Death benefits + Lifelong Annuity
That means the insurance costs have to add up.
No brainer. There is no free lunch.
In Singapore context, nobody will ever buy a pure longevity insurance without death benefits.
Any insurance products that have cashbacks, rebates or cash values are all likely to sell well in Singapore.
Pure term insurances are perceived as "bad" products because one won't get back the premiums at end of term.
That is correct, investing on your own also has its own costs, which in today's climate is relatively low. This is not to say things won't change in the future but I'm hopeful it'll stay low.
I would like to add once again that different people have different views of things. Some prefer the cashback, some prefer higher interest. Some don't like the uncertainty of investing on your own and would rather leave it to someone else. Some prefer term insurances, some prefer whole life. Who is the say who is wrong? They all have their valid views.
However, you can argue for your point as follows -
An annuity is bad because there is a high upfront cost.
An annuity is bad because the surrender value is likely to be much lower than the invested amount especially when the plan is near inception.
An annuity is bad because you have little to no control over how your funds are being managed.
And on the other side,
Investing on your own is bad especially during your later years where costs become unknown and markets could be volatile.
Investing on your own is bad because there is a higher element of risk from liquidating your assets to fund vices.
Investing on your own is bad because when you're older you might not make the same sound financial decision as you can now.
There are lots of things to consider, but the important thing to take away is that no strategy is inherently bad (talking about legitimate products/strategy and not scams). It all boils down to preference.
