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Navigating endowment plans: Understanding what you buy is a must

Returns from endowment policies are subject to a number of factors, such as bonus rates and withdrawals, that would affect their maturity value and death benefit.

RECENTLY, a news report in The Straits Times drew attention to the plight of a customer in her late 60s who bought an endowment plan at a bank. She discovered to her dismay that when she wanted to terminate the plan after three to four years, she would suffer losses of more than S$100,000, and the death benefit was not what she expected.

As the case is expected to be arbitrated by the Financial Industry Disputes Resolution Centre (Fidrec), this column will not mention the product name nor the bank. The article raises the question of whether the client was "tricked" into an "unwise" investment decision, or suffered buyer's remorse.

It is also that the case reflects a misunderstanding on the part...

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