Well, talk about Benefit Illustration, insurance agent usually shows 2 column of return at different rate. There are usually 3.75% vs. 5.25% for traditional whole life policy, or 5% vs. 9% for investment-link life policy. According to MAS (Monetary Authority of Singapore), there must be 2 return rates with at least 1.5% differ to each other to let consumer see a wider pictures of return rate.
Unfortunately, insurance agent will usually keep the word "Non-guaranteed".
Theoretically, "Non-guaranteed" return rate means the return could be 0%, 1%, 2%, 5% or 10%. Nobody knows what will happen at the future (and the fund manager could not guarantee it).. So it's best to keep your expectation by looking at the lower return rate.
Let's take a look at the generated sample from X company, for a client paying $1200 per annum.
If the selected fund performs at 2.5% return over the 40 years, the client will only get ~$20k after paying $48k. Means the client might has 'burned' $28k for the 40 years insurance fees.
But the damage could up to $300k. If you invested your premium at a fund performs at 9% return over the 40 years, at the end you might get $300k. So, instead of looking at the Non-guaranteed Cash Value return figure, it's very important to take a look on the effect of reduction. tb continued.
Unfortunately, insurance agent will usually keep the word "Non-guaranteed".
Theoretically, "Non-guaranteed" return rate means the return could be 0%, 1%, 2%, 5% or 10%. Nobody knows what will happen at the future (and the fund manager could not guarantee it).. So it's best to keep your expectation by looking at the lower return rate.
Let's take a look at the generated sample from X company, for a client paying $1200 per annum.
If the selected fund performs at 2.5% return over the 40 years, the client will only get ~$20k after paying $48k. Means the client might has 'burned' $28k for the 40 years insurance fees.
But the damage could up to $300k. If you invested your premium at a fund performs at 9% return over the 40 years, at the end you might get $300k. So, instead of looking at the Non-guaranteed Cash Value return figure, it's very important to take a look on the effect of reduction. tb continued.
No comments:
Post a Comment