Sep 25 2012, 05:01 PM
QUOTE(gark @ Sep 25 2012, 10:28 AM)
From your previous post, I cans see that you are way over insured (medical, life, annuity, etc etc), paying so much premium until you are in financial trouble. Insurance is for protection and it is never meant for Investment. If you want to invest, only invest with money you can afford to lose. You should never have insurance premium > 10% of your earnings, otherwise you are just enriching the insurance industry with things that might or might not happen.
Using Insurance as a investment fails Investing 101.
Added on September 25, 2012, 10:43 am
Learn to calculate before you invest.. lar...don't be fooled by insurance agents...read the brochure
Taking example PRU Double Cash Reward...basic policy
Each Year premium is RM 20,180 x 10 years = 201,800
Yearly Reward = 3000 x 10 + 6000 x 10 = 90,000
Maturity Benefit (Taking PRU 7% gain which is on high expectations) = 222,181
Based on 20 years investment, you invest 201,800 to get 312,181 in 20 years.. your annual CAGR is ... drumroll please... 2.21% per year.
Even if you factor in tax savings of Rm 3K/year (if got).. your CAGR barely rise to 3.11%...
Feel satisfied with your 'earning'? Still want you buy? Please go ahead then....
Good analysis. Using Insurance as a investment fails Investing 101.
Added on September 25, 2012, 10:43 am
Learn to calculate before you invest.. lar...don't be fooled by insurance agents...read the brochure
Taking example PRU Double Cash Reward...basic policy
Each Year premium is RM 20,180 x 10 years = 201,800
Yearly Reward = 3000 x 10 + 6000 x 10 = 90,000
Maturity Benefit (Taking PRU 7% gain which is on high expectations) = 222,181
Based on 20 years investment, you invest 201,800 to get 312,181 in 20 years.. your annual CAGR is ... drumroll please... 2.21% per year.
Even if you factor in tax savings of Rm 3K/year (if got).. your CAGR barely rise to 3.11%...
Feel satisfied with your 'earning'? Still want you buy? Please go ahead then....
As i always emphasize, insurance is mainly / strictly / specially / particularly for Wealth Protection.. Wealth Protection.. Wealth Protection to each customers or prospects. So, fact finding is very important to identify what is the main financial objective of our customers or non-customers (most of the time my friends would ask since i am in the industry). If their objective is to invest, please lah dont "con" them into purchasing with all kind of reasons like saying this is a savings plan with free insurance coverage. I have also experienced with bank bancassurance staff telling me the same thing.
Financial planning / insurance planning is a long term commitment. Not to play a fool into wasting people's trust and hard-earn money into buying something that don't fit the needs.
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