A friend recommends a whole life policy and earns $10,000 in commission.
Watch this video:
http://www.youtube.com/watch?v=6vnN9liFWaE
Monday, September 8, 2008
Suitable products depending on needs
Some readers argued that certain products are not inherently bad. They are suitable for certain people, according to their needs. This is only partly true.
Here are my points:
> A product is bad, if it is designed to "cheat" people. This type of product has high charges that are hidden from the consumer.
> These products are "pushed" by agents or marketeers, who mislead the consumer through their "marketing techniques".
Most life insurance "savings" products and structured financial products fall in this category.
The good products are those that do not need to be marketed. They are bought by the consumer, usually over the counter. They include:
> bank deposits
> government bonds
> low cost unit trust
> term insurance products
Here are my points:
> A product is bad, if it is designed to "cheat" people. This type of product has high charges that are hidden from the consumer.
> These products are "pushed" by agents or marketeers, who mislead the consumer through their "marketing techniques".
Most life insurance "savings" products and structured financial products fall in this category.
The good products are those that do not need to be marketed. They are bought by the consumer, usually over the counter. They include:
> bank deposits
> government bonds
> low cost unit trust
> term insurance products
Advice on Vivolife
Hi Mr. Tan,
You must be familiar with NTUC Vivolive. An agent tried to sell it to me...Is it of any good value? It seems to be a whole life policy.
REPLY
You should ask the agent to explain the following figures to you:
1. What is the value of the premium accumulated at 3.75% and 5.25% after 20 years or at age 65 ?
2. What is the projected cash value of the prolicy after 20 years or at age 65
3. What is the percentage reduction from the value of the premium represented by the cash value?
4. If the percentage reduction is more than 30%, the policy is expensive.
5. What is the amount deducted from your policy as distribution cost (mainly to pay commission to the agent)
Read this FAQ:
http://www.tankinlian.com/faq/true.html- Hide quoted text -
You must be familiar with NTUC Vivolive. An agent tried to sell it to me...Is it of any good value? It seems to be a whole life policy.
REPLY
You should ask the agent to explain the following figures to you:
1. What is the value of the premium accumulated at 3.75% and 5.25% after 20 years or at age 65 ?
2. What is the projected cash value of the prolicy after 20 years or at age 65
3. What is the percentage reduction from the value of the premium represented by the cash value?
4. If the percentage reduction is more than 30%, the policy is expensive.
5. What is the amount deducted from your policy as distribution cost (mainly to pay commission to the agent)
Read this FAQ:
http://www.tankinlian.com/faq/true.html- Hide quoted text -
Big exchange loss in a Dual Currency Investment
Hi Mr. Tan,
I invested in a Dual Currency Investment two years ago and made a good return. Recently, the AUD depreciated against the USD. All of my investments got converted to AUD at 0.90. The exchange rate has now dropped further to 0.816, which makes the unrealized forex loss to US$50K.
What strategy should I take to minimized the loss? Right now, while waiting for the AUD to do better against USD, I have placed my money into a weekly time deposit earning almost 6%p.a.
REPLY
It is all right to keep the AUD in fixed deposit and earn 6% interest. There is a chance that it will recover, as it has dropped by more than 10%.
If you had invested in the AUD directly, instead of a DCI investment during the past two years, you would have made an exchange gain that is more than the loss that you suffer now. But, if you invested in the DCI, your gain would have been much lower.
I usually advise people to avoid DCI, as the investor is taking the risk of a loss (like you did), it was not able to enjoy the full appreciation (if the currency goes up).
Read this FAQ:
http://www.tankinlian.com/faq/duali.html
I invested in a Dual Currency Investment two years ago and made a good return. Recently, the AUD depreciated against the USD. All of my investments got converted to AUD at 0.90. The exchange rate has now dropped further to 0.816, which makes the unrealized forex loss to US$50K.
What strategy should I take to minimized the loss? Right now, while waiting for the AUD to do better against USD, I have placed my money into a weekly time deposit earning almost 6%p.a.
REPLY
It is all right to keep the AUD in fixed deposit and earn 6% interest. There is a chance that it will recover, as it has dropped by more than 10%.
If you had invested in the AUD directly, instead of a DCI investment during the past two years, you would have made an exchange gain that is more than the loss that you suffer now. But, if you invested in the DCI, your gain would have been much lower.
I usually advise people to avoid DCI, as the investor is taking the risk of a loss (like you did), it was not able to enjoy the full appreciation (if the currency goes up).
Read this FAQ:
http://www.tankinlian.com/faq/duali.html
Choice of term or personal accident insurance
Dear Mr. Tan,
I have read your blog and website. Your articles are really helpful to individual investors at the grassroots.
I have term life and personal accident policy. You mentioned that it's reasonable to have sum assumed 5 to 10 times of annual income. Does this ceiling apply to life and personal accident respectively or separately? Should the aggregate sum assumed be taken to make up the ceiling?
REPLY
If you can afford the premium, you should buy term insurance for the target sum of 5 to 10 years of salary. Term insurance covers death from accidents and illness.
If you with to reduce the cost, you can insure the target sum partly by term insurance and partly by accident.
You should get the quotation of the cost and make your decision based on the figures.
I have read your blog and website. Your articles are really helpful to individual investors at the grassroots.
I have term life and personal accident policy. You mentioned that it's reasonable to have sum assumed 5 to 10 times of annual income. Does this ceiling apply to life and personal accident respectively or separately? Should the aggregate sum assumed be taken to make up the ceiling?
REPLY
If you can afford the premium, you should buy term insurance for the target sum of 5 to 10 years of salary. Term insurance covers death from accidents and illness.
If you with to reduce the cost, you can insure the target sum partly by term insurance and partly by accident.
You should get the quotation of the cost and make your decision based on the figures.
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