I recently just graduated from university and have been approached by a friend to purchase an investment linked policy. I m in dire need of some advise. The policy goes like this:
- approximately about $450 premium each month with a coverage of 300k (100k for 30 critical illness and 200k for death)
- I can draw out the cash when it break-evens, estimated at 9 - 10 years. The promise of interest earned will be at 5 to 9%
- The funds chosen for investment are Singapore equities.
- There is a ongoing promotion that for every 1.8k premium i pay this year, I get $300 "free".
REPLY
Send the benefit illustration to me.
Read my book Practical Guide on Financial Planning and the FAQs in the website.
Be careful about buying something (especially a life insurance policy ) on a promotion, as it will usually color your judgement.
2 comments:
First, if you just graduated, single, no dependent you don't need death insurance. Get a H&S medical insurance using your CPF medisave.
If you need a critical illness buy SAFRA to cover till 65 year ONLY, coverage up to 5 times your expenses or salary.
That will leave you about $400. Invest it in a regular , low cost RSP plan, ie paying ONLY the spread or sales charge. If there is tiny advisory fee don't let it exceed 0.5% annually. Choose a fund or funds with management fee of 1% or lesser. Your investment should break even in few months depending on your fund performance.
One warning to you. Don't be conned into buying traditional wholelife, endowment and anticipated endowment disguised as cash backs.
There are a lot of limited payment endowment products in the market now, with paying terms from 2 years to 5 years. They are all scams. You get nowhere in your wealth accumulation.These products benefit the agent and the company.
When you have set up the RSP plan and the safra, you don't need any more insurance until there is a change in your circumstances like marriage or have a family.Don't fall for craps products that bundle
insurance with crap saving as safety net. You already got a big safety net in SAFRA.Focus on wealth accumulation.
There is a crap company which is no different from any other company using gift or vouchers to promote their rotten products. ONLY rotten products need promotion and inducement, right.Don't fall into the traps.You will be very sorry.
Also ONLY unethical and rotten insurance agents push rotten products.If you think they are putting your interest first you are a fool . These agents never but their own interest.
Don't beleive? have the products examined by FISCA for proof.
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