That is true, that's why I always asked my customer to contributed 5% of his income into protection and another 5% into saving which he/she can easily used in case of emergency.(easily access to the money such as bank)



Please, insurance is not a get rich scheme . It is for protection against loss of income or maybe as a form of savings. I dont remember saying insurance can make you rich.. However, he/she can die a millionaire

That's also true. I dont remember saying this one also. Its only an important part of financial tool



crystal_kit85,
If your child is smart enough to qualify for a university, will you be smart enough to provide for it? Obviously, your child got his/her genes from you. It would be far too late for you to wait till the day he/she gets her reseults for you to make a provision. Five or ten years before they are due for university is a good time to start a savings plan to accumulate the funds.

There may also arise the situation where your child prefers to pursue a certain course of study not available at here. Getting into university is one thing, getting into one's preffered course of study may be another. Being able to provide for what your child chooses to study ( for they usually study best what they like most) is foresight par excellence.

But what after you have provided, your children do not get a place in any university? In that unlikely event, you can cash the policy and go for a long holiday. You deserve it if they dont !

This post has been edited by Civil: Dec 15 2006, 01:08 PM

How would one define a good investment ? Too often, only one criterion is mentioned - rate of return, usually measured in terms of interest. Lately, any investment which gives a 10% return is viewed favaourably because bank savings rates hover at 3-4%.

Probaly, the most meaningful definition of investment should be "Pays best when needed most"

An investment vehicle may promises a 20% return. But at the very moment of need, i.e required cash, it may not be very liquid or fetch a comparable price. It behaves like a Fixed Deposit interrupted in mid-term!.

But various life insurance companies have been able to provide a competitive rate of return. One company may had a proven 11.8% average annual return over the last 10 years (1983-1992). Had an investor placed 10k with the company, that amount would have grown to 30.5.k . And during that entire period, the policy would have prvided life insurance cover at no extra cost.

Different company have responded to the market needs with attractive policies which not only promise a safe investment above bank saving rate of return but also provide life cover at no additional charge !

Again, whenever we talk about investment, we are talking about big numbers here. Yet the average life insurance premium is only a few hundred and thousand ringgit, not large enough to warrant term "investment". Most investment advisor would not "touch" such small sums. So, life insurance provided a guaranted investment...at the moment when needed most.

This post has been edited by Civil: Dec 15 2006, 06:03 PM

This statement is a misleading one, they normally state as projected return when you buy the insurance and the actual return rate is depended on the insurance company investment performance.

I am not arguing that insurance is good or bad, since different insurance with different policy has its good and bads. Just to point out some fact that insurance buyers should be aware off. The returns rate is depended insurance company investment performance, if their investment perform well then surely they give extra bonuses in it while if their investment is suffering then surely return rate is low.

FYI, insurance company did invest significant amount in stock market, bonds, as well as companies that's where their returns come from.

This post has been edited by cherroy: Dec 15 2006, 04:03 PM

Please read carefully,I wrote "at the moment when we needed most" . I didnt mentioned the return rates are guaranteed!!

This post has been edited by Civil: Dec 15 2006, 05:26 PM

recently i heard my uncle ( which is also an insurance manager) saying that, his client is withdrawing money for their children's further education...

the money withdraw = premium + interest + bonus... which is accumulated all over the years, the effective rate of return is around 5%-8%...

Civil,

If you concentrated on actual benefit to customer as oppose to a "sales pitch", you may convince more people.

To anyone that is MORE educated about personal finance, you will know all those numbers are meaningless.

1) Investment return are judged base on risk adjusted return. For example, FD is risk free return at 3.7% to 4%. And, it is considered to be riskless. For a bumi, he/she can invest on ASB and get about 8% to 9% return with a bit higher risk than FD. So, it is pointless for a bumi to invest on anything else other than ASB.

2) To judge a return is good or not, it has to be judged against a benchmark. In USA, people use S&P 500. Let's assume we use KLSE composite index. If the index went up 12% to 15% per year over the period and your stock unit trust is doing much much less than that, your unit trust is NOT doing well.

Dreamer

Erm. I can't actually answer u that.. Maybe they think in their mind.. but din type it out? Hmmm... anyway.. Most financial planner did that... and advise customer to do that.. rules of thumbs.. as i said... 3 to 6 months is the best..

Hmm .. and for those who always compare investment with insurans.. That are 2 different thing ok... U cannot compare orange with apple.. Investment link product did contain some investment part.. But just remember.. Any product of insurance.. Protection come first... Investment is just an extra thing towards insurans.. Which CLAIMS that... will yield more return compare to traditional policy. So don't compare INVESTMENT with INSURANS pls... One KEY thing that investment don't have but insurance have is PROTECTION.. Always stress on protection when buying insurance.. Any extra riders that should be added, add it. Don't stress on return when buying insurance. For example, you bought an insurance policy, u paid lets say 2400 a year. That makes 48000 for 20 years right? After 20 years when u surrender your policy, u get 48000 back.. Without any interest. I know that you guys must be thinking that you guys is losing money. But come to think about it. You only use the interest to buy such a big protection. Aren't it worth it? Peace of mind for 20 years.. And also... LIVE LONGER.. LOL..

