Dear Mr. Tan,
I am 24 years and pay a premium of $2,500 for 10 years to be covered for $80,000 for death and critical illness for life. The cash value at 65 is $89,000. Is this a good deal?
REPLY
If you invest the 10 years of premium to earn 5.25% (which is the same rate used by the insurance company to project the bonus, you will get a total amount of $164,000 when you are 65. The cash value of $89,000 represents a reduction of 46% from the amount due to you. I consider a reduction of 46% to be too large and the policy gives you a poor return.
You don't have to cash your policy out at age 65. You can leave it in force until you die (hopefully at age 112!)
ReplyDeleteIf you leave the cash value for the rest of your life do you know that the cash value will shrink. Do you know you will be paying a time BOMB ? Next, why are you keeping it till 112? as legacy? There is no estate duty in Singapore.You must be very rich when the rest are struggling to have a 'silver or golden retirement'
ReplyDeleteYour children will be better off if you have an AMD on stand by lest you will be burden to your children and grandchildren.