30 Apr Rise Above Disaster with ePREMIER retirement
For many people, the COVID-19 outbreak came at a bad time. Worldwide, supply chains are slowing to an excruciating crawl, placing the world economy under unprecedented pressure. Pan-sector retrenchments have only just begun and plunging stock prices gnaw at once-healthy portfolios. For those with life savings on the line, the crisis is a personal one, too. But still there are others who face the pandemic with quiet optimism in the knowledge that their futures, and the futures of their loved ones, are safe. In such turbulent times as these, effective retirement planning can bring priceless assurance to your family. Let’s explore how ePREMIER retirement, a retirement insurance savings plan by Etiqa, can help achieve that.
ePREMIER retirement at a glance
- Your capital guaranteed at the selected retirement age
- Receive a monthly retirement income for 10 or 20 years
- Option to receive a lump sum benefit when your policy matures
- Choose to distribute your premium payments over 2, 5 or 10 years
- Receive a lump sum benefit if diagnosed with major cancer on or before age 70
- Death protection throughout policy term, even while receiving monthly income payouts
- Option to add eXTRA cancer waiver rider to waive future premiums if diagnosed with major cancer
Keep the essentials in mind
In a disaster-free world, your income sustains the status quo. Perhaps you live comfortably within your means, pay off your debt in regular installments and take the occasional vacation. Factor these into the lifestyle you foresee for your retirement. For some, this means more travel, more expenditure on spoiling the grandchildren or perhaps even a pet.
Categorise your expenses broadly, and you get three distinct lists: food, transportation and lifestyle (comprising hobbies and indulgences) – all essential components of a routine you would hope to keep intact after your professional life ends, regardless of circumstance.
A savings strategy that puts you close to affording your dream retirement in peacetime can re-situate poorly in an afflicted economy, placing your financial goals even further from reach. Factor inflation into the mix and your cost of living surges, potentially straining your finances even further.
This is when added protection and assurance can go a long way in securing your finances with your retirement in mind.
Why plan your retirement with insurance?
Whether debating with your financial advisor, your broker or your father, retirement planning inevitably distills to a question of risk management. You retirement is among your most important milestones, and certainly not something you should gamble on. ePREMIER retirement agrees.
Your policy not only guarantees your capital at the selected retirement age, but comes with an added layer of protection by the Singapore Deposit Insurance Corporation (SDIC) up to specified limits against insurer default. Having calibrated your monthly retirement income to match your lifestyle needs, this guarantee can help ensure you will be able to afford the essentials during retirement. Coupled with the very low probability of insurer default, your policy works to transfer downside risk away from you, while growing your savings for the long term.
COVID-19 took the world by surprise, and no amount of expertise or superstition can prevent similar catastrophe from befalling humanity again. This means your retirement plans must be able to withstand – even thrive, in hostile environments. Should disaster strike during your retirement, riskier investments can erode your financial security but ePREMIER retirement restores balance with steady income and coverage.
Additionally, insurance savings plans like ePREMIER retirement help instill the financial discipline you need to succeed. By purchasing a policy, you are forced to set aside a sum of money regularly to pay your premiums, from which you will benefit eventually.
Statistics from December of 2018 show that an unfathomable 74% of individuals receiving CPF payouts, received less than S$500 a month. Alone, these payouts will barely sustain a comfortable living, much less retirement. You can add value to your retirement by diversifying your sources of retirement income, such as from an insurance plan that pays out guaranteed benefits.
An illustration of ePREMIER retirement
Take for instance that you were a female non-smoker turning 40 on your next birthday, nearing the peak of your career. You give yourself 20 years more for your professional pursuits, with retirement at 60 in mind.
Having identified the elements of your lifestyle you consider essential to your retirement, you add ePREMIER retirement to your financial plans with the promise of another source of monthly income in your golden years. To balance your insurance expenditure with your other financial commitments, you distribute your premiums over 10 years, at S$6,036.10 per year.
Nobody knows how long they will live, but your guess gives you 20 years from retirement, and so 240 months to receive monthly retirement income payouts. This means that upon turning 60, you will receive a total monthly income of S$715.50^ (including guaranteed and non-guaranteed income), with the illustrated yield at maturity at 4.26%^ per annum.
In summary, you pay S$60,361 in premiums but stand to receive a total of S$171,720 by the end of your policy. That’s a 184.4% increase from your initial capital amount.
The above illustrated values use bonus rates assuming an investment rate of return of 4.75% per annum. Assuming an illustrated investment rate of return of 3.25% per annum, the total monthly income received is S$503.21 and the total illustrated yield at maturity is 2.81% per annum. The two rates 4.75% per annum and 3.25% per annum are used purely for illustrative purposes and do not represent the upper and lower limits on the investment performance of the participating fund. As the bonus rates used for the benefits illustrated above are not guaranteed, the actual benefits payable will vary according to the future performance of the participating fund.
Room to manoeuvre
It’s your retirement, and your choice how you’d like your finances to support you through the longest holiday of your life. ePREMIER retirement offers the option of receiving partial monthly payouts and a partial lump sum benefit when your policy matures (that is, after all monthly payouts have been received), or a full lump sum maturity benefit. You may also choose to accumulate your monthly payouts with Etiqa to earn non-guaranteed interest, and receive a full lump sum at maturity. If 10 years seem long for premiums, distribute your payments over 5 or even 2 years instead. You may also choose to retire later, at 65 years old instead of 60. With this much choice, the decisive power over your retirement finances reside firmly in your hands.
Calm in the eye of the storm
2020 has gotten off to quite the start. The crushing weight of COVID-19 on the economy is felt all around and panic is in the air. Retiring in this climate or perhaps a similar one decades later, can be a painful decision to make. Instead, choose today that your retirement should not be fraught with financial volatility, but a peaceful one – hopeful, graceful and well-earned. Read about ePREMIER retirement here or speak to our financial advisors.
This policy is underwritten by Etiqa Insurance Pte. Ltd. (Company Reg. No 201331905K).
Age means the age at next birthday.
As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid.
You should seek advice from a financial adviser before deciding to purchase the policy. If you choose not to seek advice, you should consider if the policy is suitable for you.
Protected up to specified limits by SDIC. This advertisement has not been reviewed by the Monetary Authority of Singapore.
Information is correct as of 30 April 2020.