Monday, March 03, 2008

Life policy taken by a parent

Hi Mr. Tan,
My mother bought a $30,000 life policy for me when I was young. The cash surrender value is about $2500. I have calculated that premiums paid throughout the years is about $7000.

I am really surprised at the low surrender value because when I referred to the projection value that came with the policy, the guaranteed value by now should have been around $5000. Why is that so? And do you think I should cancel?

REPLY
Ask the insurance company to quote you the following:
a) Cash value now
b) Cash value in 5 years time
c) Premium payable for next 5 years
d) Coverage for next 5 years

You can make a better decision, when these figures are available. Read this FAQ
http://www.tankinlian.com/faq/exist.html

Ask the company to explain the difference between the cash value now, and the projection that was made when the policy was taken. You can send the documents to me, after they gave you a reply.
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2 comments:

Anonymous said...

I can see from Mr. Tan's Poll that 95% of your visitors have been educated by this blog and there are still 5% conservative.
For whatever reasons we will surely benefit from them if they can share with us why they still don't choose the obvious.Maybe they have something that we do not know.

March 03, 2008 7:23 PM
Anonymous said...

So you can see the miserable return of whole life insurance. Not only that ,it was the wrong insurance your mother took up for you. It should have been a medical H&S. If saving was for your needs the wholelife was a very bad product to use.It should have been a regular saving and investing plan free of insurance.You didn't need a life insurance.Maybe you still don't.
But the insurance agent had another plan. He or she was planning for himself or herself.
I hope you are more discerning now, to be wary of insurance salesmen disguised as consultants or by another name. Remember the saying " A ROSE BY ANOTHER NAME IS STILL A ROSE"

Zhumeng:o)

March 03, 2008 10:55 PM

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