Hi Mr Tan
I happen to visit your blog while gathering information about investment and insurance. It's a very informative blog. You have provided us a greater insight to insurance and investment.
I am now 26 years old. I met an an agent recently with the intention to buy a whole life and Term insurance. She recommended two plans. I found the premium to be rather high and there are a lot of uncertainties with respect to the critical illness coverage. (Other details deleted)
REPLY
I usually advise people to buy Term insurance and invest the difference. You can read the following FAQs:
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/choice.html
You should avoid whole life or endowment policies, as the charges are too high and the policies give a poor return.
Before investing, it is advisable to educate oneself on the basic principles of investment. Read books like "The Four Pillars of Investing", the "Little Book of Commonsense Investing", "A Random Walk Down Wall Street" etc.
ReplyDeleteThereafter, draw up an investment plan to determine your asset allocation (e.g. 70% equities; 30% bonds), before determining the actual stocks/unit trusts/bonds to buy.
Extensive studies have shown that investment returns is determined largely by asset allocation rather than stock/fund-picking and individual stock performance.
Save your money on whole life if you are thinking of saving. It is a poor protection and saving plan.The protection is low and the saving gives miserable return of about 3% or lesser over 20 years well below inflation. Is that putting your hard earned money to work?. No!! hardly!!You are young. You should be taking higher risk for higher return. Time is to your advantage; waste it you regret it.
ReplyDeleteAs a 26 year old, single, without dependent , first thing first you should have a medical H&S plan; then buy a term critical illness to cover 5 times your salary till 60 years old and not necessary for life. Don't let the insurance agents bull and cow you.
Start an investing plan. If you are unsure and not investment savvy, it is advisable to get an adviser at www.fpas.org.sg to assemble a portfolio according to your goals and other parameters.
Never engage a insurance salesman. He or she knows nuts about investing. They want to sell you funds only. So beware.