Wednesday, November 29, 2006

Re-invest into the Combined Fund

Dear Mr Tan

I bought this policy from Co X in year 2000 through an Insurance broker.

a) Enhanced living assurance, S$1924 per year
b) Premium payable for 52 years from age 33
c) Sum assured: $100,000 with annual reversionary bonus of $10/$1000 sum assured plus 1% of accumulated bonus.
d) From the sale quotation, at age 65 total premium paid-up S$61,568, surrender value : guaranteed 57400 non guaranteed S$33,190
e) Current policy status: total premium S$11,544, surrender value : guaranteed S$8,000 non guaranteed S$2,251

I have seriously considered surrendering this policy and go into term policy. What is your advice.



Dear PL

If you surrender the current policy and invest the cash value in our Ideal Combined Fund, you are likely to get the following:

a) Single premium: $10,251
b) Regular premium of $1,924 per year, $250 is used for decreasing term assurance, $1,674 is invested in the Combined Fund

Projected benefit at age 65 (not guaranteed)

- $125,900 based on return of 5% a year
- $181,600 based on return of 7% a year

The accumulated savings at age 65 is higher than that projected value ($90,000) under your current policy at age 65.

Tan Kin Lian

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