Hi all,

I was approached by a friend to sign up a savings investment plan from Hong Leong Assurance called Cash Promise.

Basically you have to save a minimum RM6000 each year for 6 years without withdrawal if possible.
For example, if you save RM10,000 every year, there is a guaranteed yearly income of RM2020 and cash dividend of RM 202 each year.
You can withdraw the money anytime after 6 years.

The plan sounds very good.
Is this a scam or is that possible that HL Assurance not paying you when you want to withdraw all out after 6 years?

Seems like HLA has come out with a new plan. The previous old plan is called Income builder and it works similarly to this.

Every year "Pay Premium" (not savings cause this is an endowment plan, basically u are buying the plan not saving" 10k till year 6.

You have to lock up your 60k (assuming you paid 10k every year) up to year 20 only you can enjoy the maximum payout of this plan, which is 4.7x% for the old plan. I have no idea whats the new plan like so I might be wrong.

You are actually paying the premium and the guaranteed income is actually a rebate to you. In short, you are taking your own money. If you were to withdraw every single years guaranteed income, in the end of 20 years you surrender your policy, you get like 20k left only.

Unless you were to commit yourself 20 years not to touch the money, and yet you are getting just a mere 4.7% worth of interest only.

Might as well go take the money to buy REITS/ Bonds/ Unit trust, which will give you better returns and ALOT more liquidity, you can take your money out within 5 working days.

Fully agree...

is not scam
if you are type of person prefer save money then you can go for it
but don't commit too high; always have spare for buy house/marry/emergency
some person they prefer invest themselves e.g buy share, gold or property..

Yes. Is same. Wonder what the management is doing!

Hi, I am agent from Hong Leong Assurance.

This investment plan is not a scam by the way.
According what you have mentioned, the guaranteed yearly income of RM2020 is actually u can withdraw 20% of your saving.
By doing that, you will affect the return rate of maturity period which 25 years with 250% and above.

Bro.. what is the annualize return until 25 years?

this is not a scam but alot of agent misrepresented the data...

according to the HLA website, this is a 25-year participating endowment plan with Guaranteed Yearly Income...

a simple calculation shows that u get back RM50,500 (25 X RM2020) after putting in RM60000 for 25 years...
(compound interest and non-guarantee returns not factored in yet)
this yields a 3.36% return p.a. ... ironic since HLB have FD promos all the time giving 3.6% - 3.8% p.a. interest

if in doubt, ask the agent to show u the projected returns spreadsheet...

i hope the agent didnt tell u get back 20.2% return p.a. (it is true for the first RM10,000 ) a couple of agents actually told me that...

btw, the cash dividend is not guaranteed...

Sounds good, but you have to perform your due diligence
Find out what's the IRR.
Determine your own needs. It's not like the agent approach you, then you're influenced to purchase due to the "seem-to-be" attractive returns.
It is all depending on your financial needs and plan. Once you understand your needs, you can tell whether this plan is suitable for you or not.

The annualize return is different every year. The early u give up the contract, the lesser you will get.

If between 25 years you dint not take any money from your saving plan, after 25 year average 250% return rate of your saving amount.

This post has been edited by deanwong38: May 10 2013, 09:41 AM

Bro.. say didnt take out any money until 25 yrs. The annualized or IRR will be?

Deanwong,

You're the one should go back to school, there's no such thing as 250% return for a saving plan, saving do not guarantee a high yield return of portfolio, saving usually do not have high charge, that including all sorts of charge including purchasing units or properties that expect to give a better returns. agents are authorized by big corporation to utilize their banking or financial service to the public, agent are usually good in making money but not good in making you wealthy enough.

Usually it yields from 3.3-4.7% of IRR for most of the saving plan in Malaysia. Well, I'd say the guaranteed part usually falls about current FD rate which is 3.3%+

Then it not worth it, due to the lock in period.

Lock in period is forced savings, its not investment. The purpose is to keep aside some funds so that in the future, you can use it to fulfill your financial goals. For investment, better invest in stocks and equities. But higher returns come with higher risks.

Better to save a little aside than to spend it all up.

Forced savings?

bwhahaha.. pardon me, brought back a flood of memories from bullkaka-ing insurance agents from yester-years.
my "forced savings" for 12years+ came up to be less than 5%pa CAGR... and that was DURING KLSE's GOLD BULL RUN (80s) with FD rates hitting a high of 12%-13% for 1 year's tenure.
seriously.. "forced savings" should be forced in FD until one finds better things to do with the $, unless one is as stupid as me during when i was 19.

BTW, those days no Internet, nor forums, nor plentiful of personal financial planning books/magazines, thus people nowadays should be smarter UNLESS they CHOOSE to be lazy & stupid right?
Just a thought

This post has been edited by wongmunkeong: May 11 2013, 10:34 PM

U must be one of those THEY hired to count the votes or people @ Kelana Jaya stadium

Thank U for proving that nearly all insurance flers flogging HLB's products can't count.
250% for 25 years' average?
Can U provide a ZIP Excel file OR a GDOC spreadsheet to show the magic ar?

BTW, we talking about annualized return right?
Not simple total gross returns right?
U know the difference ya?
OR U are just trying to do "magic" - talk CAGR/pa compounded returns THEN SUDDENLY <lights off then on> show total simple (ie. end total/start total)?

This post has been edited by wongmunkeong: May 11 2013, 10:42 PM

I think endowment us for those with spare cash and do not want the hassle to shop for better fd rate around every year. Personally I have been approached by those bank office in uob. Verbally they say guranteed which is bs.
Always ask for quote. There will always be a scenario A and scenario b. do your calculation from there. When I did the calculation it's between 4.6% best case to 3.01% worse case. This us for investment if 10k annually for 5 years for the period of 15 years.

Put inflation into consideration .... Like getting nothing?

You can't withdraw all after 6 years. If you have extra cash then u can do so. Just an opinion.