I visited the MAS CompareFirst website. It contained a lot of useful information, but I find it hard to understand how to use the information to make my decision. It looks like I still need to depend on the insurance agent to guide me. Is this the right approach?
REPLY
Yes, it is a right approach to ask the right kind of financial adviser to guide you. It is similar to a person who falls sick and need a doctor to advise them on the right medicine to take. But, you have to pay a fee to the financial adviser for his time, similar to paying a doctor. The financial adviser will then give you the right advice.
Yes, it is a right approach to ask the right kind of financial adviser to guide you. It is similar to a person who falls sick and need a doctor to advise them on the right medicine to take. But, you have to pay a fee to the financial adviser for his time, similar to paying a doctor. The financial adviser will then give you the right advice.
If you are married and the bread winner just buy term plan for the full amount, ie. $400k for death , TPD and Critical illness for 5 years renewable or 20 years renewable or till age 65 which ever premium you can afford and you still have left over money and you won't go wrong.
ReplyDeleteIf you are single start with $200K or even $400k like the above and you still won't go wrong, if you can afford the premium.
Invest your extra money to fund the yearly premium on a dollar cost averaging strategy, ie. invest regularly.
This strategy is much superior than the bundled whole life which is skewed towards the interest of the insurer.
THe benefits of buy term and invest the difference.
1. 2 separate accounts
2. bigger sum assured
3. higher return ( you decide the expected return to match your goal, time horizon and risk appitide)
4. no lock in for investment account
5. cash value from investment account can fund the yearly insurance premium
6. partial surrender of investment no interest charge ( you will be shocked to know there is one insurer that charges 8% to 'borrow' your own money if it is a whole life or endowment cash value. Worse than Ah Long, right?
Be smart and learn more by attending Mr. Tan's seminar.
But these insurance salesmen don't not behave like the doctors who usually prescribe the medicine ONLY after examining the patient. These salesmen peddle UPFRONT the products that benefit them most and leave the customers struggling paying the premium until the policy lapsed.
ReplyDeleteRemember the doctor who peddled coughing syrup with the drug ,codeine, and he made a lot of money from selling codeine? Insurance salesmen are like this doctor and they harm you financially.
Now there is one scientist with PhD in bio-science joining as insurance salesman to peddle insurance drugs. He is a doctor/scientist and yet he is giving up a career in this field for the gold cesspool in the insurance industry. Why? the reason is everyone walking on 2 legs is a cash cow and he can skin the cows in any way he likes so long he can make lots of money fast, right? The law is lax and the enforcement is too lax too.The regulator looks like beholden to the insurers and dares not to send the errant insurance agents behind bars like Australia or fine the insurers off their pants if they misbehave. Daily, on the street, in the malls, mrt the insurance predators are out in full force to pounce on the unwary victims. Our street are paved with insurance commission.
Commission should be banned IF POSSIBLE AND CHANGED TO FEES. I don't agree with MAS directive that the first year commission for insurance products should be capped at 55%. Commission should be spread EQUALLY OVER the 6 YEARS. Do you agree MAS is beholden to the insurers and always bending to accommodate them , as if fearing them? There is something amiss here.
ReplyDeleteI advise consumers to approach the financial advisers and pay a fee for their time. They will give proper advice to earn the fee. They will not be peddling bad insurance products to earn the "hidden commission".