Effect of deduction and distribution cost

Dear Mr Tan,
My mother just bought a Whole Life insurance that is payable for 24 years. She also tag on a Critical Illness rider.

After reading your numerous posts on how expensive life policies are, I would like to seek your comments on the benefit illustration given to my mother. She is currently still in the 14-days free-look period.
 
REPLY
The benefit illustration shows that the distribution cost is almost two years of premium and the effect of deduction is more than 40% of the value of accumulated premium. They are both too high, giving poor value to the policyholder.


Please read my book, Practical Guide on Financial Planning to understand these two important measures.
The book provides the benchmark on what is an acceptable level for the effect of deduction for various durations of the policy. You can buy the book at www.easysearch.sg/ishop

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