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Old 16-01-2017, 10:41 AM   #31
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I guess I belong to those type that I don't know what to buy and if it is worth while to buy, after hearing so much and so much choices to choose from
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Old 16-01-2017, 12:40 PM   #32
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Do I not get what you mean by not guarenteed yearly, or do you not get what I mean instead?

Guaranteed n% of interest, regardless what "n" is, is the rate of return annually, i.e. n% p.a.
It is not guarantee n% interest after 20 years. Note the difference.

whether to lock the money up or not should not be decided solely by the duration. It can be 10 years, 15 years or even more than 20 years, but as long as you don't over commit for the intended duration, and you have your emergency fund in the bank that gives you immediate liquidity, you are perfectly fine to just leave that portion of cash sitting locked.

Compared to putting 100% of available cash in the bank account, you get say, 1.95% more every year by putting the excess in such endowment.
SSB provides more than 2% with flexibility to take out anytime and interest that is guaranteed by the government. Don't see any reason to get savings plan when they are so much less flexible without paying out much more. If it's 3.5% guaranteed then it makes more sense.
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Old 16-01-2017, 01:32 PM   #33
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I guess I belong to those type that I don't know what to buy and if it is worth while to buy, after hearing so much and so much choices to choose from
You are not alone, but at least you admit on your flaws and there's where the road to knowledge harvesting begins. 👍🏻
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Old 16-01-2017, 01:34 PM   #34
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SSB provides more than 2% with flexibility to take out anytime and interest that is guaranteed by the government. Don't see any reason to get savings plan when they are so much less flexible without paying out much more. If it's 3.5% guaranteed then it makes more sense.
SSB is fixed int at a little above 2% if you hold on 10 years. Endowment could give you guarenteed ~2% with non-guaranteed that could potentially add up to ~4%.

Goes back to risk and reward.
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Old 17-01-2017, 10:09 AM   #35
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How well covered should one be in terms of insurance?
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Old 17-01-2017, 10:32 AM   #36
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There are different calculations.

Most common way is to use your annual income multiply by how long your dependents will rely on you. (Can be your children, parents, spouse). This is for death coverage.

Critical illness wise people generally use 3-5 years as a gauge multiplying your annual income. For example, according to Singapore Cancer Society, 9/10 people with certain cancer survive for at least 5 years.

How well covered should one be in terms of insurance?
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Old 17-01-2017, 10:40 AM   #37
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There are different calculations.

Most common way is to use your annual income multiply by how long your dependents will rely on you. (Can be your children, parents, spouse). This is for death coverage.

Critical illness wise people generally use 3-5 years as a gauge multiplying your annual income. For example, according to Singapore Cancer Society, 9/10 people with certain cancer survive for at least 5 years.
So to say, generally speaking, we should at least have a term or wholelife + CI?
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Old 17-01-2017, 10:51 AM   #38
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So to say, generally speaking, we should at least have a term or wholelife + CI?
it is good to have a combination
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Old 17-01-2017, 12:38 PM   #39
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Generally I will suggest a mix of whole life and term with CI protection.

Whole Life with CI is because of guaranteed protection for whole life (taking into consideration spouse as a dependent)

Term with CI to increase your coverage in a more affordable manner to maximize your coverage.

So to say, generally speaking, we should at least have a term or wholelife + CI?
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Old 17-01-2017, 12:49 PM   #40
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No wonder my 60+ yr old ex-clients are complaining to me that younger insurance agents are innumerate, cannot calculate or have selective deafness.

All along I have stressed total commission, and yet you say it is "utter nonsense" to earn $2000 to $5000+ commission for an insurance product.

Then now you say about finding customers who can pay $2000 to $5000 a month in premiums.

Yen-neh, you don't need to find someone who is willing to pay $5000 a month in order to earn $5000 commission!

I give you an example:
20-year Limited-pay wholelife plan $200K for male customer 29 yr old.

The premium for one of the "cheaper" plan in the market is already $5200+ per year, or $450/mth if pay monthly.

What's the commission? You know, I know, the commission over 5 to 6 years is total $5700+.

Now let me ask you, is $200K sufficient for this guy? Don't know right? Have to do financial needs analysis first and consider his financial situation right?
Let me tell you, no need to analyse so much ... if he can afford to pay $450/mth for insurance, $200K is definitely insufficient coverage for his income level.

Finally what is the projected rate of returns, even for the optimistic projection? Using both financial calculator and Excel to confirm, the 40 years return of the above "better value" wholelife is a grand 3.0% per annum. FYI, the projected inflation going forward will be around 3.5%pa. Therefore if you think wholelife is a good savings vehicle, you are actually standing a very high chance of losing out to even inflation.

So you think par insurance products are good deal and not CON jobs?? Even when provide insufficient coverage and the cash values cannot even barely beat inflation rate?!?

