PRUFlexi Cash 2021 Review: Should You Get This Popular Plan?
Singapore Financial Planners Log

Table of Contents

PRUFlexi Cash Review: A Popular Endowment Plan

Articles written are independent opinions, and are not affiliated/sponsored unless specifically mentioned.

pruflexi cash review

Hedge yourself from unexpected situations life throws at you with a participating endowment plan like PRUFlexi Cash, which provides the flexibility of receiving benefit payouts every year.

Criteria

  • Minimum premium payment period of 15 years

Features

Policy Terms

Choose between a policy term of 15, 20, or 25 years with the PRUFlexi Cash Plan.

Furthermore, you are also able to select the frequency of your premium payments namely, monthly, quarterly, half-yearly, or yearly.

Premium Allocation

Since minimum premium amounts are net, meaning that fees and charges have already been considered and 100% of your premiums paid will be allocated to purchase the participating fund units.

As of 31st December 2019, the allocation of your premiums is as shown in the table below.

PRUFlexi cash asset allocation

Payout Options

Under the PRUFlexi Cash Policy, you have 3 payout options to choose from as follows.

  • Yearly Cash Benefit paid out to you starting from the end of your 2nd Policy Year; or
  • Deferred Yearly Cash Benefit (larger amounts) paid out to you after the end of your 10th Policy Year*; or
  • Reinvest your Yearly Cash Benefit back into your policy to be accrued daily at a non-guaranteed interest rate.

*For this payout option, you can choose to defer the Yearly Cash Benefit payout up to a year before the end of your policy term.

The table below shows the different percentages depending on when you choose to receive your Yearly Cash Benefit.

PRUFlexi cash yearly cash benefit

Maturity Benefits

Receive maturity benefits consisting of your last Yearly Cash Benefit plus any bonuses entitled to you in your last policy year.

The table below shows the different percentages you shall receive in your last Yearly Cash Benefit depending on when you have elected to start collecting this annual benefit and your selected policy term.

PRUFlexi cash maturity benefit

The Maturity Bonus you shall receive is non-guaranteed and are explained further in the Bonus Features section.

Flexibility

The following table displays the flexible features that you can choose from under your PRUFlexi Cash policy.

Flexible Feature Additional Description
Partial Surrender of your Reversionary Bonus
  • Choice of surrendering a portion of your Reversionary Bonus added to your plan, provided that your policy has a surrender value.
  • This would lessen the value of your plan in the long run.
Automatic Premium Loan, Policy Loan and Surgical & Nursing Loan
  • You will be charged a non-guaranteed loan interest rate for the automatic premium loan and policy loan.
  • Undertaking any of the loans would result in your long term policy value being reduced.
Option to buy another Endowment or Term policy without evidence of good health on selected life events
  • No medical examinations required for the new standard policy.
  • Person insured has to be younger than 50 years old.

Selected life events refers to:

  • Marrying; or
  • becoming a parent/delivering a baby; or
  • Adopting a kid legally
If the person insured is a child:

  • No medical examinations required for a new plan.
  • This is provided that he/she has been paying the standard term on the current policy; and
  • the child is under 25 years of age on the current policy’s maturity

Bonus features

The bonuses form the non-guaranteed portion of the benefits under your plan. Any illustrations below are under the assumption that PRUFlexi Cash’s participating fund yields a return rate of 4.75% per annum.

Reversionary Bonus

After your policy’s 2nd anniversary, Prudential may announce a Reversionary bonus to you annually.

As long as the company has declared it, this bonus will become a guaranteed benefit for you and be accumulated in your policy.

Here are the reversionary bonus amounts declared in previous years.

Year Reversionary Bonus per $1,000 Sum Assured Reversionary Bonus per $1,000 on accumulated Reversionary Bonus
2015, 2016, 2017, 2018, 2019. SGD15.00 SGD35.00

Please be aware that past performances do not predict nor guarantee future results.

