Straits Times, 24 July 2012
Surrendering insurance policies not the only option
Surrendering insurance policies not the only option
WHILE insurance policies are aimed at helping consumers meet their long-term financial needs, individual circumstances may change and they may have to discontinue their policies.
Policyholders may believe that the only way forward is to surrender the policy and accept the cash value.
I surrendered one policy each with HSBC Insurance and Manulife this year because the customer service officers did not tell me about the other options, such as obtaining a loan via the policy, converting the policy to a paid-up policy, and selling to the resale market. It is important to stress the long-term benefits of policies, and that surrendering one should be the last resort.
Neo Chern Siang
On the contrary life insurance has NO long term benefit . It is an insurance to manage your current risks and NOT future risks.Because of this misconception perpetrated by insurance salesmen people are under insured.
ReplyDeleteBut if you are thinking long term funds from the cash value....please save it seperately, the return is very much higher.
If you need money you don't loan from the insurance cash value. Why should you if it is YOUR money? Why pay 8% interest rate for borrowing your own money?Ask yourself how much is rate the insurer paying you? if you have kept for 25 years the rate they pay maybe only 2%. But they charge you 8%. What crap daylight robbery.
Don't ever loan. If you really need the money from your policy SURRENDER is the best option but not before you replace your coverage. If you need to borrow, cancel your policy it means that you have not been properly advised by your greedy insurance agent.It means you don't have financial plan.
You can cancel your policy if you don't NEED it any more.
Sometimes there is no meaning to continue a policy, so either stop paying premiums or surrender the whole policy.
ReplyDeleteTake the living Policy, bought during TKL's days at NTUC Income.
Stopped paying premiums and freeze the Policy since last year, but could tap for any future claims.
Find the Policy stupid, only could claim on the verge of death, most probably benefitting the children only, and not the insured.
And with the reducing bonuses since the new CEO took over, it dun make any sense to continue paying premium yearly.
May even surrender the Policy soon.
"On the contrary life insurance has NO long term benefit . It is an insurance to manage your current risks and NOT future risks.Because of this misconception perpetrated by insurance salesmen people are under insured.
ReplyDeleteBut if you are thinking long term funds from the cash value....please save it seperately, the return is very much higher."
Strongly agree.
Pang