Any annuity insurance can stop payment if happens that more and more people claim and less and less people join. Or if every annuitant lives to right old age of 90 to 100 and no new members join, (just for logical argument) if this worse case happen, i don't think i am calling the bluff. Every type of insurance has some clause or clauses to cover their backsides (limit their liabilities).
Even Universal Life Insurance that people buy in Millions of Dollars to create a legacy for their descendants, has it's limited liabilities. There is no 100% guarantee in any type of insurance in this world. So who is calling the bluff. i am indeed very wary of any insurance products no matter who is pushing or selling it. i am scared indeed. If you are not, good for you. Period.
(05-09-2012, 11:52 PM)Temperament Wrote: [ -> ]Any annuity insurance can stop payment if happens that more and more people claim and less and less people join. Or if every annuitant lives to right old age of 90 to 100 and no new members join, (just for logical argument)
May I take a look at the particular annuity insurance's T&C that has the above clause ie. stop payment if there are less people joined?
From CPF WebSite
Q: Why not have guaranteed minimum payouts for CPF LIFE?
A:
For the scheme to be sustainable over the long term, payouts have to be adjusted periodically to take into account factors such as actual mortality experience and investment returns. As such, CPF LIFE does not have a guaranteed minimum payout.
Nevertheless, CPF LIFE monies are invested in special Singapore Government bonds which has a guaranteed minimum interest rate of 2.5%.
See
http://ask-us.cpf.gov.sg/efa/answer/inde...EFA_000631
(06-09-2012, 07:30 AM)yeokiwi Wrote: [ -> ] (05-09-2012, 11:52 PM)Temperament Wrote: [ -> ]Any annuity insurance can stop payment if happens that more and more people claim and less and less people join. Or if every annuitant lives to right old age of 90 to 100 and no new members join, (just for logical argument)
May I take a look at the particular annuity insurance's T&C that has the above clause ie. stop payment if there are less people joined?
Sorry, as i said it is "(just for logical argument)". It means no annuity insurance or any insurance is 100% guarantee. The possibility of collapse if certain conditions happen is always there. So is any thing in this world.
If we reach that stage where more people claims, isn't that reflect the more importance of the CPF scheme ?
I remember i saw an article related to CPF LIFE. The article compared the T&C with private annuity with similar insured amount. It's proven that the CPF LIFE is having a better T&C vs private annuity. It has higher payout and longer payout period.
Once i retrieve the article, i will post it.
PS. TKL's blog also encourage retirees to join CPF LIFE.
(05-09-2012, 11:52 PM)Temperament Wrote: [ -> ]Any annuity insurance can stop payment if happens that more and more people claim and less and less people join. Or if every annuitant lives to right old age of 90 to 100 and no new members join, (just for logical argument) if this worse case happen, i don't think i am calling the bluff. Every type of insurance has some clause or clauses to cover their backsides (limit their liabilities).
This is a fallacious statement unless you are calling it to a Ponzi scheme, a la US Social Security or unless you have grounds to believe that the actuary behind the scheme is way off in his assumptions.
Sorry, (just for logical argument). Though the reasons stated maybe possible or not possible is up to your own opinion or sense of "judgement".
Example: Quote from
nsengkia
Q: Why not have guaranteed minimum payouts for CPF LIFE?
A:
For the scheme to be sustainable over the long term, payouts have to be adjusted periodically to take into account factors such as actual mortality experience and investment returns. As such, CPF LIFE does not have a guaranteed minimum payout.
Unquote:-
This is an example where the CPF LIFE (a kind of annuity scheme actually) covers its backsides. Though it may have other positive attributes.
But for me i can't accept :- "As such, CPF LIFE does not have a guaranteed minimum payout."
i would rather have my "min sum" guarantee a payout until it disappears. i think most 55+ & above, when CPF LIFE was introduced, chosen to opt out for many other reasons too. Don't ask me for statistical proof. If you must, i can only tell you, 55+ at that times did have "coffee-shop" talks.
NB:
May i add the GOV offers of "Bonus $" if you delayed withdrawal of your CPF MIN SUM until age 65 is a very good move for those who can take advantage. Especially now Banks are paying worse than peanuts in interest rate. Of course you must have some cash fund to tide you over for the delayed period of 3 to 5 years. In this way you are setting up your "own annuity" in a way. Of course i opted in. Sorry for those who can't take advantage due to one reason or another.
And for those who reach the withdrawal age of 65, can even consider delaying even longer if they think it is more "beneficial" for them to do so. They then can have a "perpetual standby annuity scheme" from the GOV. i think unlike US GOV, our GOV doesn't stipulate a compulsory withdrawal age.
Amen.
If the government is guaranteeing the payout of CPF LIFE, as a taxpayer, I would be wary because I doubt that there is any possible way for any government to guarantee that without eventually printing it out. Of course, even if the government does not guarantee it, still it may eventually just print it out; but at least, I hope the government will not do that unless necessary.
(06-09-2012, 01:44 PM)freedom Wrote: [ -> ]If the government is guaranteeing the payout of CPF LIFE, as a taxpayer, I would be wary because I doubt that there is any possible way for any government to guarantee that without eventually printing it out. Of course, even if the government does not guarantee it, still it may eventually just print it out; but at least, I hope the government will not do that unless necessary.
Ha! Ha! Ha!
Now you tell me.
A very good twist. Well put!
That shows either this or that, we can't win the GOV. of the day.
So what ever we think or do, who actually has the last say?
Your guest is as good as mine.
A very good one.