Performance Bonus

The Performance Bonus is paid out to you once under any of the following situations.

  • When you surrender the policy; or
  • When you claim on a basic benefit of your policy; or
  • When your policy maturess.

As illustrated in the table below, the Performance Bonus amount to be paid out is expressed as a percentage of your accumulated Reversionary Bonus which changes according to your policy termination date.

The illustrated Performance Bonus rates as a percentage of the accumulated Reversionary Bonuses are as follows:

No. of completed years in force  Performance Bonus as a percentage of accumulated Reversionary Bonus (%)
1 0.0
2 0.0
3 39.0
4 42.0
5 45.0
6 48.0
7 51.0
8 54.0
9 58.0
10 62.0
11 66.5
12 70.5
13 74.5
14 78.5
15 82.5
16 85.0
17 88.5
18 92.5
19 97.0
20 104.0
21 107.5
22 111.0
23 114.5
24 118.0
25 120.5

Maturity Bonus

Likewise, the Maturity Bonus is a one time amount calculated as a percentage of your accumulated Reversionary Bonus, which might be paid out to you upon the maturity of your plan.

The table below displays an illustration of the different Maturity Bonus Rates depending on your chosen policy term.

The illustrated Maturity Bonus rates as a percentage of the accumulated Reversionary Bonuses are as follows:

Policy Term (Years) Maturity Bonus as a percentage of Accumulated Reversionary Bonus (%)
15 50.0
20 20.0
25 0.0

Past rate of return of the investment

The following table shows the net past return rate of the participating fund, whereby the expenses have already been subtracted.

PRUFlexi cash past rate of return

Protection

Death Benefit

Upon the death of the person insured, the full sum assured for death will be paid out. Any accumulated bonuses will also be paid out.

Naturally, any amounts owed to Prudential will first be deducted from your payout sum.

Within one year from policy commencement, the insured will not be eligible for the death benefit if he/she passes away from any pre-exisiting conditions or suicide.

Accelerated Terminal Illness Benefit

In the event that you suffer from a terminal illness (TI), you will be eligible to receive this Accelerated Terminal Illness Benefit provided that you are covered for it during the cover period.

Prudential defines TI as a sickness that would lead to the person assured to pass away within a year that has been diagnosed by a Registered Medical Practitioner.

Moreover, the Registered Medical Practitioner would have to be certified with a western medicine degree and be licensed by the relevant medical authority in Singapore to practice medicine. This would mean that you cannot head to a Traditional Chinese Medicine(TCM) for your TI diagnosis, no matter how much you believe in him/her.

Accelerated Disability Benefit

The Accelerated Disability Benefit is paid out to the person insured if he or she becomes completely and permanently diabled before the expiry of the coverage. Naturally, any amounts owed to Prudential will be deducted off first.

The table below shows the different Accelerated Disability Benefit amounts to be received at the point of becoming disabled, based on the insured person’s age on their last birthday.

Age (on last birthday) at date of Disability Payout Value
Below 1 years old
  • 20% of your assured sum;
  • After which the plan ceases.
1 to 64 years old
  • 100% of your assured value and proportionate bonuses that has been added to your policy (Maximum: S$2,000,000)
  • This amount is paid out after the Deferment Period
  • The *Deferment Period refers to 6 months after the total and permanent disability is ascertained by a Registered Medical Practitioner.
When 100% of your assured value and proportionate bonuses that has been added to your policy exceeds S$2,000,000, the remaining amount is paid out at the earliest of:

  • One year after the first lump sum payment; or
  • the policy maturing; or
  • the death of the insured.
*Exceptions to the Deferment Period:

  • Complete and permanent blindness in 1 or both eyes (Confirmed by an ophthalmologist); or
  • Severance of any 1 or 2 limbs (Not including the hands and feet).

Prudential shall stop making payouts at once, should you recover from your full and enduring disability before the end of your payment term.

