Tuesday, September 25, 2012

Skewed maturity benefit projections

Some life insurance companies have introduced new policies with skewed maturity benefit projections. They seem to give an attractive yield on maturity but the yield during most of the terms are poor. I find this type of projection to be unacceptable, as the life insurance company is not distributing the bonus in a fair manner. The bonus distribution is quite arbitrary. The danger of this type of projection is that the insurance company may reject the projected maturity payout on the grounds that they are only projections and the investment climate is bad. I advice consumers to avoid all types of life insurance policies with skewed maturity payout - i.e. if the bonus is quite low for most of the years but is bumped up towards maturity. See an example here:


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1 comment:

zhummmeng said...

This is the whole idea. The customers are held hostage .Remember the statement? Insurance is long committment. Early termination will incur losses for the customers. Customers are imprisoned for life and receive whatever the insurance company gives. Once signed it is take it or leave it..

September 25, 2012 8:11 PM

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