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Pink Guide: Essentials for LGBT planning to get their first house

System in Singapore:

Let’s start this article by first understanding how we can purchase a house in Singapore. As most of us know, our central provident fund (CPF), which is a mandatory contribution by the employees and employers, have three accounts.

So how can you proceed to buy a house?

Ø With your spouse

This is for married couples. The minimum age to buy a resale HDB flat is 21. You can combine your OA with your spouse to pay for the mortgage if you are afraid that your individual OA will not be enough.

Ø Alone

This is for the singles. The minimum age to buy a resale HDB flat is 35. However, you can only use your own OA to pay for the mortgage.

Worry of a LGBT

Problems will arise if you are a LGBT and can only buy a flat at age 35 but is afraid that your OA is insufficient to pay for the mortgage.

Your significant other’s OA cannot be used to pay for the mortgage together. Therefore, you will have to pay for the mortgage from your own savings. At age 35, you may not enough savings to pay for your housing and enjoy a proper standard of living.

Solution!

But fret not! Because in this article, we will introduce to you a solution to solve this worry of yours of having not enough money to buy a house! The solution is for you to increase your savings starting from now! But how can we do so?

But what is an endowment plan?

Some people may see endowment plan as a way to force you to save money, some may see it as an investment as you will be getting more money that what you put in, while some may just see it as a insurance plan.

Pros and cons of endowment plan:

We can first look at some of the pros and cons of an endowment!

Pros:

Guaranteed returns

As long as you pay for the premiums you are required to pay until the policy ends, you will be paid a lump sum of money which is guaranteed and written on your policy at the start when you buy the endowment plan.

Non-guaranteed returns

Non-guaranteed returns refer to the additional sum of money you can get when your policy ends. As compared to savings accounts and the fixed deposits, endowment plans can give you a higher non-guaranteed return so you can get a higher lump sum of money at the end.

Some insurance coverage

Most of the endowment plan have an element of insurance coverage in the policy against death, terminal disease or permanent disability before your policy ends.

Cons:

Guaranteed return does not equal to the guaranteed principal

One must take note that, you must not assume that all the premiums you are paid for are guaranteed and you will receive all (and some additional money) back when the policy ends. If death occurs while policy have not ended, the payout given will be lower as there is a significant insurance coverage.

Long commitment period

Most of the endowment plans tend to have a period of 10 to 20 years and you must hold on to the policy and pay the regular premiums until the end of the policy. However, this is not an issue because you are only eligible to buy a house around 10-20 years at the age of 35.

Which endowment plan should I buy?

Let’s now make a comparison of some of the endowment plans available from the different insurance companies!

So…

Which endowment plan you should get depends on your personal needs. You should always get the plan that best suits you.

So, what are you waiting for? Hurry and get an endowment plan so you will be able to buy a house of yours when time comes!

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