Hai All,

Can you guys suggest which life insurance package is the best in the market which has good returns. Your input is highly regarded.

Thanks

Mine is on Prudential. Cash return is great all these years. I also bought lately for my newborn baby from my award winning agent.

There are none. Insurance for protection not investment. Don't buy life insurance just based on returns. You should look for best coverage

Hi Umapathy,

What is your purpose seeking for this type of insurance package? What is your objective? Whilst there're packages that provide good returns, please bear in mind that the primary objective of any insurance is to protect first. Savings is usually a secondary factor.

Cheers,

HH

it is umapathy's wish to choose if she wants to have profit from insurance or not....there is insurance coverage which gives both profit and also good coverage....which is participating insurance BUT it matures later...and of course the premium is more....but if you want you can always purchase policies as such...let me know if u r interested. Thanks.

i second cuebiz: Insurance for protection not investment.

The thinking is quite true for Americans - They think nothing about paying insurance knowing that they get nothing in the end. The same is not true of Malaysians.

All the insurance company in Malaysia know this. You stop a person on the road, and tell them, hey! Pay RM50 a year for P.A. and the first question they would ask is 'my money all burn a?'

Statistics don't lie. Take up for burn all GI policy were low, until few companies started pushing endownment, cash value, ILP products. Then it began to really go up when ILP+medical was introduced.

So, the insurance company marries a standard fund investment and to insurance and ILP is born. Before you say what does the insurance company know about trust fund, some of the biggest unit trust player in Malaysia happens to be unit trust from insurance companies. Heck, one insurance company actually manages all the islamic fund for the worldwide operation, based here in good old Malaysia.

You may be tempted, GI is cheaper. I can invest myself in other unit trust. Sure, GI cheaper know. See my siggy. Cheap, rite.

But Cheap no Good, Good not Cheap. Always remember that.

Because in the end, you may end up paying more. Age 19, Rm200 gets you a medical card for the whole year. Age 50? Age 60? Show me one GI where the premium you pay every year stays the same. There is none.

Overinsurance? Sure, don't overinsure yourself. People always think that no accident will befall them. James Dean? Grace Kelly? Princess Diana? These famous people, no problem la, very rich what. You? You jalan today, what happens to your family?

Even worse, living death. TPD, you cannot work, stuck in a wheelchair. Medical bills to pay. If you have ILP+Medical Card+Payor, guess what? The insurance pays your premium for you. Use the normally high life insurance limit to pay your bills. If you have GI? This year ok, next year, can you pay?

Hows this. Pay RM150 now, or RM1800 a year. Age 20. Get medical card, Ci, Death, Payor, Investment etc. Age 60? Still pay RM1800 a year, get the same medical benefits and all, plus money in the investment account. If you have been paying GI? Guess what, RM3k, and that's just for the medical card. No cash value, no investment, no nothing. That is if you don't face other difficulties.

Why is your investment, and cash value important? When you are sick, and cannot work, whose going to pay your policy? It can come out from your investment and cash value to tide you over. Or you can make a withdrawal, without cost. GI? No cash value, year to year renewal. Even worse, if you have Total, Permanent Disability. Still got to pay your medical card. Sure you got money?

But some say, investment so little. Of course, for the first 6 years normally, after more money goes to your investment. If you want to set aside a spesific amount of money just for investment, we can do that also. If you just want term, we have that also. Better still, term with us can convert to ILP or endownment at any time you wish.

My advice to those getting an insurance is this. Don't blind yourself to one aspect or opinion just because they sounded good. Seek other points of view. Ask them difficult questions. When you buy insurance, keep in mind that it is to protect you from musibah, But nicer still if you get good returns, we have a good selection of fund for you to choose. Heck, we have global fund if you think Malaysia is a too small of a pond to get high returns.

As for the original poster, PM me for more info on my co's fund performance.

Hi mfitri77,
Just curious..are you sure that by the age of 60 the RM1800 is enough to cover the insurance cost and no top-up is required? And just in case the customer is not very good at monitoring market and funds, and market collapse.. what is left in his ILP?

The good and bad about ILP has been discussed extensively in this forum, I hope all buyers would do a search in this forum using 'ILP' , have a good read before you jump ..

Let's just clear the fund issue first. ILP for Pru linked to unit trust fund managed by Prudential Fund Management Berhad. Choose your risk apetite, high medium or low. Fund managers then try their best to get you the best return by investing, eg high risk, low risk or a mix risk (medium). It doesn't differ from if you are investing in PNB.

