You seem inclined to believe your own speculation than what others are telling you. Getting 20% interest over 5 years is not hard. Without knowing anything about your plan I can only hazard a guess that the plan gives you a maturity benefit of 120% (guaranteed?) of the single premium in 5 years which is an annualised return of 3.7%. Doing a search online I found this http://www.hdb.gov.sg/fi10/fi10296p....5?OpenDocument. These are stat board bonds which are considered risk free, if the company invest in slightly more risky assets (AA bonds) it would get an even higher yield. Still the company needs to deduct it's expenses, commissions, profits from the yield of the assets, a net yield of 3.7% to the PH is a bit high so I'm guessing your plan is capital guaranteed but with non guranteed bonuses?
As to your question of whether the firm will lock in the full amount of assets on par, in short the answer is yes. Why? because it is required by legislation. You might think it is stupid but that is what MAS requires. The company is not holding 1 mil in cash but 1 mil in bonds that are expected to generate the cashflows needed to pay off the benefits 5 years later. Even the assets they hold are subjected to restrictions. The assets need to be a good match by term, nature and currency to the liabilities meaning you cannot use junk bonds or property or equity to back your liabilities that are guaranteed. Well actually you can but if you choose to mismatch your investments there are requirements for you to hold mismatching reserves. These are significant and generally the company will try to avoid mismatching as far as possible.
Everything I state are factual and not my own "feel" or speculation. I can't tell you how I know without divulging too much about mysef which I am not willing to do considering I don't get anything out of this.
Btw, agents don't know that much about the financial situation in a company, trust me. Don't get carried away and start blaming everyone.