s latest Tiq 3-Year Endowment Plan?
Well, this policy has a 3-year policy term and a guaranteed return of 3.95% p.a. ONLY if you hold it to maturity.
It doesn’t sound too shabby, huh?
Interested?
Let’s find out more!
Disclaimer: The Information provided by Seedly does not constitute an offer or solicitation to buy or sell any insurance product(s). It does not take into account the specific objectives or particular needs of any person. We strongly advise you to seek advice from a licensed insurance professional before purchasing any insurance products and/or services.
The precise terms, conditions, and exclusions of products are in the policy contracts. This policy is protected up to specified limits by SDIC (applicable for Income products that fall under the Policy Owners’ Protection Scheme). Information is correct as of 4 January 2023.
TL;DR: Is the Tiq 3-Year Endowment Plan Worth It?
The Tiq 3-Year Endowment Plan is a single-premium, non-participating life insurance savings plan.
| Details | Tiq 3-Year Endowment Plan (Jan 2023) |
|---|---|
| Coverage | 3 years |
| Capital Guaranteed | From the start of the third policy year |
| Premium | Single premium (one lump sum) $5,000 (min) to $1,000,000 (max) |
| Guaranteed Maturity Benefit | 3.95% p.a. |
| Death Benefit | Pays 101% of your single premium upon your demise (but exclusions like death from pre-existing conditions & suicide within the first 12 months etc. apply) |
| Policy Protection | Up to specified limits by SDIC |
| Credit Rating of Insurance Company by Fitch (as of 11 Apr 2022) | A |
The guaranteed return is 3.95% p.a.* or 12.30%* if you held it to maturity (three years) and is comparable to the current fixed deposit promotions.
It’s a product worth considering if you plan to put aside a minimum of S$5,000 and up to S$1,000,000 for at least three years.
Note: If you’re unsure if you should commit to such a product, we highly encourage you to seek proper advice from a certified financial advisor.
The sale of this tranche of the Tiq 3-Year Endowment Plan has ended. Do keep a look out on Seedly for future updates.
*The guaranteed maturity benefit of 12.30% of the single premium is based on the guaranteed yield at maturity of 3.95% p.a., which will be paid out at the end of the 3-year policy term provided that the insured survives at the end of the policy term, with no policy alterations or claims made during the entire policy term.
What is an Endowment Plan?
An endowment plan is a life insurance policy that gives you a death benefit and helps you save simultaneously.
Basically, you either pay regularly or make a lump sum payment (AKA “single premium”).
Etiqa’s Tiq 3-Year Endowment Plan is an excellent example of a single premium endowment plan.
In return, you get life insurance coverage.
Once your policy matures, you’ll be able to collect your principal plus any accrued interest.
Think of it as a hybrid between insurance and investing.
However, the insurance coverage an endowment plan provides is usually a little too basic to rely on.
So if you want to be adequately protected, you’ll need to look at getting an actual life insurance plan instead.
Is This Endowment Plan Safe?
Similar to the Singlife Account, this endowment is protected under the Policy Owners’ Protection (PPF) Scheme administered by the Singapore Deposit Insurance Corporation (SDIC).
The PPF Scheme provides 100% protection for the guaranteed benefits of your life insurance policies, subject to caps where applicable.
According to SDIC, the amount insured (amount deposited) has a guaranteed surrender value at the point of failure that is capped at S$100,000.
There is also a cap of S$500,000 for the aggregated guaranteed sum assured.
The coverage is automatic, and no further action is needed from you. You can also check out the SDIC site or the Life Insurance Association (LIA) site for more information about the benefits and caps of the PPF scheme.
Can You Withdraw From an Endowment Plan?
Technically, some endowment policies allow you to withdraw cash annually after the plan has built enough cash value.
For the Tiq 3-Year Endowment Plan, you must commit to the full three years before getting your returns.
