OCBC MaxGrowth Enhanced is an anticipated endowment offered by OCBC bankers. It is commonly seen during roadshows and often positioned as a ‘savings plan’ which offers higher interest rate as compared to the savings account. There are two options for policy term of 10 and 15 years
The premium payment term is only 5 years as the premium for the remaining policy years will be offset by the Survival Benefit (100% of the annual premium) from the end of the 5th policy year to one year before maturity.
For the policy term of 10 years, there is a prepayment option available. This policy is a guaranteed issuance offer policy with no medical underwriting.
Image is taken from ocbc.com
Pros of MaxGrowth Enhanced
- Short payment term of 5 years or a single prepayment for the 10 years option.
- The interest rate offered is potentially higher than the bank deposit rates
Cons of MaxGrowth Enhanced
- Based on the above from OCBC website, the guaranteed yield is -1.42% p.a. for a 10 years plan with 5 years limited payment. There are endowment plans that give a higher return with similar policy period.
- The guaranteed and projected yield is 2.60% p.a. Again, there are several endowment plans from other insurers that give a higher guaranteed return.
- While the prepayment option gives a 5% discount (that translate to a saving of $2,801.25), the guaranteed and projected yield is 2.61% p.a. and the guaranteed yield is -0.62%. Hence, the yield is also not competitive
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Before you commit to the OCBC MaxGrowth Enhanced plan, we commend you to read one of our most read article on “8 Things to consider when you buy an endowment (savings) plan”