Need advice - Should I terminate my insurance policy?

[Bugsbunny]

 

[Genie47]

Safe = low returns

Risky = higher returns

 

Can't have both worlds. Only the investor will know what he/she can stomach.

 

In this time of high inflation, the risk averse will pay heavily.

[Dennisk]

Long term wise it's always better than banks return.

[Nhyone]

I have a PruSave policy that I'll be cancelling this year, after six years. Its cash value is around 50% of the total premium. The reason is simple: its coverage is too low for its premium and returns that isn't too spectacular over a 20 years time frame.

 

You can try asking the ex-CEO of NTUC: http://tankinlian.blogspot.com/. Now that he's retired, he advocates term insurance.

 

I am decoupling insurance and investment, as are more people these days. However, if you're not a disciplined saver/investor, it may be better for others to do it for you.

 

After term insurance runs out at 60 years old, your investments should have allowed you to self-insure. You can't be entirely making high risk/long term investments all the way up to 60 years old. That's asking for trouble.

Edited April 24, 2008 by nhyone

[Sfhuang]

Bro, you're writing off the 50% loss? I expect it will take quite a while to recover the difference, even if you're going to do it via investment gains.

[Celicapimp]

yup.. sorry.. i meant 65.. i.e. who's gonna cover me after 65? wat if my kids turn out to be scoundrels who squander away all my savings? rely on reverse mortgage ah?

 

I think very important for everyone to have a property under their name till old age.Don't be stupid to sell house give money to children.wait they drive you out u also LPPL.Write a will effective only after u die..hehe..

 

this happen to 1 of my friend.Sad family tragedy.

[Nighthawkcity]

I bought a life insurance policy a few years ago, thinking that it was a good means of saving and getting some protection. But I recently reviewed the policy, and to my horror, I found the computed return after 20 years would be a mere 1.1% increase from the total premiums I would have paid by then. This is a far cry from the projected 4.5% that the insurance agent told me at the point of purchase. I have only myself to blame for not being more financially savvy and being too easily sold to sales talk.

 

So which brings me to my question. I am considering terminating this policy, but I will suffer a penalty of about $7000. This is the difference between the total premiums I have paid to date and the cash value of the policy today. The breakeven point (where the penalty will be zero) is at the 18 year mark. I think this move will only make sense if I can somehow earn back the 7k + a decent % return over the 7k in the next 14-15 years. Do you guys think this is a good move?

 

Should I terminate the policy now and cut losses with the 7k loss? What do you guys think ... ?

 

Thanks.

 

you are paying for the insurance component.. treat ur returns as paying off $100k term insurance, would that feel better..

 

I am paying $300 pa for $100k coverage CI/Death. aga aga..

[Drive_carcar]

My wife's insurance even worst... something like yours, I caculated when it matures, we will actually make a loss!!!

 

Moral of the story is, those so called insurance policies (endowment plans etc), are a rip off. There is no such thing as an insurance company that exist for enriching their clients, such companies don't exist.

 

If you want just protection, just buy "pure" insurance. Like I'm covered for 200K with just $37 per month with life insurance. Yes, it's money down the drain, but its much cheaper, and I have a peace of mind. In fact I'm even planning to increase the covereage to maybe 600K.

[Drive_carcar]

But the insurance coverage is extremely low... maybe just enough to buy a coffin. Unless you got tonnes of cash, and pay $500 - $1,000 in premium per month. But generally, an endowment policy only gives like $10k - $50k policy for a reasonably affordable premium.

[Ngck]

bro, care to share where to get your term lobang?

 

so far the cheapest term should be safra term or NUTC term i think

[Sfhuang]

Thanks for your suggestions ....

[Header]

I bought a life insurance policy a few years ago, thinking that it was a good means of saving and getting some protection. But I recently reviewed the policy, and to my horror, I found the computed return after 20 years would be a mere 1.1% increase from the total premiums I would have paid by then. This is a far cry from the projected 4.5% that the insurance agent told me at the point of purchase. I have only myself to blame for not being more financially savvy and being too easily sold to sales talk.