After which you are still able to continue with the plan and be eligible for Death and TI Benefit, so long as you pay the necessary premiums. Your sum assured will now be equivalent to any amount exceeding the S$2,000,000, which was previously an outstanding payout.

Surrender/Ending the Policy

You may choose to end your policy on your own accord by fully surrendering your plan. If you decide to surrender your plan after paying premiums for 3 years, you shall be eligible to receive a Surrender Benefit.

Your Surrender Benefit will consist of your guaranteed surrender value and any non-guaranteed surrender value, such as a declared performance bonus.

However do take note that by surrendering your plan early, you shall be subjected to high fee amounts which greatly lowers your surrender value. Such high charges may result in your eventual surrender value being even lesser than the amount of premiums you have paid.

Coverage Add-ons (Riders)

Additional Riders (Optional) Description
Accident Assist
  • Receive a one lump sum additional payout; and
  • TCM costs incurred due to the accident will be paid out to you as well.
  • This is upon death or injury of the person insured due to an accident.
  • You are also able to add on a Recovery Aid Option to this Accident Assist Rider to get extra recovery assistance
Early Stage Crisis Waiver
  • No longer has to pay premiums for an established period of time.
  • The period for premium waiver shall be the shortest of:
    • 5 years (For Early Stage); or
    • 10 years (For Intermediate Stage); or
    • the remainder of your premium payment term.
  • After the premium waiver duration, you will have to continue paying premiums again as this benefit ceases.
  • This is upon the diagnosis of Early or Intermediate Stage Medical Conditions.
Crisis Waiver III
  • Suspends future premium payments of all the policy benefits covered on the diagnosis of any one of the 35 critical illnesses.
  • Premiums are suspended till the earlier of:
    • you turning 85 years old; or
    • your premium payment term ending.
Early Payer Security
  • Takes away the need for premium payments for a set period
  • The period for premium waiver shall be the shortest of:
    • 5 years (For Early Stage); or
    • 10 years (For Intermediate Stage); or
    • the remainder of your premium payment term.
  • After the premium waiver duration, you will have to continue paying premiums again as this benefit ceases.
  • This is on the medical diagnosis of early or intermediate stage medical conditions so that the people you care about will not lose their coverage.
Payer Security III / Payer Security Plus Helps to look after your loved one’s policy in the case where death, critical illness, or total and permanent disability happens to you.
  • Payer Security 3 removes the need to make your remaining premium payments until the earlier of your child turning 25 or completing the premium payment term.
  • Payer Security Plus (longer benefit term) suspends the remaining premiums of your family members’ policy until you turn 85, or the end of the premium payment term, whichever is preceding.
Crisis Cover III
  • Provides you with financial benefits if you are diagnosed with any one of the 36 critical illnesses.
  • Your diagnosis has to be provided by a Registered Medical Practitioner.

 

The following list shows the critical illness coverage under this rider:

PRUFlexi cash critical illnesses

  • You can only claim this benefit for one critical illness, except for Angioplasty and Other Invasive Treatment for Coronary Artery.

Benefit Amount

  • You shall receive 100% of your assured sum, as well as any bonuses (non-guaranteed) added to your policy for Critical Illness benefit.
  • Exception:
    • If you are determined to be suffering from Angioplasty and Other Invasive Treatment for Coronary Artery, you are only entitled to a payout amounting to 10% of your sum assured (Maximum of S$25,000).
    • Your remaining sum assured can be claimed if you should be diagnosed with another critical illness.

Fees and charges

You will be happy to note that there are essentially no fees and charges for the policy as the minimum premium amounts mentioned above are net, meaning that the fees and charges have already been taken into consideration.

How much will I receive upon maturity of the PRUFlexi Cash?

PRUFlexi cash illustration

The table above assumes the following:

  • Return rate of investment is 4.75% per annum.
  • Person Assured is a 25-year-old male who does not smoke.
  • Assured sum of S$120,000.
  • Yearly Cash Benefit chosen to be paid out from the 2nd policy year-end.

