HSBC just released its first online endowment plan: the HSBC Life Online Endowment that offers guaranteed returns at a competitive 2.5% per annum.
Here’s a low-down on what you need to know.
1. Invest A Minimum Of $5,000
To invest in the HSBC Life ONline Endowment, you will need to invest a minimum of $5,000 to a maximum of $100,000.
2. Short Term Investment Of Just 3 Years
Your money will only be locked in for a 3 year-long investment period.
3. Death Benefit Coverage
The plan covers a death benefit coverage of 105% of the Single Premium. What does this mean? This means that if you were to put in $5,000 into the endowment plan, in the event of death, you or your next of kin will be compensated with a death benefit of $5250.
A Look At Your Investment Returns With HSBC Life Online Endowment
From the above, investing $5,000 with HSBC Life Online Endowment will give you a 2.5% return per annum. At the end of theĀ 3 year policy term, you will be given back a guaranteed maturity value of $5,384.
Pros Of HSBC Life Online Endowment:
- Capital guaranteedĀ if held till maturity
- You will get back a 2.5% return per annum, which is much higher than current Singapore Savings Bond rates at 1.74%
- Single premium payable policy
- Endowment plan that provides a sum insured on death or terminal illness.
- If you’re diagnosed with a terminal illness or die within the policy term, HSBC will pay you or your nominated beneficiary the relevant benefits.
Cons of HSBC Life Online Endowment:
While the commitment period for the policy is relatively short, the money will be locked in for the fixed time period. If you were to cancel the plan, you will be subjected to the following penalties:
| Year | Surrender Value | Penalty when Surrendering (Assuming $5,000 investment) | $$ You Get Back During Withdrawal |
|---|---|---|---|
| After 1 Year | 90% | $500 | $4,500 |
| After 2 Years | 95% | $$250 | $4,750 |
| After 3 Years | 100% | 0 | $5,000 |
The surrender value refers to the amount that will be returned to you in the event you cancel the plan.
How To Apply For HSBC Life Online Endowment
1. Using MyInfo
Go to the HSBC website and you can purchase the HSBC Life Online Endowment plan using your SingPass credentials via MyInfo.
2. Via PayNow or Fund Transfer
After you submit your application, you can choose either PayNowĀ orĀ Fund TransferĀ option to make your premium paymentĀ within 48 hours of your application submission.
After payment, HSBC will issue the policy to you.
Is This The Best Thing To Invest In?Ā
As with all investments, we always encourage you to compare the returns, as well as know your risk appetite. For fixed endowments, the risk is relatively low, though keep in mind that your money will be locked in for the policy period. However, given the relatively short policy period and a starting investment of $5,000, the HSBC online endowment plan is worth considering, especially when it has a guaranteed return that trumps the current Singapore Saving Bonds and Fixed Deposit Rates.