 

So which brings me to my question. I am considering terminating this policy, but I will suffer a penalty of about $7000. This is the difference between the total premiums I have paid to date and the cash value of the policy today. The breakeven point (where the penalty will be zero) is at the 18 year mark. I think this move will only make sense if I can somehow earn back the 7k + a decent % return over the 7k in the next 14-15 years. Do you guys think this is a good move?

 

Should I terminate the policy now and cut losses with the 7k loss? What do you guys think ... ?

 

Thanks.

 

Like u, I am also thinking of terminating my GE whole life insurance. Recently I noted that they have slashed the non-guranateed cash value of my policy. The returns is low. But for my case, becos I have already paid so much, maybe I should not terminate. So still thinking...

 

U may be interested in this website:

http://www.tankinlian.com/faq/exist.html

Tan Kin Lian is ex-CEO of NTUC, so he knows what he is taliking. There is also an article on benchmark term insurance rates.

I have realised to keep insurance and investment seperate, and never mix them together.

As investment, those from insurance co really sucks . No transpranecy at all.

[Mustank]

 

couldnt agree anymore

[Apollo]

But the insurance coverage is extremely low... maybe just enough to buy a coffin. Unless you got tonnes of cash, and pay $500 - $1,000 in premium per month. But generally, an endowment policy only gives like $10k - $50k policy for a reasonably affordable premium.

 

enuff to cover coffin better then laden those family member who have to bear the cost.

 

dun believe ask Osama.. many of his family members died, he kean until pok kai... tat's why his name is

 

Osama Being Laden

 

lucky he didn't sell backside otherwise become

 

Osama Being Laid...

[Driven]

My 2 cents

 

First, ask yourself what was the main purpose of buying the policy. Protection, savings or investment.

 

Not to side the agent, if your priority back den was to provide protection for family and a given budget. Perhaps, the agent had done his/her best to meet your needs. Life insurance likely to be the one proposed. If your objective is protection, then the savings element is secondary. Honestly, you can make more money sense via others avenue, eg shares, property, unit trust, commodity...etc. Insurance is purely for protection tied along some savings element. Break even is only a bonus, considering you get protectin for family during the 20-30 years. Nothing happens, you get money back. Think it tat way may calm you down. Which instrument can deliver a huge some of money to our loves one in event of premature death with the premium paid. Shares, Ut....good money making tools but unable to do that delivery.

 

However, if your objective was to save, den agent likely to give you savings plan which the coverage may be small. Investment plan also an alternative.

 

Agent usually assess each individual client's priority,objective,needs,budget to design a plan. I suggest speak to your agent again and ask why did he/she proposed that plan and seek another advisor .

[Dc5r]

Bro not bad liao if can break even or get back a small "profit".

 

For car insurance is a 100% loss. And if you claim, they up your premium and take away your NCD.

 

Compare to auto insurance, your plan not bad liao.

 

The premium i am paying for my car can easily get me a 300K life policy. If i die, my family gets 300K. If i survive thru i get back 80 - 120% of premium i paid depending on market situation. For the same amout i pay to auto insurance, i only get pay out of market value of my car which will be less than 80k. If no accident, money gone... and premium not fixed...suka suka up premium...

 

Life, savings or term policy are all good for us depending on your needs...

 

Got big budget go for savings plan. No budget but need protection for family then buy term. If budget ok ok then buy life... either one will give you a peace of mind cos you know that your love one will be financially compensated should anything happen to you...

 

Btw market now have a new hybrid policy... Premium of Life policy, pay out of term and return of savings...

[Leepee]

I think insurance are like pyramid schemes.

As long as more people sign up, the computed returns will be high.

 

I don't think the world population is going to boom like what it did after the 2 world wars. Nor will the world economy going to keep increasing non-stop like it did in the 80,90s.

 

I think therefore computed returns will never repeat the last 20 years high figure anymore.

[Genie47]

Speaking of motor insurance. The amount of premium you pay for life assurance is less than what is for a 50-80k odd car. Your life worth more than that and the car needs more premium! Nabeh!