Everything on ELASTIQ by Etiqa (Universal life plan you should see!)

This is my analysis on this universal life plan called ELASTIQ
(You know like elastic aka flexible... get it? haha).
I'd touch on why I think it's a simple to use and indeed elastic.

How does this compare to endowment plans in the market and Singapore Savings Bond (SSB)?

One of the closest plans to compare it against is the 3y Singlife endowment plan.

Singlife has a 3y endowment plan that gives you 2.2%p.a for a 3y term guaranteed.

The key difference is that the Elastiq plan allows you to freely top up and withdraw (subjected to keeping $5k there to avoid charges based on their T&C).

While the Singlife 2.2% endowment plan has some partial surrender and free withdrawal option, it is meant to be kept till maturity.

If you choose less flexibility with Singlife, you get 0.18%p.a more.

How does it compare against the Singapore Savings Bond SSB?

The key difference is that the Elastiq plan guarantees rates for first 3 years only while the SSB has rates guaranteed for 10years. 

If interest rates fall, the Elastiq plan's interest crediting rates can become lower after 3years.

But if interest rates continue to rise, the Elastiq plan's interest crediting after 3years will likely become higher than 2.02% because they follow a "prevailing market rate" method.

This is the current SSB rates for the JUN2019 issue.

For 3year period, you get a bit more (0.14%p.a more to be exact) with Elastiq plan.

Looking to learn more on the Singapore Savings Bond SSB! Check video out =)

For the Etiqa plan, interest is credited every month for the Elastiq plan.

You will get a prorated coupon with the SSB also if you sell it off before the coupon period. This was highlighted by one of the readers.

Also, the Elastiq plan allows you to freely top up and withdraw (subjected to keeping $5k there to avoid charges based on their T&C). SSB requires you to pay the $2 at every buy/sell.

Manage your finances with it after 90days

For the Elastiq plan, surrender value is at least the principle from Day1.

After 90days, you can make changes to the plan.

Firstly, for withdrawals, keep a minimum of $5,000 inside the policy and withdraw at minimums of $500.

Secondly, for top-ups, add a minimum of $500 to the policy at each time.

Thirdly, you can create a recurring monthly top-up request of minimum $500.

This feature is like a "regular savings plan" in design. Also, you avoid a $2 charge everytime you purchase a SSB. If your goal is to save $500 every month, the charges avoided in SSB may amount to quite a bit.

I guess the greatest benefit of this Elastiq plan is if you use it as a FLEXIBLE SAVINGS WALLET.

Not an ILP (investment-linked plan) but a universal life plan (UL)

This question was posed on the Seedly platform. 

It is NOT an investment linked plan but a universal life plan (UL).

As you see from my reply above, there is no investment risk that you bear. Capital guaranteed.

What is Universal Life plan based on Etiqa Singapore's definition?

Universal life plan is a whole life insurance that offers flexibility in the amount and timing of premium payments. This plan pays a death benefit and allow build-up of cash value through offering interest crediting rate. Our universal life plan offers a guaranteed minimum interest crediting rate.

What is Universal Life plan based on my understanding?

There are many USD universal life plans out there for the high net worth.

But they are different to this which is more of a retail product. Universal life plans has two key features.

Firstly, it is a permanent policy as in it is till your age of 100 before maturity.

Secondly, it is based on a transparent interest crediting (for this plan 2.02%p.a guaranteed).

This method is unlike a traditional Participating (PAR) whole life plan where the insurer declares bonuses only at year end.

Why the difference between universal life plan and a PAR plan?

A universal life plan buys fully into bonds (possibly entirely).

For Elastiq it's possibly entirely into safe singapore dollar dominated bonds.

On the other hand, a Participating (PAR) whole life or Participating (PAR) endowment plan invests like 20-40% into equities.

It's returns fluctuate because of it. Hence, the Participating (PAR) fund has a non-guaranteed component.

Click here if you want to see a policy document.

Elastiq referral program that you can tap too.

To get the first leg of the 0.5% of policy premium promotion, you can input referrer code R99327 and be my friend. I didn't have one to input on my first leg unfortunately.

But here, this is my referrer code:

For $5,000, that's $25 Etiqa eWallet credits.

Updates: The referral program that is till 28Feb2019.

I splited up the original $10k I set aside to put as $5k for my account and $5k referring my wife's account.

With the second account, I qualified for the referrer and referred component.

You can use this idea too if you don't mind having 2 accounts.

Taka Vouchers collected

Take note that the 0.5% Etiqa eWallet credits issued under this Program CANNOT be converted to cash. Perhaps just use it for travel plan purchase with Etiqa? 

Credits come in after about 8weeks only. Click here to read the T&C of the promotion. 


PS: In the coming year, I expect more insurers to launch a similar product to this by Etiqa Singapore. 

It is a key reason why I wanted to try using this product.

Disclaimer: The above information is fully of my personal view

Disclosure: I do not distribute Etiqa Singapore's products professionally. I'm currently a user of the plan.

If you have an alternative view, leave them in the comments section below!

Last updated on October 15th, 2019 at 12:26 am

Josh Tan Jian Liang (CHFC) Principal Author

REVIEWS: https://www.josh-tan/wall-of-reviews. Practising financial planner with Promiseland Independent Pte Ltd. EXPERIENCE: More than 12years. Josh Tan is a young parent, speaker, author and founder of TheAstuteParent.

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