The Pros of Tiq 3-Year Endowment Plan
Guaranteed Issuance
The issuance of the Tiq 3-Year Endowment Plan is guaranteed, as no medical underwriting is required.
Guaranteed Capital
Your capital is guaranteed ONLY if you hold the endowment plan to maturity.
In return, you’ll get a guaranteed maturity yield of 3.95% p.a.* or 12.30%* if you hold it to maturity (three years).
So assuming you pay a single premium of S$10,000.
Three years later, you can receive a guaranteed maturity benefit of S$11,230.
*The guaranteed maturity benefit of 12.30% of the single premium is based on the guaranteed yield at maturity of 3.95% p.a., which will be paid out at the end of the 3-year policy term provided that the insured survives at the end of the policy term, with no policy alterations or claims made during the entire policy term.
Death Benefit
While the policy is in force, you’ll enjoy a life protection benefit of 101% of the single premium.
Meaning if you paid a premium of S$10,000 and unfortunately meet your demise…
Your named beneficiaries will receive S$10,100.
Yep, and this is why I mentioned earlier that if you want adequate protection for your loved ones.
You’ll want to consider more robust life insurance since this endowment plan only provides very basic coverage.
Cons of Tiq 3-Year Endowment Plan
Sizeable Capital
You’ll need to have S$5,000 lying around to do this — and that’s not chump change.
Surrender Charge
You’ll notice that I’ve repeatedly pointed out that the guaranteed maturity benefit will ONLY be paid out if you hold the endowment plan to maturity.
Assuming you pay the premium of S$10,000:
| End of Policy Year | Surrender Value | Total Premiums Paid to Date | Surrender Value | Death Benefit (Guaranteed) |
|---|---|---|---|---|
| 1 | 60% | $10,000 | $6,000 | $10,100 |
| 2 | 70% | $10,000 | $7,000 | $10,100 |
| 3 | 80% | $10,000 | $8,000 | $10,100 |
This means that if you, for some reason, decide to surrender your Tiq 3-Year Endowment Plan before the end of your 3-year policy term, you’ll incur a surrender charge and receive less than what you initially paid.
The takeaway here?
If you decide to go with this endowment plan, ensure that you die don’t need this sum of money for the next three years.
How Do I Apply?
If you fulfil the following criteria:
- You are a Singapore Resident with a valid NRIC or FIN; or
- You are a foreigner with a valid Work Permit, Employment pass, or Social pass.
- You are between ages 17 to 70 (age next birthday)
Then it’s straightforward.
Just head over to Tiq’s website, where you can apply and manage your policy online.
And FYI: you CAN choose to buy more than one policy.
How Do I Purchase the Tiq 3-Year Endowment Plan?
You can apply and manage your policy online on Tiq’s website.
You’ll need a couple of things like:
- Verification: Either via MyInfo or a photograph of your NRIC or FIN pass
- Proof of address: A copy of your bill or statements (for non-Singaporeans only)
You can pay via :
- DBS/POSB Direct Debit
- PayNow
- Pay Later Options: FAST (Fast and Secure Transfers) or PayNow UEN
Note: it’s recommended that you pay via a bank account that matches the name of the policyholder.
So… Should I Invest in the Tiq 3-Year Endowment Plan?
It’s not so much a should you but more of a can you?
If you’re looking for a short-term, low(er) risk investment where you expect to use the money for, say… the downpayment of an HDB BTO or a wedding…
Then this is an option you can consider besides fixed deposits, SSBs and T-bills.
However, if there’s a chance that you might need the money anytime before three years, this is not an ideal option because you’ll have to pay a surrender charge and might get less than what you initially forked out.
In terms of insurance coverage… If you’re looking to get this as protection for you and your family, it might be a little too basic for your needs.
As always, even these endowment plans are only available on a first-come, first-served basis.
Take a moment to review your insurance, finances, and needs before buying anything.
After all, you’re not going to buy something JUST because it’s available for a limited time only, right…
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