When an agent sells a life insurance policy to you, the agent has to give you a benefit illustration and explain the contents to you. The benefit illustration contains a lot of information but you must look for two important items that are hidden in that jungle, i.e. the distribution cost and the effect of deduction. The agent is likely to skip these figures, so you have to ask the agent to identify them and show them to you.
You need to know how to interpret these figures. They are explained in my FAQ on "benefit illustration" available in www.tankinlian.com/ask.aspx. Be sure to pay attention to these two indicators and know what is acceptable and what is not. Most life insurance policies do not pass the benchmark, i.e. they give a poor yield to the policyholder.
You can also read my book, Practical Guide on Financial Planning, to learn about how to invest your savings to get a good yield and avoid excessive risk.
Be educated. And save more than $100,000 on the "effect of dedution" taken from your savings!
Tan Kin Lian
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