A policyholder send this Benefit Illustration to me. She was very angry that the independent financial adviser did not explain to her the charges under this plan.
She approached a private banker who explained to her why the plan was bad and the charges where high. He also explained the hidden risks under the plan, e.g. the insurance company could amend the charges at their will.
I studied the benefit illustration and found that, contrary to what the private banker had said, the plan was rather fair. I took the average of the projected benefit for 4% and 8% (i.e. 6%) and found the yield based on the surrender value at the end of 10 years to be 4.2%. The Effect of Deduction was an average of 14.2% of the accumulated premiums, based on the two projections.
Read more at
http://www.fisca.sg/ArticleDisplay.aspx?ID=447&Name=Friends-Provident-global-Wealth-Advance-saving-plan&View=A
She approached a private banker who explained to her why the plan was bad and the charges where high. He also explained the hidden risks under the plan, e.g. the insurance company could amend the charges at their will.
I studied the benefit illustration and found that, contrary to what the private banker had said, the plan was rather fair. I took the average of the projected benefit for 4% and 8% (i.e. 6%) and found the yield based on the surrender value at the end of 10 years to be 4.2%. The Effect of Deduction was an average of 14.2% of the accumulated premiums, based on the two projections.
Read more at
http://www.fisca.sg/ArticleDisplay.aspx?ID=447&Name=Friends-Provident-global-Wealth-Advance-saving-plan&View=A
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