I often get question from the public asking my views on the life insurance policy that is being sold to them, or for my views on whether they should continue their existing life policy. My answer is - attend my talk on life insurance. The next talk is organised for 8 Oct. You can register here.
You may be spending a lot of money on your life insurance policies - say 10% of your income or more. Surely, you want to know if you are getting a decent return on your savings, or being taken for a ride? Attend the talk and learn how to make the right decision.
This is most important for young people. so get your children to attend before their friend sell them a policy that gives a poor yield. If you remain ignorant, you will be wasting a large chunk of your money! Education is power!
You may be spending a lot of money on your life insurance policies - say 10% of your income or more. Surely, you want to know if you are getting a decent return on your savings, or being taken for a ride? Attend the talk and learn how to make the right decision.
This is most important for young people. so get your children to attend before their friend sell them a policy that gives a poor yield. If you remain ignorant, you will be wasting a large chunk of your money! Education is power!
My view is life insurance should break even from the 10th years and return at least 3% from the 15th onward and 4% by the 20th year.
ReplyDeleteTo make it possible cost must be reduced, expense ratio lowered by the cutting the agents' commission and other operating expenses.
Eg.agents' commission should be 20% 1st year and 5% for next 2 years.
Of course , no load insurance is better and to be remunerated by fees which can be even lower than the commission.
Insurance agents should NOT be paid for products sold but for advice.
In the old days, the breakeven point from most policies from NTUC Income was 7 years or shorter. This was due to low upfront cost. The policyholders were happy to accept this breakeven point. Note: the breakeven point is reached when the cash value is the same as the total premiums paid, i.e. it has gained sufficiently to offset the cost of insurance and the initial and regular expenses. The breakeven point for most policies today is more than 10 years.
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ReplyDeleteThe break even point now is about 20 years average for all the insurance companies. What rubbish saving plans are they?
ReplyDeleteDear Mr Tan
ReplyDeleteI have a lot of faith in you as CEO of NTUC. So much so that rightly or wrongly, 10 years ago I single out your single payment Growth Policy as the main source of my retirement fund. Low cost and reasonable return. Bought more than 20 of them over a period of about 5 years for both me and my wife.
I am not working now and over the next 10 years seeing the policies maturing on a yearly basis. Next month my 11 year policy of $35K maturing for a value of about $57K. Decent return for stress free investment.
Thank you for pushing such policies during your term as CEO. I did some comparision and yours was the most attractive for many reasons.(not from your salesman but my own due diligent checks with other ins. companies.
When Mr. Tan Kin Lian was the CEO of ntuc the BIs of all the products have a page that showed the yearly returns. Buyers could judge from the disclosure whether the products were good or not good for them. But now it is blackout, missing. Why? is it because the returns are lousy that ntuc is so shy to disclose? But it has been always advertising the past returns of Mr.TanKL. Is it trying to mislead the public that the past is indicative of the future? Where is the transparency and honesty is the best policy?
ReplyDeleteOr is it purposely left to let the salesmen to bull the buyers?
Consumers should be careful of this marketing trick.
Yeh, I notice that the current BIs of ntuc products don't have the yearly returns. My old policies have it.Why don't they show? is it to save paper or to embarrassing to show the returns of their products? Talk about people before profit; honesty is the best policy; best kept secrets; and all the craps, why no show of the yearly returns?
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