Why Buying SRS Approved Insurance Plans?

SRS account holders may consider buying some insurance plans with the SRS monies.

The key idea is to diversify the SRS investment portfolio into a multi-asset portfolio for retirement planning.

In this article, we discuss why different investors should consider adding SRS insurance plans into their portfolios.

Based on the 2020 MOF SRS statistics, insurance is the second most invested class of approved products after “Shares, REITs, ETFs”.

26% of total SRS monies are invested in insurance products.

This is probably because most average investors usually find insurance products suitable.

Above all, it gives a better chance to counter the inflation while providing some level of certainty.

The unique proposition of guaranteed returns in Participating Policies

One key feature of insurance Participating policies is that it gives some level of certainty, with a portion of the returns guaranteed.

It is important to ensure a steady and healthy cash flow for day-to-day expenses during retirement.

Especially for families, insurance products are an important element of retirement planning.

Thus, the unique proposition of guaranteed returns offered by some insurance products makes it a good fit for retirement planning.

Moreover, there is also the possible upside of non-guaranteed returns in the form of bonuses in Participating policies.

Diversify into Multi-Asset Retirement Portfolio

For those who have a higher risk appetite and the investment know-how may go for unit trust or shares/REITs/ETFs investments.

However, these investors may not want to discount insurance products entirely because it can be really useful in diversifying the SRS Investment portfolio.

If 100% of the SRS monies were invested in Shares/REITs/ETFs & Unit Trust, consider this:

There is always a possibility of a market crash happening during the retirement age. Investors may have to wait for years for the investment to recover.
If investors planned to depend on the dividend payout from share as retirement income, the dividend payout may be affected or disrupted if another market crashing event like Covid-19 happened again.
Investors may not want to or not be able to continue managing such high-risk portfolios into old age.

Thus, diversifying SRS investment into a multi-asset retirement portfolio may help to address these concerns.

The relatively better predictability of insurance policies returns will come in handy in the future.

Therefore, investors may want to consider allocating a portion of the SRS investment in insurance products.

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This page Is published for general information only and does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person. Refer to Important Info below.

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The information contained in this website is provided to you for general information/circulation only and is not intended to nor will it create/induce the creation of any binding legal relations. The information or opinions provided do not constitute investment advice, a recommendation, an offer or solicitation to subscribe for, purchase or sell the investment product(s) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person or group of persons acting on this information. Investments are subject to investment risks including possible loss of the principal amount invested. The value of the product and the income from them may fall as well as rise.

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Date: 26Nov2021