Monday, 13 July 2015

My Insurance and Annuity Returns

*Credit to Kyith from Investment Moats for the XIRR template used to calculate internal rate of returns in irregular interval. Kyith's template is pure art.

Here are my findings** on my insurance plans using the XIRR template:

1) Manulife 20 years limited pay - 3.65% returns over 40 years
2) NTUC income whole life - 4.29% returns over 40 years
3) NTUC income 20 years limited pay - 3.23% over 35 years

Here is my finding** on my annuity plan:

1) NTUC income annuity - 5.14% returns over 47 years

**Please note:
a) Based on the 5.25% or the higher tier illustrations used in their surrender value table.
b) It does not include any rider's premiums as they are pure protections with no return expected.
c) NTUC income 20 years limited pay don't need additional rider for critical illnesses benefits, therefore the returns should be higher than shown.
d) Please also note that the 5.25% illustrations used by insurance companies include their commissions, so it is not really 5.25% as shown with my calculations above.

Sanity Check

1) I have requested my agents to show me cases of matured policies and they were paid out more than the 5.25% shown.
2) I have also tallied the bonuses declared yearly to me, against the surrender value table; it is similar to the 5.25% / higher tier used.

Hence, I used 5.25% / higher tier as my projected returns. However, I will be mindful that the returns could be potentially much lower.


I bought my insurance and annuity plans many years back when I don't have as good financial knowledge as I have now. My insurance plans are for protections and the returns are better than the banks deposits I can find during my early-mid 20s. My annuity plan don't have insurance elements and it is supposed to be for retirement purposes.

If I would to buy terms and invest the rest, I could have achieved financial independence earlier, however, with much higher risk involved.

I will definitely not add in any more annuity and insurance as my coverages have reached my minimum comfortable ranges. There is no point for over-insured.

I have done my sanity check on my insurance and annuity plan, have you?

Frugal Daddy

***Disclaimer: Please seek your financial advisers for advice on financial decisions as this is purely for my personal consumptions. I hold no responsibility to any other as situations vary. Please note that my illustrations above may not be applicable to your case.


  1. Thank you for sharing these pieces of information you have gathered. It’s nice to know that you are always keeping your financial status in check. It is something that most people fail to keep track of, but it is important for the security of one’s future. Good day!

    Lucrecia Finnegan @ Sherri Bailey

    1. Hi LF

      Greetings from Singapore!

      From your livejournal, can tell you are an insurance expert. I wonder how different US and Singapore's policies.

      Understanding personal risk and wealth management is critical to a better life.

      Good day!

      Frugal Daddy