In a rare case of “happy endings” with insurance companies, I sold my NTUC endowment policy that I bought during my NS days to a company that buys them. After calculating the quoted value that REPS Holdings gave me (using the spreadsheet from InvestmentMoats) by e-mail, versus the internal rate of return on the total value of premiums paid till date, it was at an “acceptable” value of -1.53%, which is around the cost of a fund manager’s fees for a unit trust.
Some of you might ask, why would I want to sell it? Well, silly me did not plan for this endowment properly as a 21 year old fortunate son back in 2004, and thus resulted in me taking up a cheap but long endowment plan (30 years!), and by the time I reach 51, the sum would be trivial compared to what I could be earning at that age. To a certain extent, I am betting that I would be in good health and earning more than what I can take home monthly right now, and I think it is a fair risk to take.
In hindsight, I should’ve taken up a 10 or 15 year policy, so that I can cash out the policy at the correct timing (married at 30, or getting a BTO flat at 35), but what’s done is done.
The selling process was quite “manual”, but professional – a representative from the company met me at the NTUC building at Bras Basah, and the policy was “sold” by assigning the policy to REPS Holdings. During the process, I was issued a cheque upfront from the company (based on quoted value minus the policy loan value – probably as an exchange of goods and/or services as required under Contract Law, I guess?), and the rest of the money would come from the policy loan which “I” took up and mailed to me (again, this would make the process seem more “legit”, I would think, rather than just signing some documents while getting nothing in return – like insurance *cough, ahem, cough*).
After signing the documents, I cashed in the cheque, and cancelled the GIRO payment for the policy via Internet Banking (due to my recent experience in setting up a GIRO payment from one bank to another bank, the GIRO form was rejected due to my signature not matching the bank’s records, which is obviously nonsense from the originating bank, so I set it up via internet banking. LOL!) and waited a couple of days for the cheque, and the letter of confirmation/endorsement from NTUC to arrive by post.
So what did I do with the $4,000? Well, I blew the $4,000 on stocks within two weeks. YOLO!
(Just kidding, I bought some stocks which I did my due diligence on.)