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Things you should read before buying an endowment plan

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Old 30-08-2016, 08:09 PM   #811
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There is no need to hope. Banks are far more likely to fail than insurance companies. Unless you are familiar with the capital requirements for banks and insurance companies, you just have to trust me on this.

The reason why MAS can transfer the policies to another insurance company is because MAS will be aware of the weakness of an insurance company long before it reaches a point where it will collapse (a lot of the payments happen many years later after all). At this point, they can easily revoke its insurance license and force the weak insurance company to sell its policies to another insurer at a low price. There are also insurers willing to increase their market share by offering to buy them at a loss.
I have seen an insurance co financial statements which made huge gain because it's investments appreciated during the good times. The money was 'distributed' or remitted. Then crisis came and suddenly itd investments were impaired and the loss was more than its equity. Had the crisis prolong surely some would face problems. There was another insurer whose impairment on its top ten investments would more than wipe out its equity had financial statements published at that wrong time.
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Old 30-08-2016, 08:35 PM   #812
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I have seen an insurance co financial statements which made huge gain because it's investments appreciated during the good times. The money was 'distributed' or remitted. Then crisis came and suddenly itd investments were impaired and the loss was more than its equity. Had the crisis prolong surely some would face problems. There was another insurer whose impairment on its top ten investments would more than wipe out its equity had financial statements published at that wrong time.
I am interested to know what insurance companies these are. Please PM if confidential.

In Singapore right now, there are no insurers with a high concentration in one investment. If they did, they will need to hold extra capital for concentration risk, which doesn't make sense for them.

If you are referring to financial crisis in 2007, then banks were much harder hit than insurance companies. AIG failed not because of their insurance business, but because of their derivatives business dabbling in credit default swaps.

Edit: this has gone off topic, let's go back to the main issue.
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Last edited by thekang; 30-08-2016 at 08:37 PM..
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Old 30-08-2016, 11:02 PM   #813
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http://mobile.nytimes.com/2016/08/14...ting.html?_r=0

"After months of considering their options, the Cooks ultimately decided to drop their life policy, walking away from the $55,000 that they had spent on it over the last 25 years, Ms. Sparks said. They took the remaining cash in the account, which totaled $4,100."

Song bo how insurers try to squeeze u dry till you die!
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Old 31-08-2016, 10:16 AM   #814
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http://mobile.nytimes.com/2016/08/14...ting.html?_r=0

"After months of considering their options, the Cooks ultimately decided to drop their life policy, walking away from the $55,000 that they had spent on it over the last 25 years, Ms. Sparks said. They took the remaining cash in the account, which totaled $4,100."

Song bo how insurers try to squeeze u dry till you die!
Normally I have no issue with your insurance bashing, but this time round you have stepped into an area you don't really understand.

Firstly, what is universal life? At risk of over-simplifying, you can see it as a US-style ILP invested in bonds, with a guaranteed minimum return (probably around 4% for the Cooks if they bought in 1990s as mentioned in the article).

Amazing right? Sounds like CPF SA! Are insurers earning from this? Of course not, the article itself already mentioned that they are losing money.

Secondly, why is their cash value so low? This is due to deductions for the cost of insurance based on their chosen coverage. The article mentioned that many people had a face value (i.e. sum assured) of $1 million or more, which is likely the same for the Cooks. This also explains why their premiums were increased drastically, since their cash value is too low to pay for $1 million coverage at their old age.

In this case, US insurers are trying to cut losses by making policyholders surrender. It's not as money-sucking as you make it out to be.
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Old 31-08-2016, 10:30 AM   #815
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Normally I have no issue with your insurance bashing, but this time round you have stepped into an area you don't really understand.

Firstly, what is universal life? At risk of over-simplifying, you can see it as a US-style ILP invested in bonds, with a guaranteed minimum return (probably around 4% for the Cooks if they bought in 1990s as mentioned in the article).

Amazing right? Sounds like CPF SA! Are insurers earning from this? Of course not, the article itself already mentioned that they are losing money.

Secondly, why is their cash value so low? This is due to deductions for the cost of insurance based on their chosen coverage. The article mentioned that many people had a face value (i.e. sum assured) of $1 million or more, which is likely the same for the Cooks. This also explains why their premiums were increased drastically, since their cash value is too low to pay for $1 million coverage at their old age.

