I follow your blog quite regularly. I came across an article addressing whole life or term -- which I know you have addressed many a times on your blog.
http://www.lioninvestor.com/
I am wondering if you find this appropriate to share on your blog? It offers a differing perspective.
My view
The article is probably written by an insurance agent. They make a living by selling whole life insurance with a high commission paid upfront to them. They will make these type of arguments to hide the true facts and mislead the public.
A whole life policy is all right, if this priced fairly to the consumer, i.e. no upfront commission and a fair profit margin to the insurance company (but this has to be tightly regulated). Furthermore, the cash value has to be tightly regulated, similar to the asset share method adopted in Malaysia.
However, our regulatory environment does not protect the consumer for these abuses. So, it is best to avoid the whole life policy.
That guy, Shanne is an agent. What do you expect him to say?He has to defend his rice bowl at the expense of his customers by this argument.
ReplyDeleteVivolife is by ntuc. If you are buying for protection you are paying too much.
On one hand he said people buy vivolife for protection for life . On the other hand he said people don't have discipline to invest the rest. It is all his argument just like the spear and shield conmen.(the spear can pierce anything; the shield can stop anything.)
How many people keep their wholelife policy? Before they reach 60 years old there bound to be financial crises and all you need is one crisis and your policy is gone because people go for thier policy first whenever they need money, right? Wholelife,limited payment WL, vivolife whatever crap they will be finished when you make a loan.Also by 60 the dishonest insurer or the agent will be pestering you to convert to annuity. It means one more sale and commission to the agent and avoidance for the insurer to pay claim in the future which can be a lot more.You see the dishonesty and insincerity of these people. When the agent asked you to buy he or she told you some falsehoods to frighten you about death in old age and when you are old they try to sell you the annuity for retirement. Now which is which is correct?
Come on, you need a good medical insurance at old age and PLENTY of money. The vivolife can't provide for your living expenses instead it is depleting your cash value. Did you know the mortality cost is a bomb at old age?Did you know the mortality cost is as high as 5 times the premium you paid? Althouugh you are not paying the premium your policy is paying the mortality cost.Did your agent tell you? Did the BI state this? It is a 'black dark" business, no transparency and the consumers are suckers to fall into those traps set up by the company in collusion with this agent as the trafficker.
Anyway, don't end up in dilemma after 20 years as many are experiencing now.
This whole life limited payment vivolife is meant for the rich to humor the pretty agents, to splurge on the beggars , the loss is nothing to them but unfortunately they don't need it . If they need they buy huge term coverage. This makes sense. Only ordinary folks always got conned. They need help to stretch the dollar and yet they got short changed and conned by their very good agent friend.Commission is the root of the evil in this trade.
Kudos to Mr Tan for belabouring this important message. Now even so-called IFAs are feeling the heat, as more & more consumers upfront say they don't want to consider any par insurance policy at all (i.e. wholelife and endowment). These IFAs many years ago used to be very publicly pro-term and encourage consumers not to go for par insurance. Now they change their tone, and keep saying everybody's needs are different, that par insurance fulfils certain needs, have to do individual financial analysis etc etc. I feel that this is just excuses to actually pad their advice with par plans.
ReplyDeleteI have personally tested 3 so-called IFAs, and their proposal always include at least 1 wholelife or 1 endowment, combined with other term and medical insurance. Most of these IFAs business model is only for those consumers earning more than $8000 a month. So that even after paying for $100K-$200K wholelife, still got plenty of cash to buy other more important term insurance that will cover them $500K-$1 million.
But for majority of Singaporeans, after you buy a miserable $100K wholelife, you won't have the luxury of extra cash to bother with ensuring REAL adequate coverage. Do you really think $100K is enuf for your family and dependants? And as many have already stressed, in times of financial need, this expensive par insurances will be the first to be surrendered. You will be more concerned with paying mortgage, feeding your kids than to pay hundreds of $$$$ a month to insurance companies. Compare with a low-cost term plan where you only need to pay $20-$30 a month, and you can still afford.
At the most by 65 yr old, 99.9% of consumers will have already surrendered their wholelife --- so what lifetime coverage? And for majority of Singaporeans, if most of your monthly spare cash is "saved" into par insurance, I can guarantee that when you are old & unemployable, you won't have enuf money for comfortable retirement. Even if you surrender all your wholelife plans, you will definitely need to DOWNGRADE your lifestyle, from your flat to your food & transport, to reducing the number of hours you watch TV or use the computer to reduce electricity bill.