Dear Mr. Tan
Presently I am paying $x a month premium for a coverage of $Y. I am thinking of terminating the policy but there is a penalty if i cash out now. What is your advice on this? Do I wait till the 6th year whereby there will be no penalty to terminate the policy?
You can ask the insurance company to tell you the following:
a. what is the cash value of the policy now?
b. what is the amount of penalty on terminating the policy now?
c. what is the total premiums paid up to now?
d. what is the future premiums payable in the future, until the end of the 5th year?
e. what are the charges deducted from the premium payable until the end of the 5th year?
f. what is the expected cash value at the end of the 5th year, assuming that the investments earn a gross return of 5% per annum
With the above information, it may be easier for you to make a proper decision.
Lesson: Get the relevant figures to make the correct the correct decision.
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