2 Rules Of Thumb here: LIA advises adequate coverage of 10X your annual income especially if you have dependants. Secondly, you should NOT spend more than 5 PERCENT of your take home pay to buy that 10X insurance cover.

How right? Impossible right?!? Let me tell you if you can do the above 2 things for your clients, then you are not CONNING them. And I can tell you that customer can cover for $500K with less than $50 a month. Therefore average Joe can more than adequately cover himself as you put it -- most only can afford "$100-200 per month".

http://tankinlian.blogspot.sg/2010/0...nce-agent.html

the comments section jin juicy

so much insights into agents' "strategies"

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Old 17-01-2017, 01:33 PM   #41
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Generally I will suggest a mix of whole life and term with CI protection.

Whole Life with CI is because of guaranteed protection for whole life (taking into consideration spouse as a dependent)

Term with CI to increase your coverage in a more affordable manner to maximize your coverage.
While I agree with a WL + Term combo, but I don't think the purpose of WL should be for guaranteed protection for whole life. Cash value diminishes by inflation whereby the sum assured to close to pathetic for any risk management purpose, unless something happens to life assured in their early years whereby inflation has yet eroded much of the sum assured value.

The only reason for a WL is just that should the life assured not make any claims after a certain age and wishes to wothdraw the cash value, at least given a 3% yield, the full premiums paid is so-called refunded back to the policy holder to break even with inflation. That's about it.


So to say, generally speaking, we should at least have a term or wholelife + CI?
Basic needs are fulfilled cost effectively with Term (inclusive of Death/TPD/CI coverage) and a Hospital plan. If you don't have ways to grow your wealth by 3% p.a., consider a Term + WL combo to meet your sum assured required and at the same time grow your money should you not make any claims.

Last edited by Bigoya; 17-01-2017 at 01:39 PM..
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Old 17-01-2017, 09:34 PM   #42
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Agree with the cash value part too as it is an guaranteed option for the client as well.

But because investment risk is still there in cases of a market crash, I still prefer some guaranteed form of protection instead of having to sell off investments should the timing be off in those times of need.

While the cash value diminishes overtime, that level of coverage is still available least you do not have to sell off all your investments straightaway, or rather parts of it since the portfolio should have some diversification.

While I agree with a WL + Term combo, but I don't think the purpose of WL should be for guaranteed protection for whole life. Cash value diminishes by inflation whereby the sum assured to close to pathetic for any risk management purpose, unless something happens to life assured in their early years whereby inflation has yet eroded much of the sum assured value.

The only reason for a WL is just that should the life assured not make any claims after a certain age and wishes to wothdraw the cash value, at least given a 3% yield, the full premiums paid is so-called refunded back to the policy holder to break even with inflation. That's about it.
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Old 17-01-2017, 09:45 PM   #43
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Agree with the cash value part too as it is an guaranteed option for the client as well.

But because investment risk is still there in cases of a market crash, I still prefer some guaranteed form of protection instead of having to sell off investments should the timing be off in those times of need.

While the cash value diminishes overtime, that level of coverage is still available least you do not have to sell off all your investments straightaway, or rather parts of it since the portfolio should have some diversification.
I'm lost already. Or are you lost?

"Agree with the cash value part too as it is an guaranteed option for the client as well."
Not sure what are you referring to...


"But because investment risk is still there in cases of a market crash, I still prefer some guaranteed form of protection instead of having to sell off investments should the timing be off in those times of need. "
Protection to me is ment only as a protection. It is not meant to be terminated for the whatever cash value (although you can) should financial crisis arise. There is a reason for emergency cash to be kept in the bank or somewhere liquid.
Protection is only for the big crisis should you loose your income due to TPD/CI or your life. The Sum Assured payout is meant to last longer than 6 months, or even years.
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Old 18-01-2017, 10:51 AM   #44
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While I agree with a WL + Term combo, but I don't think the purpose of WL should be for guaranteed protection for whole life. Cash value diminishes by inflation whereby the sum assured to close to pathetic for any risk management purpose, unless something happens to life assured in their early years whereby inflation has yet eroded much of the sum assured value.

The only reason for a WL is just that should the life assured not make any claims after a certain age and wishes to wothdraw the cash value, at least given a 3% yield, the full premiums paid is so-called refunded back to the policy holder to break even with inflation. That's about it.




Basic needs are fulfilled cost effectively with Term (inclusive of Death/TPD/CI coverage) and a Hospital plan. If you don't have ways to grow your wealth by 3% p.a., consider a Term + WL combo to meet your sum assured required and at the same time grow your money should you not make any claims.
Okay! i will go and look through the plans available in the market.
Btw, say at a age of late 20s, what do you think the average premium monthly for such plans?
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Old 18-01-2017, 01:44 PM   #45
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I guess I belong to those type that I don't know what to buy and if it is worth while to buy, after hearing so much and so much choices to choose from
you are definitely not the only person. There are so many companies with so many products.
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