My girlfriend was approached by one of the Great Eastern (GE) agents at an MRT station. She was recommended the Annual Cashback Endowment (ACE) Plan and her initial thoughts was it sounded good as there were cash back and the investor will get more than the premiums he or she paid. She asked me if it was a worthwhile plan and I shall share with you what I explained to her in this post.

Let’s assume the best case scenario which all the cashback are reinvested and allowed to compound till the end of 18 years. The returns from ACE plan was not able to beat the returns from STI ETF. Of course, some will say it is an unfair comparison because the premiums for ACE are mainly invested in bonds while STI ETF has equity returns. I do not think this is a concern because if I am an ...