Bad advice on switching

Hi Mr. Tan,
I visited your blog and enjoy reading it. I need your advice on the following. Currently, I have (details of 4 policies provided)


Recently my new agent does an analysis and advise me that I required a life-policy. The agent suggested me to terminate the investment policy and get a life policy. The agent informed me that the premium paid till date is around $X and the surrender value is $Y (slightly more than $X). The agent cited that part of the investment profit are paid for the administration charge and others benefit like Death Cover, TPD and CCP.


I'm reluctant because I do not intend to terminate the investment policy but instead thinking of reducing the coverage amount so that the investment policy is indeed an investment policy not anything else. Please advise.

REPLY
It is bad to terminate an existing policy and buy a new policy. Do not buy a life policy that has high upfront charge. If you need additional cover, just buy a term insurance policy, e.g. available from Aviva (e.g. SAF scheme). If you need less cover, you can reduce the sum insured on the investment policy.

Get the benefit illustration from the agent (for the new policy) and show to me. I will tell you if the agent has given proper advice to you.

You can read my book, Practical Guide on Financial Planning. There is a chapter on how to deal with existing insurance policy, and a warning to avoid switching to a new policy.

The book is available here for $12, www.easysearch.sg/ishop