I took up a NTUC vivolife plan recently. I am paying 50 monthly for 10 years .I'm insured from death my entire life and total permanent disability plus critical illness till 65. How bad can that be when im only paying $5769 to insure my whole life?
REPLY
You pay premium amounting of $5,769 for 10 years and get a cash value at the end of 10 years of less than the total premiums. So you do not get any yield on your savings.
The amount of insurance is quite small. In your case, the policy is not attractive, but it is not bad either. But, if you are happy with this policy, it is all right.
If you buy a term insurance policy and invest the difference in a low cost fund, you can get a higher coverage and, quite likely, a higher yield at the end of 10 years.
5 comments:
Mr. Tan ,
you should stop wasting time on these dummies. They never learn and they are dummies alright. So much has been written about the rottenness of wholelife and limited payment wholelife and the other traditional par products yet there are people for whatever reason keep coming to you after they have bought.
I suggest one solution. 'Tape record' your reply by telling these dummies to refer to your book...page ? Anyway, this is their business.
NB:The agent who sold him this amount ought to be sued or reported to MAS. There is no REASONABLE BASIS.
That CONsumer kenna conned already. The agent just wanted to make a fast buck. I bet the sum assured not even enough to cover a 1-time hospital stay for serious injury or illness (which you have less than 10% chance of successfully claiming), don't even talk about whether adequate for family members.
Btw, if you're paying monthly premium, total cost over 10 yrs is $6000. $5769 is only if you're paying annual premium.
Any so-called manager or compliance officer in any insurance company will straightaway know that this policy was just a flippant sale, maybe to meet agent's monthly quota, or some family member / friend "helping" out the agent, or most probably a quick CON of customer.
Most agents also do not like to recommend 10-yr premium terms, coz the commission is really low. Less than 5 months worth of premium. Most of the time, 10-yr premium term is used to make a quick sale, play on hesitant customers who don't like to pay for long time, but they don't realise that the coverage is next to nothing.
Unfortunately 100% of sales managers and compliance officers will simply sign off on these kind of rubbish policies. A profit is still a profit.
With $50 monthly you might be able to get $250,000 coverage and this is likely the amount you need and NOT $10,000 that you get from this limited payment wholelife.
If I were you I would report the salesman agent to MAS. What kind of agent is he or her? This type of agents should be eliminated from the market. They are dangerous to consumers.
Did you know the commission they receive from the $10,000 is far more than selling you the $250,000 term insurance ?
If you want to know more, borrow this book from NLB by Jason Kelly -
"Financially stupid people are everywhere. Don't be one of them."
He recommended these:
Following the First Rule of Finance and managing the Three Cs takes up little time and guarantees financial success:
First Rule of Finance:
Spend no more than 80% of your take-home pay. (All expenses including home loans and insurances)
Credit cards:
Never carry a balance
Cars:
Don't finance. Pay cash for your vehicles.
Castles:
Put at least 20% down on your house, and keep the mortgage payment below 40% of your take-home pay.
This person who posted the comment just expressed that with $50 he can get a whole life coverage with only 10years commitment?
He didnt express interest in whether the yield is good or not or at the end of tenure of payments whether he can get back his principal why are you guys harping on returns and etc?
Why must you all said sue that agent? What if this customer expressed that the budget to set aside is just $50/month and the shortest possible tenure?
Can you guys recommend me what kind of term plan can offer 100k coverage at $50/mth at age 60 or 65?
Term insurance is clearly just a short term measures and not advisable for elderly customers why kept harping on the returns when people in 50-60 age group are much more conservative?
I seriously felt you guys are too narrow minded and self centered in all your comments. You can by all means by all term plans and invest the rest But I strongly believe it is not applicable for all age group and customers will limited knowledge to the market movements and risks!
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