Life insurance is like having an umbrella. When it rains, the umbrella comes in most useful. But many times when it is not raining, we like to compare whose umbrella handle is more stylish or whether one fabric is more colourful than another. The bottom line, of course, is whether the umbrella is available when the rain begins to pour.

Like ohayogozaimas said, its for a peace of mind. "Death comes everyday to someone and someday to everyone" When a person has made adequate preparation for a foreseeable event in the future,he/she has a sense of peace with himself/herself and peace within himself/herself.

There are people who prefer to worry. Or worse still, take a risk. To be uninsured is the greatest gamble you can take. And its a particurlarly tragic one, for if you lose, its not you but your loved ones who lose"

Why worry when you can insure? In fact, why worry when for a small regular sum ,you can let the insurance company do the worrying for you?

This post has been edited by Civil: Dec 17 2006, 01:38 PM

nice talk.. are u a insurance company agent too? i sure this can convinve many ppl buy insurants. haha.. no doubt dat insurance got a lot of benefit.... is worth a buy if u doesnt hv financial problem... just my 2 cents...

This post has been edited by Lover: Dec 18 2006, 11:05 AM

no one can doubt that insurance is very important, but it can be costly.... so, one's shud noe wat they are buying....

nowadays got too many types of insurance, i would suggest, get bc to the traditional ways, unless u r too bz to manage ur financial, then jus get thsoe wit , ssving, investemnt... etc.... jus my 2 cents....

i had 2 medical and 1 life coverage for a few years and it was enough to drain all the money out of me.

at some point in time, i was unemployed for almost a year and it really took its toll on me, paying all those monthly and annual premiums.

finally sanity prevailed and i cancelled all the policies. i am really running around unprotected ( and aware of it ).

just agree with dreamer101 on the following

1. most people spend too much on insurance and make it the sole form of savings they have. in an downturn, they may have to give it up / surrender the value and lose a sizeable portion of their premiums paid up to date.

2. most people including myself bought insurance but no money to spend on parents which i think about it, i am ashamed. it would be nice to have insurance but priority should be giving your parents some spending money when they are still alive, not when you are dead.

3. i am still alive, and working to rebuild an emergency fund of 6 mths living expenses, then only investment and insurance for me.

2 Medical policies
Having two or more medical policies is really useless. One is enough.

If you bought an ILP policy. This will not happen. You can opt for "premium pause" or use your part of your investment portion in the policy to cover up the insurance charges.



I also strongly suggest that you save up to 6 month of your living expenses for emergency. What you can do for now is try to insured your self at least RM30-RM50 a month. This could at least cover up incase of rainy days

This post has been edited by Civil: Dec 18 2006, 06:18 PM

When I first started working my boss advised me to buy personal life insurance. He said it is the first thing you need to invest even if your company is covering you with health insurance. Nowadays medical, surgical and hospitalisation fees is sky high.

If you have somemore extra money, he said you should invest in fixed deposits and if you have somemore extra money, trust funds. I know today the fixed deposits rate is pathetic but it will be handy in the event of emergency.

The last investment should be shares. He advised that never take money out from your insurance, FD, EPF or trust funds to invest in shares. You only invest in shares if you really can take the risks and have extra money.

You're boss is right !
All those medical,surgical and hospitalization fees are expensive. Protection comes first.
For investment, its up to individual.

This post has been edited by Civil: Dec 18 2006, 06:35 PM

dreamer : kudos to u for yr explanation. it makes makes to consider loooking at my insurance n whether i over buy it or not.

oucheev,

Your boss is either stupid or an insurance agent.

1) Anybody with any kind of common sense on personal finance will tell you that you need to save up 3 to 6 months of expenses or income before you invest on anything.

2) Personal life insurance is NOT an investment.

<<Nowadays medical, surgical and hospitalisation fees is sky high. >>

3) Which is NOT covered by life insurance.

Dreamer

Civil,

<< I also strongly suggest that you save up to 6 month of your living expenses for emergency.>>

<<You're boss is right ! >>

1) You have just contradicted yourself. If you agreed that emergency fund is important, then, how can you agree with someone that he/she buy life insurance before saving any money for emergency fund?

2) Especially for someone that has medical insurance protection to begin with.

Think/service your customer as opposed to always thinking ONLY of selling more insurance.

Young people are more likely to be unemployed than sick or injured seriously.

Dreamer

i felt sorry for you upon reading this, certainly no one has explained to you the concept of affordability that time....

INSURANCE IS THE BEST EVER LOVE LETTER WRITTEN BY A HUSBAND/FATHER TO A WIFE/MOTHER

Must be another insurance agent that do not know how to service their customer properly.

Dreamer