The returns for ILP are normally moderated. Say for example fund performance is +12%, normally the fund manager only announce 9%. The 3% they keep, just to ensure that if next year's peformance goes down, say +8%, then they use the 3% in reserve to top up. This is the same thing PNB is doing. As always, check with your agent. Whoever sells you ILP must have passed the CEILLI exam to do so, and are well equipped to advise you.

In fact, theres not much difference between pru funds and say for example public mutual or any other trust companies. Difference maybe with pru fund, esp prubsn takaful fund, charges normally is between 0.3 to 1.5 % charged yearly of fund asset. Best part here is there are no charges imposed if you withdraw money from your investment, and you can withdraw anytime provided balance in investment account must be at a minimum of RM1000. Say you have 4k in your account, you can draw out 3k. No charges imposed.

As for the the first question, yes pru policy does have a clause that say they can revise the charges (all insurance have this) with a 90 day notification period. However, it does not state any planned increases in insurance charges. It also does not say that they can micro review your policy, the review they do is general, meaning everyone gets hit with the new charge should they decide to increase it. When we do a quotation, the premium you pay stays the same and you get the same benefits. If you pay Rm150 age 25 and you get PruHealth 100 with Lifetime limit RM500,000, you pay RM150 a month to get the same benefit when you are 60, and when you are most likely to use the card. Changes in premium only happens when there is major change in the medical card charges, again subject to the 90 days notification.

Benefit again if taking Pru as opposed to taking GI is if you made a claim. GI, sure, guaranteed renewal but premium are non guaranteed, therefore during renewal they can jack up the price because you are now non-standard risk. For pru, no such thing. Plus No Claim Bonus every year you don't claim. When they modify medical card policy, pru has never forced anyone under the old policy to upgrade, or make it mandatory to upgrade.

Then again, if life insurance charge go up, GI insurance charge also go up. Think GI going to charge 3k for 60 years old 20 years from now?

In summary, if there is no change in insurance charges, RM1800 enough. Bear in mind, that this payment is for all benefits, CI, Death, TPD, Payor, HB, H&S, Investment etc. Not just H&S.

If you really want to maximize return, then try PruBSN takaful. If not much claim that year, you can get back up to 70% from your insurance charges going back to your investment account.

This post has been edited by mfitri77: Mar 16 2010, 11:23 PM

Good explanation from Insurance + Fund seller.

Here`s a question; if the insurance investment`s doesn't make money or more basically bound for long term loss, How will the insurance pay for it?

Just look at American screwed up, AIG when it suppose to failed it didn't due to reason TBTF & alot in line if it go bust 2 years ago. Now they are basically still on lifeline of govt to live & sooner it will also go down the drain..

So How will this pay up if you really got fired, no job, have linked investment insurance but making loss & you are in the wheel chair..?

Lets clear up the Americans. AIG is a good example, they invest basically in the same toxic sub prime poison and therefore got tanked in like a lot of American company. However, their subsidiary here in Malaysia, which is AIA, doesn't tank or needed to be bailed out. Even better, it is considered AIG's best asset to be sold off to balance the books.

Bidders for the company includes Prudential, Manulife and a few others. Aka those not affected by American bungle up.

Why AIA not affected? Because they are under the purview of Bank Negara, which makes damn sure your insurance is not going to tank anytime soon by imposing a list of conditions, unlike the Americans where they basically let the banks and companies do whatever they want (And got punished real bad for it). Any product that insurers want to sell must get approval from BNM before you can sell it.

Okay, lets say the market is bad. What do you do? Tell your agent to park your investment in Bond Funds. The returns are atrocious (2-4%) but they are relatively safe investments (government bonds etc). That way you don't head for negative growth. Again, if market is bad, it will affect ALL market players, so probably everyone will default to this mode (thus getting you the same return as if you left it in the hands of pru)

A percentage of the premium you pay goes to paying insurance charges. The rest would go into your investment account. So your insurance charges are paid, regardless of how bad your investment account goes. Don't claim also got bonus, almost one month worth of premium.

You got fired, no job - Options - Premium Holiday, just pay insurance charges by deducting from your investment account. Money you set aside for investment helps keep your policy inforce. What this provides to you is cover and breathing space for you to get a job etc.

In a wheel chair - Premium free already what (TPD Payor benefits). The premium free until u die. Even better, if you are the payor for policies for children, they get free also until age 25. Okay or not?

As far as the investment making a loss, again, talk to your agent. Or tell your agent to monitor market situation. That's what you are paying us for. But if really the investment making a loss, your loss does not affect benefits outlined above. That's why its called whole life policy. You pay for whole life. Just like GI.

