Life insurance products can give good value

Some people argued that whole life, whole life limited premium and other life insurance products can meet the needs of certain categories of people and can be considered as good products.

This is correct.

Life insurance products can be designed to be good for consumers. They become bad products when they are designed to pay high commission to the agent and give poor value to the consumer. This high cost is not disclosed to the consumer.

Unfortunately, most of the products in the Singapore market are designed to be high cost, good for the agent and bad for the consumer. Up to two years of the premium are taken away to pay the commission and marketing expenses. If the monthly premium is $300, the amount of the hard earng savings taken away from the policyholder can be as much as $7,200.

This is a lot of money to be taken away from the unsuspecting policyholder, and is not told to the policyholder at the point of sale. This fact is hidden in the Benefit Illustration among 20 pages of confusing information.

If the charges are kept at a reasonable level, say a maximum of half year's premium (which is still a lot of money) and this is clearly disclosed to the policyholder, then a whole life, endowment or investment linked policy can be considered to be a good product and is suitable for most people.