Tuesday, March 18, 2008

Life assurance policies give poor return

Dear Mr. Tan
I have the following life insurance policies:

Plan: Life Plus
Sum Assured $100,000
Yearly premium $1,282
Insured for last 10 years
Cash value now: $10,300

Plan: Dynamic Prolife
Sum Assured: $50,000
Yearly Premium 1,519
Insured for last 10 years
Cash value now: $12,000

Should I keep the insurance or should I switch to low cost fund and term insurance? Based on my calculation, if I keep the cash value and subsequent premium in low cost fund, I can get a better return. If I keep the policies, I will have to wait for another 6 to 9 years for my cash value to breakeven. Pls advise.

REPLY

Please read this FAQ:
http://www.tankinlian.com/faq/existinglife.html

I hope that you find it useful for your decision.
Posted by at

2 comments:

Anonymous said...

I advise against using whole life or endowment as saving vehicles. The problem is the 2 elements are inter locked and sometimes you are torned between protection and saving. You get more out of your plans if you separate them.
Secondly the return of whole life and endowment is poor and the protection is low.
Agents talk of discipline that whole life gives. This is bull. Nothing can hold your discipline if you have no idea what you bought. How many whole life lapse after a few years?
On the other hand if you have a purpose you die die will see it through fruition.... So don't let these agents con you into buying whole life or endowment. They cook up this reason to make you buy.
Another favourite with insurance salesmen is that term will expire. This is exactly what you want and what you plan, to expire when you don't need it anymore.It is also cheap to terminate it.
You can see that the plans you have are not efficient and also not effective in addressing your needs.
Of course the worse whole life plans are those limited premium payment term living products.They are the least efficeint and effective.

March 18, 2008 5:55 PM
Anonymous said...

All whole life and endowment, from which ever companies, are poor products in term of protection and saving.The difference between these companies is marginal.
As a result some companies are disguising them as something else. Instead of improving, the result is worser. Customers should not be fooled by the outward appearance. They should look deeper into it. If you can't analyse, get an expert to help.
In the recent years a lot of these bad products are luanched. Products like revosave, prucash, smartsaver, to name a few, are introduced. Another range like limited payment premium term products. Some think they are LPPL, but they are worse. Somehow to push them, the companies use high commission to motivate the insurance salesmen to work hard, that unethical and unscrupulous means are used by the greedy agents. In fact it is no different from daylight robbery.
You can see from the posting that the 2 product are lousy.You can say they are representative of the product universe.
It is time consumers change their mindset. All these years consumers have been taken for a ride by the companies and their agents.It has been the greatest conspiracy in history that consumers have been fooled without them even knowing it.

March 18, 2008 8:16 PM

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