Wholelife vs BTIR

[wts2013]

Only read insurance coys and agents huating.

Jin sad

U should be happy they are huating and will likely outlive u, otherwise your Term insurance is surely 100% down the drain, dead or alive :

Whole life policy holders still can get back their money leh, look back what happened to one insurance co in 2008 (cannot remember exactly when and name of co), many people panic and terminate their policies to get money back,

My friend tell me she dun want to terminate cos in a few months, her policy will hit the critical period and double in surrender value, luckily the co was saved subsequently, her policy is safe

 

[akwl88]

U should be happy they are huating and will likely outlive u, otherwise your Term insurance is surely 100% down the drain, dead or alive :

Whole life policy holders still can get back their money leh, look back what happened to one insurance co in 2008 (cannot remember exactly when and name of co), many people panic and terminate their policies to get money back,

My friend tell me she dun want to terminate cos in a few months, her policy will hit the critical period and double in surrender value, luckily the co was saved subsequently, her policy is safe

Lol term insurance cannot back the money what. What talking you???

SINGAPORE : The Monetary Authority of Singapore (MAS) has urged AIA policyholders not to act hastily to terminate their insurance policies, as queues formed outside AIA's offices on Tuesday, with some clients seeking to end their policies. AIA is a subsidiary of New York-based American International Group (AIG) - one of the world's largest insurers - which has been hit by the financial meltdown.

Some Singaporeans are concerned that AIG could be the next financial giant to fall after Lehman Brothers. With regards to AIG, MAS said: "The value of these assets is not linked to AIA's or AIG's financial condition, but like all investments, their value may be affected by general market conditions."

The MAS assured the public that "AIA currently has sufficient assets in its insurance funds to meet its liabilities to policyholders". It advised policyholders not to act hastily to terminate their insurance policies as they may suffer losses from the premature termination and lose insurance protection.

MAS explained that there are regulatory requirements, ensuring that all insurance companies maintain statutory insurance funds, including an investment-linked fund. This fund is segregated from its head office and other shareholders' funds. Within these funds, insurance companies must maintain sufficient assets to meet all its liabilities to policyholders, which include participating policies and investment-linked policies.

MAS monitors the situation closely, and requires insurance companies in Singapore to manage their investment risks carefully. The MAS will continue to monitor the financial health of AIA. It added that a Policy Owners Protection Fund could also be set up, if necessary. Meanwhile, many policyholders waited outside AIA's office to find out if AIA will be among those that will be hit by the credit crisis in the US.

A queue started since morning and some had to wait for up to four hours. A few long-term AIA policyholders told Channel NewsAsia that they wanted to surrender their policies, despite incurring losses for premature termination. One of them, 51-year-old Morgan Krishnan, is not taking any chances.

He has decided to terminate three life insurance policies - for himself and his two sons. He said: "I have been monitoring this for a few years, and I am giving up right now... I will make some returns, I will not make any loss." Meanwhile, another policyholder said: "I just want to cash out the policy, and I have no intention of putting my money here anymore."

Yet another said: "I contemplated surrendering it a few years ago, so I guess it's about time." And another noted: "AIG was mentioned in those reports, so we just wanted to make sure that whatever we have is going to be safe." However, some policy holders are optimistic and confident that the MAS has the situation under control.

AIA has about two million policies which are in force in Singapore. In a statement, AIA said it maintains separate insurance funds for all policies issued by its Singapore arm. Despite the short-term liquidity pressures, it assured that the company has sufficient capital to meet its obligations to policyholders. - CNA/ms

 

[wts2013]

Lol term insurance cannot back the money what. What talking you???

u say die can wor, now I tell u die also cannot cos insurer close down

 

[akwl88]

u say die can wor, now I tell u die also cannot cos insurer close down

if death, cannot make claim on term cuz insurer close down?

 

[soneat]

By the way, if insurer really runs into trouble.
There's this "Policy Owners’ Protection Scheme". Covers up to S$500,000 per person for life policies.

Types of life insurance policies covered


The PPF Scheme protects all life insurance policies (including riders) issued by registered life insurers which are PPF Scheme members. This would include policies issued to non-Singapore residents (offshore policies), but not policies issued by overseas branches of a registered life insurer incorporated in Singapore. Examples of life insurance policies include the following:

•Individual term policies
•Individual whole life policies
•Individual endowment policies
•Individual annuities
•Individual short-term or long-term accident & health (A&H) policies (e.g. Hospital cash, Medical Expense, Personal Accident, Disability Income, Long-term Care)
•Group term policies
•Group whole life policies
•Group endowment policies
•Group annuities
•Group short-term and long-term accident & health (A&H) policies

http://www.mas.gov.sg/~/media/resou...icy Owners Protection Scheme_ Regns 2011.ashx

 

[akwl88]

By the way, if insurer really runs into trouble.
There's this "Policy Owners’ Protection Scheme". Covers up to S$500,000 per person for life policies.

