Tuesday, October 25, 2016

Continue an existing life insurance policy?

A consumer should avoid locking up long term savings in a life insurance policy that gives a poor return. They should look for a return of at least 4% p.a. on a long term investment. The benefit illustration for most policies taken today shows a return of less than 3% if the policy is kept to maturity. It is usually negative when the policy is terminated during the first 10 years.

If you are already stuck in a life insurance policy that has been giving a poor return in the past, it may still be worth keeping the policy until maturity. Why? The "going forward" yield may be more than 4%.

Read a real case study here:

No comments:

Blog Archive