In this case, US insurers are trying to cut losses by making policyholders surrender. It's not as money-sucking as you make it out to be.
you said so much, he will just bring out the very first thing and repeat everything again. after awhile you will understand what i mean. already put him into ignore list 1-2 weeks ago, so i can't see whatever he post anymore. no point keep repeating.
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Last edited by icyboiz; 31-08-2016 at 10:34 AM..
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Old 31-08-2016, 10:36 AM   #816
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Normally I have no issue with your insurance bashing, but this time round you have stepped into an area you don't really understand.

Firstly, what is universal life? At risk of over-simplifying, you can see it as a US-style ILP invested in bonds, with a guaranteed minimum return (probably around 4% for the Cooks if they bought in 1990s as mentioned in the article).

Amazing right? Sounds like CPF SA! Are insurers earning from this? Of course not, the article itself already mentioned that they are losing money.

Secondly, why is their cash value so low? This is due to deductions for the cost of insurance based on their chosen coverage. The article mentioned that many people had a face value (i.e. sum assured) of $1 million or more, which is likely the same for the Cooks. This also explains why their premiums were increased drastically, since their cash value is too low to pay for $1 million coverage at their old age.

In this case, US insurers are trying to cut losses by making policyholders surrender. It's not as money-sucking as you make it out to be.
chiu ish insurance agent?
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Old 31-08-2016, 10:37 AM   #817
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you said so much, he will just bring out the very first thing and repeat everything again. after awhile you will understand what i mean. already put him into ignore list 1-2 weeks ago, so i can't see whatever he post anymore. no point keep repeating.
chiu still never ans me why agents are peddling lousy products with decreasing NG returns
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Old 01-09-2016, 12:33 PM   #818
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Not sure how you are camping for these agents here.

Those who are wont be bothered to reply you.

Those are not not peddling these products wont be able to enlighten you since we are not doing it in the first place.

still camping for insurance agents to enlighten me why they are peddling products with large decreasing NG returns
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Old 01-09-2016, 12:41 PM   #819
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Not sure how you are camping for these agents here.

Those who are wont be bothered to reply you.

Those are not not peddling these products wont be able to enlighten you since we are not doing it in the first place.
you are an agent too?
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Old 01-09-2016, 12:44 PM   #820
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Yes I am.

Anyway i think there can only be 3 reasons:

1) Greed
2) Brainwashed
3) Ignorant to other better avenues

you are an agent too?
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Old 01-09-2016, 12:45 PM   #821
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Yes I am.

Anyway i think there can only be 3 reasons:

1) Greed
2) Brainwashed
3) Ignorant to other better avenues
oh you are from AIA

how do you abstain from these 3 reasons?
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Old 01-09-2016, 12:54 PM   #822
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Moral principals? I am not entirely sure how to answer this.

1) Greed -> You can never have enough and clients will blame you eventually, spoiling the r/s.
2) Brainwashed -> I am not easily waivered.
3) Ignorant to other better avenues -> I cant be ignorant if i want to do the right thing.

oh you are from AIA

how do you abstain from these 3 reasons?
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Old 01-09-2016, 02:53 PM   #823
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Moral principals? I am not entirely sure how to answer this.

1) Greed -> You can never have enough and clients will blame you eventually, spoiling the r/s.
2) Brainwashed -> I am not easily waivered.
3) Ignorant to other better avenues -> I cant be ignorant if i want to do the right thing.
what do you think about AIA Prime Life Policy?
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Old 01-09-2016, 06:27 PM   #824
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What about it? It is a whole life policy along with investment element just like any other WL plans. The plan has faded out already though long before i joined.

what do you think about AIA Prime Life Policy?
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Old 01-09-2016, 06:40 PM   #825
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What about it? It is a whole life policy along with investment element just like any other WL plans. The plan has faded out already though long before i joined.
http://www.turtleinvestor.net/surrendering-my-aia-prime-life-policy/

At the halfway mark in 2008 when I started working, I began collecting these annual letters as much as I could, and I can see that the projected surrender value was revised downwards.
Year 1997 : $21,385
Year 2008 : $17,544
Year 2010 : $15,718
Year 2012 : $16,448
Year 2016 : $16,449

Are all AIA WL policie like this too?
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