2. The benefit illustration shows the following:
Annual Premium Cash Assume Opport
premium for 10 yr Value 4% p.a. Loss
Child 1 $1,252 $12,520 $12,192 $15,632 $3,440
Child 2 $1,598 $15,980 $15,573 $19,954 $4,387
3. Here is my advice:
If you pay premium for 10 years, the total premium is shown in (2). The cash value (both guaranteed and non-guaranteed) is shown in (3). It is lower than the total premiums that you have paid for 10 years. It does not make sense to put your money into these two policies, as you are sure to get a bad deal after 10 years.
If you invested the premium for 10 years to earn 4% per annum, you will get the figure shown in (4). The Opportuity Loss to you, by buying the Vivolife policy is shown in (5). This large cost goes to pay the insurance agent's commission and the company's profits. They are at the expense of the customer.
Conclusion: Do not buy these two policies, due to the poor return and opportunity cost. It is better to save for your children separately and give them the accumulated savings (say 20% more) at the end of 10 years. They can buy a low cost Term insurance when they start work.
Read this FAQ:
http://www.tankinlian.com/faq/savings.html
5 comments:
This policy looks like the Vivolife introduced by NTUC.
It looks like the new policies introduced by NTUC give poor value, similar to the policies sold by P.
It is a pity that the hard work put in by Tan KL to build the reputation of NTUC is now being undermined by the new CE.
All whole life , limited or not is a poor proposition. The question to ask is do you need a CI or insurance plan for your child other than a H&S plan. Why can't you start when the child is older and working. This is the time when a CI cover is justifiable.For now H&S is more than adequate.
I know agents like to tell you to buy in advance, or tell you the premium is cheaper when young. True the premium is lower but the cost is the same regardless of when you take up. The cost is mortality charge agents don't tell you. You can take 10 years ago your mortality charge is the same as the person who is of the same age as you who takes it now.
You should spend the money on yourself first. Do you have a CI that is 5 times your annual salary?
Do you have a coverage that takes care of your dependents when you are not around. This coverage includes your dependents' expenses and your spouse's retirement and your children's education funds and your liabilities like home mortgage, your debts etc. You need a big coverage. Your family and children will be better served if you take care of your this than trying to buy the unnecessary plans.First thing first.
Don't let the greedy agents bull or fool you or frighten you or exploit your love for your children. The agents are thinking of their pockets.
Vivolife is a very poor plan too in term of return. Also don't be fooled by those garbage frills, like retrenchment, 3 times accidental death or annuity options, they are included to distract you and to cover up the poor return. You may think,wow, a lot of stuffs. Don't be fooled. They are intended to BLIND you of the real issues, and ie, you have enough coverage.
i think near impossible to find a life policies with more than 4% guarantee per annum. People tend to find low cost Term insurance not that safe and require bigger sum. So what is the best approach to buy an insurance?
Looking only at the figures, it would seemed that Mr. Tan is correct. These plans look like real bad deals.
If I were the company, I would take these plans back and seriously examine whether they should be sold in the first place.
By the way, can anyone advise which type of investment outside would give me the 4% guaranteed and can take money out anytime after the 10 years? I also like to invest in this type of instrument.
There is none, 5.28am
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