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Singapore Life launches endowment plan with guaranteed interest and no penalty get-out clause

SINGAPORE Life is launching its third endowment plan which guarantees clients 3 per cent interest per annum for up to S$6,000 per application over a lock-in period of three years.

For amounts above S$6,001, an interest rate of 2.2 per cent applies.

Singapore Life chief executive Walter de Oude said that the fund was made for low-risk appetite investors who are looking for higher yields than what is currently available from retail institutions.

In a news release on Friday, the local insurance company said that this is the first plan in the market with a no-penalty get-out clause. Policy owners can partially withdraw for free by lowering their single premium without incurring surrender charges or interest fees.

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The free withdrawal option is pegged to several caveats:

- Medical: If the policyholder or spouse is certified by a registered medical practitioner to be physically or mentally incapacitated from employment; have a severely impaired life expectancy; lack capacity within Section 4 of the Mental Capacity Act (MCA) and the lack of capacity is likely to be permanent; or be terminally ill.

- Life stage event: If the policy owner gets married or becomes a parent via childbirth or through legal child adoption; or purchases a new home.

- Financial distress: If the policyholder gets retrenched involuntarily.

The death and maturity benefit will be revised according to the remaining single premium.

The maximum partial withdrawal amount is the lower of S$50,000 or 50 per cent of the single premium paid. It will also have an accidental death benefit of up to 105 per cent per single premium.

Consumers can register their interest from Nov 23-25, and purchase the policy online from Nov 26-29.

Singapore Life’s endowment plan series was first launched in August 2018 for a week – offering a guaranteed interest rate of 2.12 per cent per annum over three years. The second tranche was opened in October 2018 and offered a guaranteed interest rate of 2.15 per cent per annum. The average amount invested was S$28,000 per application.