Someone who worked inside a large life insurance company operating in many Asian countries told me, "Mr. Tan, do you know how much profits a life insurance company makes in each of the various countries? It is a lot of money. So many tens or hundred of millions each year. This is why they can afford to pay so much upfront money to tie up with banks to sell their insurance policies, or to buy over other life insurance companies! ". He also told me that Singapore is one of the more profitable countries for the insurance company!
I am aware that the life insurance companies are very profitable, because they take away so much of the future savings of the policyholders - while the regulators are asleep.
Just imagine! If the accumulated savings for a policyholder is $500,000 and $200,000 is taken away from this policyholder, especially in an investment-linked policy (just look for the "effect of deduction" in the benefit illustration) and you will know how profitable the insurance company can be. If the insurance company sell 100,000 policies, the profit from these policies (including the portion shared with the agents) would amount to $2,000,000.00 over 25 or 35 years. Remember, the profits of the insurance company comes from the policyholders who became that much poorer by putting a blind trust in their brand name!
Learn about the benefit illustration here:
Participating policy
Invesment linked policy
If you want to learn a better way to safeguard your own financial feature, read my book on
financial planning. It could save you up to $200,000 over a lifetime!
Tan Kin Lian
