Avoid policies with high terminal bonus

An independent financial adviser shared this view with me. Most insurance plans now have a high terminal bonus that is not guaranteed.

He finds it difficult to recommend this plan, as the policyholder can not be sure if he will get a fair return on the policy. The percentage of terminal bonus vary from one policy to another. The policyholder may wonder why some other policies are given a higher terminal bonus than his policy.

He has decided that he will not sell any life insurance policy. He prefers to sell unit trust, as it is more transparent and fair to the policyholder, and more flexible.

I agree with his views. It is best for the consumer to avoid all life insurance policies with high terminal bonus, unless the cash and maturity payouts are required to follow the "asset share" method, as adopted in Malaysia.