Savings Plan

last SG · 2008-10-15T17:35:54+00:00

THe overall premium will be lower as i am looking at the prudential term plan which costs only $20 per mth.yes but what is the point of covering yourself on...

maurizio13 SG

insurance is for risk diversification, but if your risk is too high, no insurance would want to insure you, else they charge you high premiums.

cherrycola SG

Since we are on this topic, you guys think it is a good idea to have these insurance cum investment plans?

Gives insurance plus a regular savings plan.

My opinion is that insurance and investment should be seen as 2 separate entities.

maurizio13 SG

one of my friends, he paid like $1,500 a year for 15 years, turns out that his surrender value is only $30k plus, an implicit interest rate of around 5% a year.

initially i thought he must have at least $100k plus in his insurance.

maxtor SG

insurance is a long term commitment, i once had a friend who over bought her policy, when she lost her job, left in a predicament.

insurance is only worthwhile if you die immediately after signing the contract, else it's not worth it.

the returns you get from them, you can get better returns in the stock market (long term).

that is true. but illness/death is an uncertainty and there are people who do not want to take that risk.

let's say you are 30, married, have a housing loan, car loan, probably a kid on the way. if something happens to you the next day, the next month, the next year. who will pay for your housing loan? car loan? kid's expenses?

the thing about insurance is that it gives you peace of mind in the form of an immediate estate, something many people relish. nobody knows what will happen to them tomorrow, next month or in the next few years.

maxtor SG

BUt my current ntuc living policy also covers me up to 65 years only as well.

yes, then you should consider getting something that covers you for life. trust me, 10,20 years from now, you wouldn't regret it.

u might want to work on the assumption that you would probably be gainfully employed within the next 10-20 years, and therefore the bulk of the premiums should be settled during that time, while you have a stable income.

maurizio13 SG

that is true. but illness/death is an uncertainty and there are people who do not want to take that risk.

the probability of a healthy individual dying the next day after kid and marriage is slim, can check the mortality tables.

moreover i have the government's backing in saying that Singaporeans will live till 80-90.

with the current economic situation, what happens if the person gets retrenched and unable to pay his premiums.

maurizio13 SG

actually it's subjective, as for me, i have never believed in personal insurance.

i might change my views in the future, but chances of me changing my views are extremely slim.

cherrycola SG

yes, then you should consider getting something that covers you for life. trust me, 10,20 years from now, you wouldn't regret it.

I assume that those that cover for life are more expensive. I actually see the term plan as a temporary stable coverage. Should I have better financial ability in future, I would definitely consider a whole life plan.

maxtor SG

actually it's subjective, as for me, i have never believed in personal insurance.

i might change my views in the future, but chances of me changing my views are extremely slim.

i was exactly the same. i never believed in insurance, believing it to be a scam as well. well, i've been brainwashed :)

maurizio13 SG

i was exactly the same. i never believed in insurance, believing it to be a scam as well. well, i've been brainwashed :)

actually after learning more about finance and actuarial science, i am kinda more averse it more.

maxtor SG

with the current economic situation, what happens if the person gets retrenched and unable to pay his premiums.

that's a valid concern. there are plans in the market that will let you temporarily postpone your premiums indefinitely, yet cover you during the period you r retrenched as well.

maurizio13 SG

that's a valid concern. there are plans in the market that will let you temporarily postpone your premiums indefinitely, yet cover you during the period you r retrenched as well.

no offence, but,

do you deal in insurance?

cover for how long without paying premiums? indefinitely?

need to have accumulated sum in there or if the policy is in negative territory, you still allow coverage? or is it the insured using his positive values in there to deduct against premiums?

maxtor SG

u r right. they are more expensive. but if you are going to throw $20 p/mth down the drain every month (in the form of a term plan since there is no definitive cash value at the end) plus u plan to do some form of savings, why not do abit of both?

i see your concern. u want something temporary but covers you for now. today u are single, earn a meagre salary, and probably have no liabilities. a few years from now you will probably be married, earning more, but have alot more liabilities in the form of kids/loans/(this list can go on forever). when then is a good time?

there never is a good time. try to look at it as an investment, you r much better off that way.

cherrycola SG

there never is a good time. try to look at it as an investment, you r much better off that way.

What are some of the good life policies that you reccommend?

maxtor SG

no offence, but,

do you deal in insurance?

cover for how long without paying premiums? indefinitely?

need to have accumulated sum in there or if the policy is in negative territory, you still allow coverage? or is it the insured using his positive values in there to deduct against premiums?

yup i used to deal in insurance. i was a bank relationship manager with one of the local banks. have since left in search of greener pastures.

errm, with regard to the other question, coverage can be indefinite so long as there is an accumulated sum in there. the insured is using his positive values to deduct against premiums.

maurizio13 SG

yup i used to deal in insurance. i was a bank relationship manager with one of the local banks. have since left in search of greener pastures.

errm, with regard to the other question, coverage can be indefinite so long as there is an accumulated sum in there. the insured is using his positive values to deduct against premiums.

seriously, i have very little faith in personal insurance.

for those who are buying, i would advise you to buy a policy that you are very comfortable with, be certain of your future cashflows. don't end up like my friend who bought too much, when she lost job, she can't afford to pay.

maxtor SG

What are some of the good life policies that you reccommend?

Life policies, i would recommend OCBC's MaxLife Protector. They recently revamped it and they are now one of the most competitive in the market. Coverage is about $100k (initially) and it grows as you grow. Premiums are about $4k p/yr and they accumulate at about 3% p/yr. u only need to pay premiums for 15 yrs. Coverage is for life. There's a cashback component as well but that's optional.

Good - comprehensive coverage + savings accumulated at higher interest rates than banks. saving component meant to work as a forced saving option.

Bad - high premiums, illiquidity.

Otherwise you may want to consider the very first option i presented at the start of this thread. a regular savings plan with UOBLife's term plan.

viciouskitty74 SG

To TS,

I wont recommend a saving plan unless that plan covers more then death.

1. Saving plans no doubt may you save, but in the event that you are sick and needs money. That plan does not pay out nor does it excuse you from paying further premiums.

2. Saving plans has a definite time limit. If in the event you want to cash out that plan, that plan does not pay out, which means your $$$ are fully stucked inside and not refundable.

3. Interest from that saving plan, if you do look around, does not look more profitable from normal savings account. Do take note, saving plans are most time related to insurance. Savings or Save as You earn accounts are bank accounts. Plans for saving are totally different idea.

maxtor SG

seriously, i have very little faith in personal insurance.

don't worry. there will come a time where you will start to believe in insurance. simply because nobody would feel they too much money.

from my experience, usually it's the people who are better off financially that don't see the need for insurance yet. but sooner or later, they will. because all of us have some form of insurance one way or another. car insurance, mortgage insurance etc. etc.

cherrycola SG

To TS,

I wont recommend a saving plan unless that plan covers more then death.

1. Saving plans no doubt may you save, but in the event that you are sick and needs money. That plan does not pay out nor does it excuse you from paying further premiums.

2. Saving plans has a definite time limit. If in the event you want to cash out that plan, that plan does not pay out, which means your $$$ are fully stucked inside and not refundable.

Yes. I am aware of that. At the momen, I will not consider them until I have paid up my study loans.

« Previous Page Next Page »