IN the course of last few weeks, client and some parents asked me about some savings plan their young adult children has signed up.
This is not new, many walk past road show at MRT or malls and was talked into savings plan.
Nothing wrong with savings plan, but it is not priority, but young person with low interest environment are prudent as most just want to make their money grow than letting it rot in the bank.
If endowment plan is a consideration, then really need to consider, if you take a 20 years savings plan, you need not pay 20 years premium to maturity.
There are plans that you pay 5 years premium for 10, 15, 20 years maturity or even plan a specific year for maturity.
You may even choose a longer premium term like 10 years or 20 years.
There is no necessity to pay all the way, by shortening premium term, there is a discount factor and you pay lesser in total.
Paying full term premium may not be the best solution if you can pay a little higher. Paying full term premium is to whose interest, I need not explain here. Commission is higher.
Finishing paying the premium early allow you to review with budget for the need plan as it goes along.
Strange why many would take up a plan than come talking to me, some too late as commitment has been made :)
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