I will illustrate 2 scenario
You buy a insurance for 200k protection for example and you paid 1000/yr for it but you died 1 year later. Is this fair or unfair for the insurance company?

You buy a insurance 200k protection. 20 years down the road the term policy terminates and you are still alive. Is this fair or unfair to you? Most people would say yes because they would have paid for nothing but look at scenario 1. Would you still say it’s unfair if scenario 1 happens?

You are paying for the PROTECTION in the event anything happens and you still wish to make high returns off it if you pay for it for many years? These kind of things do not happen in real life. Many people say buy term and invest the rest in unit trust. It is not a sure proof way also because end of the day it’s the same thing,you need to depend on the market condition AND you need to do your homework in selecting the funds and do rebalancing else the end result would be low returns still or even negative returns.

The protection amount that you have if you buy insurance versus the amount you pay could be about 100x,you will need to pay 100 years premium before the sum assured is = to the money you have paid. Now they are taking on the RISK,if anything happens to you while you are insured they pay you the sum assured. If nothing happens,they make the money if it’s a 20 yrs term they make the money for 20 yrs if it’s 30 yrs term they make the 30 yrs money.

This is a fair deal to both the consumer and the company and if you do not agree with what i have said there is nothing i can do also. You have the right to think what you wish.

Insurance Advisers are just like a distributor for a company,we earn SOLELY by commission,there’s no basic pay. It is just like a shop that you go into and buy a shoe,they are just the distributor.

End of the day it is whether you need insurance or not and i can tell you 1 thing 90% of the people need insurance because we are not super rich. Insurance are MEANT for people not rich because you are using a small amount of money to protect a large sum in the event anything happens. It is NOT meant to be used to make BIG money.

I understand that many are disillusioned about financial planning but 1 thing is for certain,it is still a necessity for everyone that is something no one can denied.

Insurance is not meant to be profited from,so all those ILP or whole life they are not meant to be used as the ONLY retirement instrument you use but they are just 1 of the instrument.

The key to retirement planning is don’t put all your eggs in 1 basket. I do not sell whole life but i do still sell ILP because you can still be making money from it it’s just a form of DIVERSIFICATION. If you want big returns go for the US stocks or HSI stocks. If you have the time frame if you have the capital and you are not young go for pure term and do self investing,if you are young then go for ILP and you will still need to do self investing.

No one can deny that everyone of us have to invest or else if you just put your money in the bank it will be eroded by inflation. Never touch your CPF money because the returns for it is more or less guaranteed, why would you want to use a money that has a guaranteed return that is higher than inflation to take risk on? This is something i cannot understand.

End of the day,Adviser advises but you are the one making the decision. I will show my clients the pros and cons and they will decide,other advisers may choose to omit out some information but these are information that you can find out if you just ask around. You are dealing with LONG TERM commitment and on money would you decide on something without even doing some homework?

Food for thought for all of you

Several AIA policyholders have asked my advice. They are worried that AIA may be affected by the collapse of AIG. They asked if they should surrender their AIA policy now and receive the surrender value now.

My advice is:

> AIA has a separate policyholder’s fund covering its liability to its policyholders in Singapore.
> To my knowledge, this fund is solvent and is not affected by the problem faced by AIG
> There is no need to panic and surrender the AIA policies at this time
> Even if this fund is in trouble, there is a Policyholder’s Guarantee Fund managed by MAS that can take care of most of the liability (maybe 90% or more).
> It is better to wait for any official announcement from MAS

I hope that my comments are correct and can help to allay the fears of AIA policyholders

There are virtually no tax deduction for life insurnace in Singapoer. It does not make sense for consumers to buy life insurance for savings, especially as up to two years of premium is taken away for marketing expenses. In other countries, there is tax reduction to offset this upfront cost. But not in Singapore.

An honest insurance agent, acting in the best interest of the client, will recommend a low cost term insurance plan. But this does not give much commission to the agent. So, the agent (in order to surviev and prosper) has to sell high cost products and hide the poor value from the customer. It is a win-lose-lose situation (win for the dishonest agent, lose for the honest agent, lose for the customer)..

Let me say it once more.
Regular ILPs are known as variable whole life. They are designed to mimic
traditional whole life except that the investment component you have a say. For traditional WL you have no say. Your investment is thrown into the ‘pot’ of portfolio with the rest of other policyholders, fixed for everyone. Only one size and it is such to fit everyone’s goal, risk and time horizon.Is it a good idea? As you say everybody got different needs, right? But yours is lumped with the others who may have different needs from yours, right?
Mr. Concern, if all those information came from your agent, I am afraid you need to consider changing your agent because he or she is dishonest or incompetent.
Check my facts out with a trusted actuary too.

Life insurance products, including whole life and investment-linked products, can be designed to be good for consumers.

The problem is that these products are designed to pay high commission to the agent and give poor value to consumers. This high cost is not disclosed to the consumer.

Up to two years of the premium are taken away to pay the commission and marketing expenses. If the monthly premium is $300, the charges can be as much as $7,200.

This is a lot of money to be taken away from the unsuspecting policyholder, and is not told to the policyholder at the point of sale. This fact is hidden in the Benefit Illustration among 20 pages of confusing information.

If the charges are kept at a reasonable level, say a maximum of half year’s premium (which is still a lot of money) and this is clearly disclosed to the policyholder, then a whole life ,endowment or investment linked policy can be considered to be suitable.

Hi I think this statement is grossly incorrect for a WL plan. The ROG of cash value accumulation can never be negative. You might wish to seek an opinon from a qualified actuarist You statement is true for an ILP.

There are many comparisons between ILP, WL and BITR. However, the comparisons are difficult as each plan risk is different. BITR looks better but it goes as far as it looks on paper. Why the comparison is flawed?

1) The insurance term coverage is different for BITR(30 years or capped to certain number of years) with ILP and WL (Whole Life).

As such, the cost of insurance is different significantly. It makes comparison difficult unless the term insurance is similar to a whole life.

2) BITR may sound better, however if an individual does not invest or invest correctly to a “correct” fund, he might ends up badly or worse off.

3) Remember, you can blame the agent if your ILP investment isnt going as well, but BITR you cannot blame anyone but yourself. People with no financial background should seek help. An analogy: Its like climbing a mountain. You know as long as you climb up you probably will reach the top, but if you do it on your own, do you know the dangers of each mountain. Without a qualified guide or experience, it could be very dangerous to be use just internet videos, internet comments or other sources to climb the mountain. Are they reliable?

BITR and WL, ILP cater to different needs and one should understand the risks for each strategy.

Remember, insurance was a very good form of savings in the 90s but not in 00s, what will happen next in the future is anyone guess?

Should one use soley a BITR strategy? You will probably end up in a frying pan if
your execution of this strategy is not right/incomplete.

http://www.youtube.com/watch?v=nfI6-KrBE7E&feature=related

Could you clarify if the statement is true. As you know that the mortality charges increases with age is for ILP but not for WL. WL charges a fix rate across. The cash value should increase with age.