This Untapped High Yield Savings Plan Is Better Than Treasury Bill, Bond & Fixed Deposit

Best High Yield Investment Opportunities In Nigeria

Best High Yield Investment Opportunities In Nigeria Only a Few Knows – Learn How To Find Most Profitable Untapped Long-Term Investment Ideas

When people talk about saving money for future projects or as a way to be liquid and not run out of cash in the next 5-50 years, the next place you see them go to is the bank. Why?  because they don’t know any better alternative savings opportunity that could practically earn more interest and provide streams on cash flow for long-term projects.

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Today, I decided to research better savings options one could explore as an alternative to banking products with attractive yearly interest return (after adjusting for inflation) higher than fixed income securities, then I remembered a friend who proposed an insurance savings plan that offers up to 43.3% return annually.

This sounds interesting! “I don’t believe this, you may exclaim” but it’s real. Such a return isn’t easy to come by, especially in a very high-risk environment like ours. Even when you adjust for the last reported inflation of 12%, you still have 22% positive interest to enjoy.

Where else can you find a risk-free opportunity like this? Treasury bills, bonds yield, even though they are risk-free too, are subject to economic risk. The yield on 1-year TB has fallen sharply, from a high of 22% in 2017, to a recent low of 12%. The downward trend is a result of FGN decision to lower exposure to the domestic debt since its more expensive to finance compared to foreign denominated debt.

I really don’t know whether to call this plan a savings or investments, but since you would be required to make a quarterly, semi-annual or annual contribution, let’s call it a savings plan. From the return above, it is clear that this insurance product earns more than any long-term fixed income security (including bond) you could ever think of right now, YES! it beats treasury certificates, bonds and fixed deposits.  Besides, long-term investors looking for a reliable low risk, stable and high return investment option devoid of risk should take this plan seriously.

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But, the problem now is that when you preach insurance to people, they feel you are reminding them of “death, accidents or unexpected events”. No, this isn’t one of them, this insurance policy known as a Flexible Endowment Plan is one of my best long-term savings portfolios right now.

Best High Yield Investment Opportunities In Nigeria Only a Few Knows

It is a low-risk high yield plan that combines protection and investment with the following benefits.

  • It provides for guaranteed payouts at regular intervals in three instalments.
    • 1st Payment of 25% of face amount at ¹⁄3 of the policy term (5th year)
    • 2nd Payment of 25% of face amount at ²⁄3 of the policy term (10th year)
    • 3rd Payment of 100% of face amount including the accrued reversionary bonus at full maturity (15th year)
  • Provides for full payment of the face amount in the event of the death of the policyholder during the period of insurance.
  • Provides for full tax rebate annually.
  • Provides for an annual reversionary bonus (interest) payable in addition to the face amount or earlier death at the rate of 4% or N40.00 per thousand.
  • Provides for cash values on the basic policy and the declared reversionary bonus.
  • Provides for a loan of up to 70% of cash value after three years of running the policy.
  • Provides for policy surrender after two years of payment and maintenance of policy.

Additional Riders

  • Waiver Of Premium –This benefit comes into force at a time when a policyholder is unable to perform his normal duties as a result of either accident or critical illness for a minimum duration of six months. Premiums that fall due within such period are waived and the policyholder will not be charged for it.
  • Permanent Total Disability–This covers the loss of body parts that make it impossible for the customer to continue to work as he used to. At this point, the policy is treated as being matured and full benefits are paid. Examples of such disability are the loss of both eyes, both hands and both legs (if a footballer).
  • Accidental Death, Dismemberment and Weekly Indemnity Rider –This covers loss of parts of the body following an accident as stated in the schedule of Indemnity attached to the policy document. The principal sum under this benefit rider is N2,000,000.00.
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Why is this low-risk, high return investment a preferred option for smart wealth protection strategy? It offers an attractive annual return estimate of 43.3%  on your investment without exposing you to economic, political or market risk.

Investment table:

The table below shows different insurance cover you can subscribe to, and their respective premium and payouts on maturity.

Investment Volume Annual interest Annual premium Semi-annual 1st partial maturity 2nd partial maturity Full maturity @ 15thyr Accrued interest/ bonus
#5,000,000 200,000 461,350 239,940 1,250,000 1,250,000 5,000,000 3,000,000
#10,000,000 400,000 922,100 479,530 2,500,000 2,500,000 10,000,000 6,000,000
#15,000,000 600,000 1,382,850 719,120 3,750,000 3,750,000 15,000,000 9,000,000
#20,000,000 800,000 1,843,600 958,710 5,000,000 5,000,000 20,000,000 12,000,000

How did I arrive at this double-digit growth interest return? Let’s say you subscribe to an annual investment cover of N5,000,000 (refer to the table above), you will be required to pay a premium of N461,350 annually or N39,000 monthly. On your annual N461,350, you will earn an annual bonus of N200,000 which should increase your portfolio value to N661,350 in Year 1, that’s like 43.3% interest return on a yearly basis.  At the end of 5 years, you would have access to 25% of the insurance cover of N5,000,000 which N1,250,000 credited to your bank account. This is like 54% of your cash savings of N2, 306,750 while the N200,000 bonus is already grown to N1,000,000 (in 5 years).

The N1, 250,000 payout is enough to finance a project or start another business that will generate another stream of income to your account. You can even plough back your cash payout into the insurance plan.

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Your second partial payment of N1,250,000 comes in subsequent 5 years, that’s like N27% of N3, 363,500 cash savings net of initial payout in the first 5 years. Your annual bonus of N200,000 would have grown significantly to N2,000,000.

At the end of the 15 years investment period, you would receive N8,000,000 (N5,000,000 insurance cover at maturity plus N3,000,000 accrued bonus for 15years (N200,000 x 15). This means you would have received a total of N10,500,000 (N2,500,000 for the first 2 payouts and N8,000,000 cash payout on maturity).

When you compare what you had saved, N416,350 x 15 years, N6,920, 250 to the payout of N10, 500,000, you would have enjoyed an additional interest of N3, 579, 750, which is 51.7% return on your long-term savings.

If you also looking for more of the best high yield investment opportunities in Nigeria that beat treasury bills bond and fixed depositsee my dividend income stock analysis.

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