Types of life insurance policies covered


The PPF Scheme protects all life insurance policies (including riders) issued by registered life insurers which are PPF Scheme members. This would include policies issued to non-Singapore residents (offshore policies), but not policies issued by overseas branches of a registered life insurer incorporated in Singapore. Examples of life insurance policies include the following:

•Individual term policies
•Individual whole life policies
•Individual endowment policies
•Individual annuities
•Individual short-term or long-term accident & health (A&H) policies (e.g. Hospital cash, Medical Expense, Personal Accident, Disability Income, Long-term Care)
•Group term policies
•Group whole life policies
•Group endowment policies
•Group annuities
•Group short-term and long-term accident & health (A&H) policies

http://www.mas.gov.sg/~/media/resou...icy Owners Protection Scheme_ Regns 2011.ashx

What is policy owners’ protection?
A: The Policy Owners’ Protection Scheme (PPF Scheme) protects policy owners in the event a life or general insurer which is a PPF Scheme member fails. The PPF Scheme provides 100% protection for the guaranteed benefits of your life insurance policies, subject to caps where applicable. For example, for individual life and voluntary group life policies, there are aggregate caps applicable, namely S$500,000 for the guaranteed sum assured and S$100,000 for the guaranteed surrender value per life assured per insurer. The PPF Scheme also provides 100% coverage for the types of general insurance policies covered under the Scheme. No caps are applicable for protection of your general insurance policies.

 

[cybercom8]

haha why u assume btir pple are investment gurus making high returns consistently every year?

i say the truth, insurance coys and agents are huating-

http://www.straitstimes.com/business/companies-markets/sales-down-profit-up-for-prudential

http://business.asiaone.com/news/aia-singapore-posts-24-cent-rise-expected-profits-us341m

nope. portfolio is currently -3.87%

How about yours?

wah, market so bad still can huat

my portfolio still down by $200+K

 

[akwl88]

wah, market so bad still can huat

my portfolio still down by $200+K

wah elite spotted! jsk!

 

[cybercom8]

U should be happy they are huating and will likely outlive u, otherwise your Term insurance is surely 100% down the drain, dead or alive :

Whole life policy holders still can get back their money leh, look back what happened to one insurance co in 2008 (cannot remember exactly when and name of co), many people panic and terminate their policies to get money back,

My friend tell me she dun want to terminate cos in a few months, her policy will hit the critical period and double in surrender value, luckily the co was saved subsequently, her policy is safe

think it was A.A

 

[Asphodeli]

I'm not delving into the calculations derived by wts2013 here but I agree on some of his points as my own NTUC life policy bought by my parents for me in the late 90s is doing very well as some has mentioned here.

Current surrender value less premiums paid is around 10% pa in total returns (no adjustment for inflation etc.) while the bonus returns about 5% pa for the yearly premiums now (depends on market performance). I think this is very decent.

I'm not sure in today's context whether such life policy is in place - I doubt so. But if BTIR is not applicable due to an individual's risk appetite, I will also favour NTUC insurance policies as the next alternative.

Yeah it's possible to get super good returns with NTUC living policy if you bought it (or more likely, your parents bought it) during the 90s, but also remember that at that time during the 90s, bond yields and interest rates were quite high, and thus it is possible to get good returns. However, in recent years after the turn of the century, bond yield rates have started to come down, especially after the 2008/2009 global financial crisis. Given NTUC's investment allocation of 67% bonds (IIRC they don't change their mix much), it's quite fair to say that whole life policies in the long run function like a inflation-linked bank account; that's why I don't consider whole-life policies as an investment; it's mainly a capital-guaranteed protection for me in my books.

In short, it's quite a high price to pay (i.e. liquidity/returns risk) for someone who knows how to invest, but to the average Singaporean who works 9 to 5, it's more likely they will buy a whole-life policy and forget about it until they reach retirement age, given the general apathy towards financial knowledge here - hence you see quite a lot of old folks at the Annual General Makans organized by SGX-listed companies.