Savings Insurance vs ETF
Whether you're deciding to buy or deciding to surrender, the core question is identical: does this capital grow faster inside a savings-insurance policy, or in a low-cost ETF? This tool pushes both paths to the same horizon, computes the breakeven ETF return, and shows sensitivity across 5/7/9%.
A surrender decision isn't just math
- Guaranteed payouts and death benefits disappear once you surrender
- FX risk: USD policies re-deployed into TWD assets take the exchange-rate hit
- Tax: ETF dividends may be taxed; most policy maturity payouts aren't
- Liquidity: ETFs sell anytime; insurance requires surrender (with penalty) or maturity
Want to compute your policy's actual annualized return first? Try theSavings Insurance IRR Calculator.
Frequently asked
- I've already paid premiums for 3 years — should I surrender now?
- Treat the premiums you've already paid as sunk cost and compare only the two forward paths: keep paying to maturity, vs surrender now and put the surrender value into ETFs. The tool uses the current surrender value as the ETF starting principal and computes the breakeven ETF return. If the breakeven is above 7-8%, surrender is rarely worth it; below that, ETFs likely win.
- Why is the breakeven ETF return so low?
- Because the true IRR of most savings insurance policies sits between 1.5% and 2.5%. A broad-market ETF (S&P 500, VTI, VOO) has historically returned 7-9% annualized, so even 3-4% from ETFs beats the policy. The lower the breakeven, the easier it is for ETFs to win.
- Doesn't a 2.5% declared rate equal a 2.5% IRR?
- No. The declared rate only applies to the portion that actually enters the policy account. Front-end loads (20-60% of first-year premium) are deducted before any money is invested, and there are surrender penalties. Once those are added to the cashflow, the realized IRR is almost always lower — typically 0.5-1.2% lower than the declared rate.
- How do I compare a USD-denominated policy?
- Compare in the same currency to avoid mixing FX volatility into the return gap (e.g., USD policy vs US-listed ETFs). If you plan to redeploy into TWD assets after surrender, deduct an FX-loss estimate on top.
- What do the 5/7/9% sensitivity rows represent?
- Conservative, baseline, and optimistic long-run ETF assumptions. Historically the S&P 500 (with reinvested dividends) has returned 9-10% nominal, ~6-7% after inflation. Use the band to gauge how robust your decision is to different market regimes.
- Does this tool store any of my inputs?
- No. All calculations run in your browser. Nothing is sent to a server or persisted.