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Endowment policy vs investing it yourself

Many bankers and insurance agents tried to sell me endowment policies.  I have never believed in this type of policy. It has got to be the worst payback vehicle ever, i think worse than Singapore savings bonds!  They sell it on the basis of fear, what if this you're dead, who will take care of your kids education, blablabla bullshit.

Lets put the numbers to the test, i think it's pretty straightforward.  Assuming i'm still around to send my kids to college after 18 years.  I've done 2 scenarios based on $200/month and $800/month contributions.

Endowment policy: Guaranteed payback at 2% p.a.  It's what they sell you.


Investing it with OCBC BCIP (i'll do a separate post on this): Target interest 4% p.a with dividends, and i still own the shares.


The difference between the 2 plans is astounding! With DIY investing (OCBC BCIP) I'm about $11k ahead based on the $200 scenario, $45k ahead based on the $800 scenario, and I still own the shares and will be paid dividends after the endowment policy timeframe lapses. You can argue that i can purchase shares with the endowment funds after the policy matures, but that defeats the point of dollar cost averaging and dividend investing.

Serious no-brainer, unless you lead a dangerous life living year to year.  Most white-collared workers who maintain a healthy lifestyle do not need to invest in endowment policies. 
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