Take general insurance, no investment and cheap. Say you kena TPD. Maybe you have PA, but we also have PA. Same. But free policy? General, even if you are on wheelchair, you may even have to pay more. No free premium here. Suddenly the cheap doesn't look cheap anymore.

I see the obsession here is that most think insurance investment link will definately rugi. Unit trust where got one that doesn't rugi once in a while. Again, do a search, look at who the fund managers are, look at the fund size, look at the fund performance, check everything. Pru have a long history here in Malaysia, nearly 80 years. If you take the PruBSn Takaful, half owned by BSN who pumps the money while pru provide expertise. Ask your agent what the funny statement you get every year means. We are always happy to explain things to you.

Any more question.

yes,go for coverage instead of life.

Medical card for life cover starts at minimum from RM500,000 lifetime limit to 1.5 million. There are also riders that allows you to use more than the annual limit if needed. Enough cover?

GI, even if you take the minimum plan, whats the cover? Does it reach RM500,000? Normally only between 90-120k, annual limit 30k. Enough cover do you think?

i dont think the insurance is not investment is american thinking. but i wont go into that because i have done it before.

i'd appreciate it if we could agree to compare apples with apples and not bananas. what is the use to compare a min. 30k annual GI H&S product with a 500k annual limit cover? i'd want to compare insurances with SIMILAR level of coverage to have an objective point of view. 30k is not even worth mentioning in terms of cover. on the other hand 500k not an issue to obtain from GI as is 1,5 million. i am not sure what is the purpose of comparing 500k lifetime limit (small amount for say 45 years of coverage though!) with 90-120k.

back to topic: if i want to invest, i better go and invest. if i want insurance i better get insurance. be it from life or GI - i would always always stay away from adding further risk into an insurance by using ILP products because it makes no sense (to me) to buy safety at the expense of another risk (volatile returns). to me its a bit crazy (sorry for saying so) that anyone wants to INSURE himself against a risk and then opts to blend this insurance with built in risks. but maybe that's just me.

i am afraid we are / i am sort of deviating from the thread topic though.

mfitri77 ,

It is obvious that it is either you are not aware of the "rising" insurance charge per RM1K Sum assured that works in ILP products. Or, I must have been outdated about how ILP works lately. Very frequently customers are not aware of such 'rising cost' during the first 10 or 20 years (depending on what year they purchased the ILP), so, yeah.you paid RM150 pm for a xxxK coverage and it looks like it remains throughout...only when you are at your mid-life crisis and couple by bad market performance you will then see a letter from the insurance co. asking for a top-up premium notice.

In ILP statement you will see how each an every cost of the benefits you purchased are calculated.. Do take a close look and see how the insurance charges are deducting from your fund units.. And when your units in your fund is insufficient to cover the cost of the insurance (both your life and your medical!) you will then be hearing surprises from the insurance company very soon.

I hope my understanding of how ILP works still correct. And as I always said "ILP product is not meant for everyone". At certain age group, if you want to have low premium high coverage, there are other products that suit this requirement better than ILP.

Rgrds

Yes, the rising cost is there, in a table of charges by age. We always point that out to clients. What we also point out is if you feel you don't want risky ILP's, you either put your ILP bonds or get endownment or term. Rising cost will happens to all insurers, due to inflation etc. Again, it all goes back to your risk apetite.

GI also not immune from price increase. As I say, RM3k a year at age 60 is the rate now, what about in the future?

Sure, there are other products with low premium high coverage at certain age groups. TS however ask about investment return from insurance. The only answer people seemed to interested in supplying here is that its not a good idea.

The best returns is when you are dead.

So, let's agree not to tell your client "you pay $150 pm and that is the same after you reach 60"...

-- is misleading in a way......

Thought I put already in my post that premium could change subject to the 90 days notification period?

Hi,
2 things here :

1. premium for the sum insured (death) in ILP is on rising manner. You won't even notice that until you see more units are deducted from your fund balance.

2. premium medical card , is always based on age band. Of course again, you won't probably notice this in ILP unless you read your units transacted each month. Premium could change and you may get notice (im not sure if you ever get a premium change notice in ILP!), but again, as long as your unit balance is sufficient, it doesn't affect your Yearly Premium paid.

Until a fine day, you total units in your ILP are not longer sufficient to cover 1 & 2 above, you will then get a top-up letter (for this sure you will get from insurance co.) informing you that your units are insufficient, please TOP-UP, or means pls pay more in order to enjoy ur coverage...

I'm not an agent, all these info gathered are based on my research and detailed study of my 2 daughter's ILP policies. Do understand more how ILP works, I hope you will.