Best Lifetime Income Plans in Singapore
Having a steady flow of cash flow is vital in financial planning. A positive cash flow ensures the health of your financial plan. The best lifetime income plans let you achieve your financial goals, be it getting a mortgage, taking a vacation or planning for retirement.
The idea of creating your own lasting source of cash flow and annuities through an income plan is slowly gaining prominence. Insurance companies have started designing income plans to help you build a supplementary stream of cash flow (apart from your daily income).
If you are considering getting an income plan to create a lasting source of income for yourself and your loved ones, there are three plans you can consider:
- Best Lifetime Income plan for Most Flexible Premium Term – Aviva MyLifeIncome,
- Best Lifetime Income Plan for Highest Non Guaranteed Income – NTUC Income Vivocash Prime
- Best Lifetime Income Plan for Multi Generation – Manulife Ready Income.
Each of this income plan brings an interesting value proposition for you and me for wealth planning. But first, let’s understand how income plans work.
Understanding How Lifetime Income Plans Works In 4 Simple Steps
While you might find convoluted explanations of how income plans work, here’s how an income plan works for you, in 4 simple steps.
- Choose your desired yearly income, accumulation period and premium payment term
- Based on your chosen features, the insurer decides the amount of premium that you need to pay. Then, pay your premiums for the chosen premium payment term
- Let your capital accumulate through the accumulation period and wait for your yearly income to begin
- Once your accumulation period is over, you can start receiving a lifetime of yearly income from your insurer until you die or surrender.
Battle Of The Lifetime Income Plans: Aviva MyLifeIncome vs NTUC Income Vivocash Prime vs Manulife Ready Income
Now that you understand how income plans work, the next step is to find the one that best suits your financial planning needs. Before we dive into what we like about each income plan, here’s a quick summary of each of them, aka TL: DR version.
|Aviva MyLifeIncome||NTUC Income Vivocash Prime||Manulife Ready Income|
|Premium Payment Term Options||Single Premium, 3, 5, 10, 15, 20, 25 years||5, 10, 15, 20 years||5, 10, 15, 20 years|
|Riders||Cancer Premium Waiver
EasyPayer Premium Waiver
|Premium waiver||Premium waiver|
|Cash Payout||2.2% p.a. of Sum Assured Guaranteed
(estimated: 1.7% Sum Assured)
|2.1% p.a. of Sum Assured Guaranteed
(estimated: 2% Sum Assured)
(1% of SA for policy year 2-9, 8% SA from policy year 10 onwards)
(1.25% for policy year 2-9, 10% from policy year 10 onwards)
|Special Features||Capital guaranteed from 5th policy year onwards
Flexible premium term
|Special cash payout in 20th, 30th policy year
Centennial maturity benefit at age 100
|Yearly cash payout starts from 2nd policy year
Legacy planning freedom
2 Things We Like About Aviva MyLifeIncome
Aviva MyLifeIncome Guarantees Your Principal Capital Even While You
One of the most salient points about Aviva’s MyLifeIncome is the capital guaranteed feature.
As your yearly income starts to flow into your pocket, there is a guaranteed surrender value on your income plan. The guaranteed surrender value acts like a cash value in your plan. It is equivalent to the total amount of premiums you have paid across your premium payment term. This guaranteed surrender value can be encashed any time after you start to receive your yearly income.
You can think of Aviva’s MyLifeIncome as a “savings” that continues to pay you a yearly income to keep your money in the savings account. At the end of the day, you have the option of withdrawing your savings, thanks to the guaranteed capital feature. But if you keep your money in the “savings”, you can continue to receive yearly income of up to 6.2% of the money in your “savings”. That’s a pretty neat income just for investing your money with Aviva.
Aviva MyLifeIncome Has A Flexible Premium Payment Term
Aviva’s MyLifeIncome has more premium payment term option. You can choose to make a single premium term or opt for premium payment term ranging from 3 to 25 years. This allows you to customize the premium payment term that suits your personal cash flow.
2 Things We Like About NTUC Vivocash Prime
Source: NTUC Income
Highest Non-Guaranteed Cash Payout
NTUC Income’s Vivocash Prime offers a non-guaranteed cash portion of 2.1%. This puts NTUC Income’s Vivocash Prime as the highest non-guaranteed cash payout plan among all 3 income plans. In addition, with the guaranteed cash payout of 2%, this puts the overall cash payout of NTUC Income’s Vivocash Prime as the highest among all 3 income plans. Coincidentally, NTUC also has the best performing Par fund among the 3 insurers over the last 10 years (Refer to policy illustration)
Vivocash Prime cash payout = Guaranteed (2%) + Non-guaranteed (2.1%)
Special Cash Benefit Feature For Long-Term Policyholders
Besides the yearly cash payout that you will receive, NTUC Income’s Vivocash Prime also makes a special cash payout. This special cash payout is worth 4% of the sum assured on your policy and is made in the 20th and 30th policy year. The policy year is the number of years since inception of your policy, i.e. from the first year you start paying your premiums.
If you are planning to invest your money in an income plan that lasts for decades, you might want to consider NTUC Income’s Vivocash Prime. The special cash benefit feature can effectively boost the income that you will receive by ~10%. It can fund that holiday that you have been dreaming of.
2 Things We Like About Manulife Ready Income
Cash Payout Starts As Early As 2nd Policy Year
Manulife’s Ready Income comes with a cash payout feature that starts as early as the 2nd policy year. This means that 1 year after you start paying premiums for your plan, you will receive 1% of your sum insured (guaranteed + 1.25% non-guaranteed) annually till the 9th policy year. From the 10th policy year onwards, you will continue to receive 8% (guaranteed + 10% non-guaranteed) of the sum insured for life.
Ideal For 2 Generation Worth Of Annuities
While Manulife’s Ready Income doesn’t come with the best cash payout or guaranteed capital feature, Manulife’s Ready Income is perfect for legacy planning. Thanks to its legacy planning feature, you have the freedom to transfer the policy to your child when he/she turns 18. Through Manulife’s Ready Income, you do not have to incur any wealth transfer tax. This makes Manulife’s Ready Income the perfect income plan if you are thinking ahead to leave behind a legacy for your children.
Here’s how Manulife’s Ready Income works for you as a parent. Let’s say you have a newborn child. You purchase Manulife’s Ready Income with your newborn child as the insured life. You pay the premiums till your child turns 18. After which, the Ready Income plan gets transferred to him/her. He/she starts receiving yearly cash payout until he/she passes on. Upon passing on, your child leaves behind a lump sum death benefit for his/her child (i.e. your grandchild). This essentially makes Manulife’s Ready Income an ideal legacy planning tool for 2 consecutive generations.
Finding THE ONE For You Can Be Easy
Since each income plan comes with its own set of unique features, it is important to find THE ONE that suits your financial needs. While it might sound difficult in theory, it can be very easy in reality. Let us know your income appetite and we will structure the best policy that suits your needs.