NTUC has just launched a new tranche of Capital Plus (CPN21) with immediate effect.

Capital Plus (CPN21) is a single premium short-term savings plan with guaranteed returns. This plan has tenure of 3 years, with a guaranteed maturity benefit. It also provides cover against death and total & permanent disability (TPD).

CPN21 offers a guaranteed return of 1.4% p.a. for a policy term of 3 years. There is an early surrender penalty of about 10% if the plan is surrender before maturity.

Capital Plus is available from ages 16 to 80 (last birthday), for amount starting from S$10,000, up to a maximum of S$1,000,000.

Upon death or TPD within the first policy year, the benefit payable will be the single premium. The death or TPD benefit payable after the first year up to maturity is 105% of single premium. For TPD, the benefit is payable if it occurs before age 65 (last birthday) or maturity, whichever is earlier.

Note that the tranche size is small and it is likely to be taken up in a very short time.

Capital Plus is available for cash and SRS only.

Next week, AIA will be launching the S$ 2Pay5 plan, a 5-year non-participating, limited 2-year pay product (Edit: The plan has been launched already).

How it works is that you will need to pay annual premiums for two years, and then receive a lump sum payout at the end of five years.

The plan offers a guaranteed yield ranging from between 2% to 2.2% depending on the annual premium amount.

• 2.00% :  $5,000 - $9,500
• 2.10% : $10,000 - $14,500
• 2.15% : $15,000 - $24,500
• 2.20% : $25,000 onwards

For example, if your annual premium is $10k, your maturity benefit will be

10000 x 1.021 x 1.021 x 1.021 x 1.021 x 1.021 + 10000 x 1.021 x 1.021 x 1.021 x 1.021 = $21961

Suitable Market

Individuals who require a guaranteed return of 2% over 5 years and does not have any immediate cash needs.

Unsuitable Market

Individuals who want short term liquidity.

Risks of the product

• Surrender penalty upon early withdrawal
• Automatic surrender due to non-payment of 2nd annual premium

The death benefit of this plan is the higher of total premiums paid (excluding advance premiums, if any) and the cash surrender value

The plan also provides for an additional 10% accidental death benefit in the first policy year.

If you are interested in this plan, you can contact me here.

POSB has teamed up with Aviva to offer a 5-year single premium endowment product that pays 2.25% interest every year.

This is a no-frills non-participating insurance product which also provides a sum assured of 101% of single premium for death or 106% of single premium for accidental death.

At the end of the 5 years, 100% of the premiums will be returned.

The minimum investment is $10,000 using cash only.

As a illustration, if you invest $10,000, you will receive $225 at the end of every year for 5 years and receive $10,000 when the product matures. You may not receive back the full principal amount if you surrender the plan before the end of five years.

AIA yesterday launched their new A$ Wealth Accumulator product.

AIA A$ Wealth Accumulator is a 4.5-year, non-participating single premium endowment plan. The guaranteed yields are as follows:

Single Premium Amount (A$)

$10,000 – $29,000 : 4.50% p.a.
$30,000 – $74,000 : 4.60% p.a.
$75,000 and above : 4.70% p.a.

As an example, a single premium of A$88k will give a guaranteed amount of A$108,204.80 on maturity.

Take note that this product is based in Australian dollars (A$) and the maturity amount will also be paid in A$. Thus, it might not be suitable for those who are averse to foreign currency exchange rate risk or who are unable to understand the implications of currency risk.

On the other hand, if you already plan to hold on to A$ long term or intend to use A$ for future needs (eg education funding or retirement), then the currency risk would be less of an issue.

This product is available for a limited period only.

As a comparison, current foreign currency fixed deposit rates for A$ is about 3-4% (depending on amount) for a 12-month duration.

So the AIA (A$) Wealth Accumulator gives a slightly higher yield but a longer lock in period. If there is an early surrender of the plan, then there will also be a slight loss in capital.

Surrender value based on A$1000 invested
End of Policy Year, Cash Value (A$)

1, 888.30
2, 982.80
3, 1,084.10
4, 1,162.70
4.5 ,1,219.10

NTUC Income has increased their tranche of Capital Plus (CPN16) and will be extending the offer of this plan till 21st December 2009 (next monday).

They will provide guaranteed acceptance for any application that reaches their office by 21st December, 5.00pm.

Looks like demand for these kinds of product seems to be tapering down.