In the scenario where you don’t make any withdrawals and accumulate the full amount, pay S$12,568 yearly, and choose the 15-year term, you will receive a total potential payout sum of S$211,433 at age 40. As seen in the table above, you will be receiving a guaranteed Yearly Cash Benefit of S$6,000 starting from the end of your 2nd policy year.

Below are the calculations:

Total Premiums Paid:

S$12,568 x 15 years = S$188,520

Guaranteed Portion:

  • Policy Year 2-14:
    • S$6,000 x 13 years = S$78,000
  • Policy Year 15 (Maturity Benefits):
    • 55% x S$120,000 = S$66,000
    • Since the insured selected the 15-Year term and Yearly Cash Benefits from the end of his 2nd policy year, his maturity benefit is 55% of his sum assured as stated in the table from the Maturity Benefit Section.
  • Total Guaranteed amount: S$78,000 + S$66,000 = S$144,000

Non-Guaranteed Portion:

  • S$67,433

Total Received:

S$144,000 + S$67,433 = S$211,433

My Take on the PRUFlexi Cash

The PRUFlexi Cash is a popular endowment plan that many individuals seek. Personally, I’m not a big fan of endowment plans due to the long lock-in periods and low actual returns so my opinion might be pretty skewed.

However, I’ll do my best to be objective.

In my opinion, if you’re someone looking to force yourself to save money in the long-term or foresee a life event at the end of the maturity period, you can consider getting this.

The good thing is that this policy allows you to take a small portion of your savings after the end of your second policy year so that you can enjoy your efforts or for other needs.

Another positive note is that its par funds perform at an impressive 5.77% over the past 10 years.

Furthermore, the wide range of riders offered is more than what most competitors are offering. So if you purchased a rider on top of your basic policy, you’ll be able to waive premiums depending on your coverage.

A thing to note is that this policy does not have a breakeven point and that even in the 15th year, you will only receive $144,000 of guaranteed payout as compared to $188,520 premiums paid.

This is a huge dealbreaker for me as I prefer to have my premiums guaranteed and receive the non-guaranteed portion as a bonus.

The Manulife ReadyBuilder has a breakeven point at the 15 policy year and offers similar features at the PRUFlexi Cash – without the Yearly Cash Benefit.

However, this is purely my opinion and based on what I prefer for my own financial planning. What works for me might not work for you.

It’s always recommended to talk to a financial advisor so that you don’t make the wrong choice.

References

https://www.prudential.com.sg/-/media/prudential/pdf/ebrochures/pruflexicash_ebrochure.ashx

https://www.comparefirst.sg/wap/prodSummaryPdf/199002477Z/PRUflexicash_CI_WA_Summary.pdf

Disclaimer: Each article written obtained its information from reliable sources and should be purely used for informational purposes only. The information provided by Singapore Financial Planners and its affiliated parties is not meant to be construed as financial advice. Singapore Financial Planners shall not be held liable for any inaccuracies, mistakes, omissions, and losses incurred should you act upon any information listed on this website. We recommend readers to seek financial planning advice from qualified financial advisors. 

Other Useful Reads

Is your financial advisor recommending you this product?

Or are you interested to understand if this product is right for you?

Talk To A Financial Advisor in Our Network

Our strict selection process ensures that only the most unbiased financial advisors get to be part of it.

This means you get:

Fill up the form and you will be matched to the best financial advisor based on your needs.

Get Financial Advice Based On YOUR Needs

Our advisors can only provide you financial services if you are currently based in Singapore.

Is your financial advisor recommending you this product?

Or are you interested to understand if this product is right for you?

Talk To A Financial Advisor in Our Network

Our strict selection process ensures that only the most unbiased financial advisors get to be part of it.

This means you get:

Fill up the form and you will be matched to the best financial advisor based on your needs.

Get Financial Advice Based On YOUR Needs

Our advisors can only provide you financial services if you are currently based in Singapore.