Hi Mr. Tan,
I am thinking of purchasing a whole life plan, but my insurance advisor has advised me to go with an endownment plan. Can you advise me?
L
REPLY
My advice is contained in these FAQs:
http://www.tankinlian.com/faq/choice.html
http://www.tankinlian.com/faq/savings.html
I prefer to avoid whole life or endowment plans, as they give a poor return to policyholders.
Agree with Mr Tan that it is better to avoid endowment plan. As for whole-life plan, consider comparing across 3 or more whole-life insurance plans from different companies, you will be surprised at what you might find, like I did recently.
ReplyDeleteAs for "buy term invest the rest" (BTITR), it depends on what your monthly budget is; if it's only $100 per month, then it is not really possible to do, 'cause a regular savings plan (RSP) for unit trusts starts from $100/mth. A typical term insurance (D/TPD/DD) cost at least $60-$70/mth (depending on age). By enlarge, BTITR saves on cost and provides much better returns in the long run.
Reference: http://www.waynekoh.com/2008/07/btitr.html
In my many postings, i gave many reasons why whole life and endowment are dumb and stupid products yet you find people coming up to this blog to ask about whole life and endowment.
ReplyDeleteWhat a disappointment for you, Mr. Tan, despite your relentless effort to educate the readers.
You see, people think they know about insurance.Come on , it is not as easy as you think. Even the insurance agents who have training and years of experience, many still do not know from one end to other about the insurance they sell. What makes you think that you know?
You see your agent trying to recommend you endowment but you want whole life. Is it because you have been preconditioned about wholelife? Is it your friends , your brothers and sisters and your neigbours have it? So you must have it and you are wondering whether endowment is correct. The agent must have reasons to recommend this endowemnt after EXAMINING YOUR FINANCIAL needs, if he has done it?
Anyway, heed Mr. Tan's advice and go for term and invest the rest approach. I assure you get the right insurance and the right amount and you also get the maximum return. You will have peace of mind. If you go for WL and endowment you will always have MONEY NO ENOUGH AND PROTECTION NO ENOUGH and you have pieces of mind (worries)instead of peace of mind.
Don't buy from insurance agents. They are product salesmen and pushers. They are NOT qualified.
hello. i hv learnt to avoid whole life/endownment and go for term. this is easy. but comes to investing the rest of $$, I did badly. I need recommendation of good financial planner/adviser on investing my $$. I dont think i can do it myself. lack of knowledge and no time to beef up. because of the past boo-boo, instead of making gains, i'm losing. so, any good recommendation pls
ReplyDeleteBetter invest for the long term; use dollar-cost averaging or some call it "drip in money".
ReplyDeleteSee my article/charts on "drip in money".
http://www.waynekoh.com/2008/03/drip-in-new-money-part-2.html