Thursday, February 21, 2008

Selecting a policy to terminate

Dear Mr. Tan Kin Lian

1) I have bought three critical illness policies at different times, more than 10 years ago. Now I wish to cancel one of the policies. Can you tell me which should I surrender – the one I bought the earliest or the latest?

2) How much of sum insured for critical illness is considered sufficient for me?

REPLY

I suggest that you ask the insurance company to quote the following to you, for each policy.

a) What is the cash value now
b) What is the estimated cash value in 5 years time
c) What is the premium payable for the next 5 years.

You will be able to make a better decision, after the above figures are available. You can read this FAQ to decide on the amount of insurance that you should have.
http://www.tankinlian.com/faq/choice.html
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2 comments:

Anonymous said...

Sometimes I wonder why people take risk of not addressing their current risk at one go.I cannot understand why most people have a number of the same policy but taken at different time.Is it because they were taken up at different time to address the change in their financial circumstances or is it the insurance agent's idea or "advice " to stagger the purchases? What if the client contracted a disease immediately after the purchase of the first policy? Don't you think that would be devastating without enough coverage? If one's needs can be staggered that means one is able to foresee the future. Then in this case it would have been better for the client to postpone until it is needed. This would have saved a lot of premium for him.
I suspect the insurance agents plan
the staggering for their own interest so that he or she could sell the client a whole life again to make more commission.Whole life plan is always the cause of inadequate coverage.
Insurance agents are cunning and scheming. They would advise staggering the purchase for thier own reason or they would tell you to cover to preempt a future event which may or may not take place.
Whatever, it is the commission that is behind all that.
It is better to engage an honest and competent adviser who is for you and not for himself or herself.
The next time if you are looking for an adviser you may want to consult this association ,www.fpas.org.sg , for help.

February 21, 2008 11:32 PM
Khiat Han Hwee Adrian said...

Many people buy the insurance according to their current budget.

The agent should have recommended a Term insurance to address his coverage needs. A term insurance in the first instance should have complete the equation.

It is not right recommending 3 whole life Policies at different stages of his life. It is against the best interest of the client.

February 22, 2008 11:05 AM

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