Skip to Content

Withdrawal of a high return annuity policy

Yesterday my good friend forward me this sale proposal on this variable annuity policy.

This policy looks ideally suited for retirement.

Majority of the annuity policies look bad because the returns are around 2-3% and people think its highly dependent on how long you live.

For me, there are other benefits of annuity. For one, if your retirement savings is large enough, you can actually lock in a good lucrative fixed payout. This payout can be used to cover daily expenses.

Remember! I am not saying all your retirement  funds go into an annuity, think of this as the cover for your daily expense account.

For more on Annuities and their rate of return, read this article I wrote previously.

Withdrawal of highly popular high guaranteed retirement plan!!

With effect from 30th April 2013, the only Guaranteed + Perpetual Payout plan for retirement planning will be withdrawn from accepting further new business. This month will be the last month for you to consider this very ideal tool for retirement planning due to its high guarantees and its perpetual payout feature, combined with a capital preservation feature.

Summary of Product Features:

    • Example case of John age 37
    • Save for his retirement in the next 15 years
    • At age 60, he will start to receive a Guaranteed payout of 8% of his capital for the rest of his life
    • His base capital does not drawdown despite the yearly payouts and will continue to appreciate!
    • He has 2 Options during retirement:
      1. If he has no dependents, he can choose to surrender the plan in the later years and enjoy for the last few years of his life OR
      2. If has children or dependents, he can choose to receive the guaranteed payouts and leave the capital plus bonus as an inheritance for his children

A numerical example will look like this:

  • Assuming John save $10,000 a year (ie around $864/mth) for 15 years
  • Total saved will be around $150,000
  • Starting age 60, he will receive a guaranteed lifetime payout of 8% of his capital (ie $12,000/yr guaranteed) for rest of his life
  • Option 1: If he choose to surrender in the later years, say at age 80, he would have received $12,000 X 20 = $240,000 guaranteed payouts PLUS a surrender cash value of around $220,000 (of which $157,440 is guaranteed). Hence a total of $460,000 of which close to $397,440 is guaranteed!
  • Option 2: If he choose to hold it till death because he wants to leave something for his beneficiaries, say if he moves on at age 85, then he would have received a total of $12,000 X 25 = $300,000 guaranteed PLUS a death inheritance of around $360,000! Making it a total of around $660,000!
  • Remember be it Option 1 or Option 2, he only saved $150,000 in total only!


This is currently what I would consider probably the best retirement plan because it combines:

  1. High Guarantees
  2. Perpetual of Payouts (Hence security of retirement even if one live till a ripe old age)
  3. Preservation of capital despite the payouts*

Note: I am not a financial advisor providing this  policy.

This looks like a good plan on paper. How do they get a 8% return? You have to go back to the previous article I point you to up there.

Its not hocus pocus (well not all of it). But think from a retiree or going to retiree perspective.

My friend says its from Tokio Marine.

I look at it this way:

  • The reason why the insurance company is likely to pull a product is if its not selling well OR their pay out versus premiums is actually disadvantageous to them
  • The devils may be in the protection against inflation (if there aren’t, 8% is rather high versus inflation rates)
  • The devils may be in how the surrender is structured

If you know more about this product perhaps you can share your thoughts.

To get started with dividend investing, start by bookmarking my Dividend Stock Tracker which shows the prevailing yields of blue chip dividend stocks, utilities, REITs updated nightly.

Make use of the free Stock Portfolio Tracker to track your dividend stock by transactions to show your total returns.

For my best articles on investing, growing money check out the resources section.


This site uses Akismet to reduce spam. Learn how your comment data is processed.


Monday 29th of April 2013

hi, i went to TM website and the closest product i found was retirement life and it pays only 5% every year upon retirement, not 8%??!

Which product are you referring to?


Thursday 25th of April 2013

Hi drizzt, what is the name of this product. Can email me? Thankks


Sunday 28th of April 2013

I think that's NTUC vivosave. But the effective IRR is just 4%+, and this plan is more to pass on the legacy to children.


Thursday 25th of April 2013

Where can I find out more about this product?


Thursday 25th of April 2013

Hello Drizzt

sorry for posting an unrelated question.

Following your divi stock tracker, I'm long Rickmers and its quote was 0.34. On just one day, it's dropped to 0.30 and most Websites tell it's gone up !

Was there some kind of distribution ? (I cannot find any news on this), and the small divi is still far away.

Can you please explain what happened ?

Best Regards

-- Habsb


Thursday 25th of April 2013

hi, Rickmers went ex rights.


Thursday 25th of April 2013

Damn if the product is lousy (agent cheating people). Damn if the product is good (insurer cannot sustain - hence agent cheating people).

Singapore are just whiners. Get a life.


Thursday 25th of April 2013

You seem to have a serious problem....

This site uses Akismet to reduce spam. Learn how your comment data is processed.