Some life insurers market a whole life or endowment policy with regular pay-backs every one, two or three years. They sell large numbers of these policies.
This type of plan give poor value to the customers. Here is the reason:
* the insurer charges the normal premium for the basic policy
* they add an additional premium for the regular payback
* the additional premium has to loaded to cover the commission and expenses
For example, if the regular pay-back is $3,000 every 3 years, the insurer has to add $1,000 plus $100 (to cover commisison and expenses). It does not make sense for the customer to pay an additional $1,100 a year to get $3,000 every 3 years.
This is not transparent to the customer. The customer is not aware that he is paying an incurring additional expenses for this benefit. He is worse off.
Somehow the insurance agent is able to make this plan look more attractive than its reality. This is the power of false marketing.
- ► 2017 (893)
- ► 2016 (828)
- ► 2015 (691)
- ► 2014 (144)
- ► 2013 (501)
- ► 2012 (1269)
- ► 2011 (1873)
- ► 2010 (2369)
- ► 2009 (1654)
- ► 2008 (2104)
04/15 - 04/22
- Change in occupation
- Feeder services
- Selling your life insurance policy
- Life insurance with regular paybacks
- Critical illness
- Decreasing term with living benefit
- How to invest in index funds
- Planning for a retirement income
- Feedback on Public Transport
- More trains needed during off-peak hours
- Term insurance in USA - risk factors
- Book early to enjoy lower hotel rates
- Term insurance rates in USA
- How to get low term insurance rates
- Common Sense Investing
- Call your insurer first
- Claim on several accident policies
- Write a Will
- Insurance payout are tax-free
- Advantages of taking a bus
- More insurers offer term insurance policies
- Where to find part time work?
- See the big picture
- Part time work for seniors
- Money market rates are softening
- Walk down Orchard Road at night
- Tribute To Our Pioneers and Unsung Heroes
- Expensive taxi ride
- Better to take public transport
- Time line planning
- Travel insurance for more than 90 days
- Continue with your existing policy
- Switch from Living Endowment?
- Save for your future needs
- Cactus flower in bloom
- Expensive taxi ride
- Travel Insurance
- Where to buy term insurance?
- Mortgage Protection Policy
- Cover for critical illness
- "All Risk" insurance of valuables
- Cactus in bloom
- Visit to the Turf Club
- Return from endowment policy
- Return from an annuity is more than 2% p.a.
- Is my savings adequate?
- Enjoy a higher interest rate with the money market...
- Present views of commuters
- ▼ 04/15 - 04/22 (48)
- ► 2006 (696)
- ► 2005 (159)