apparently new from AXA: http://www.axa.com.my/851/en/Health-Insura...tionalExclusive i will try to get terms and conditions and most importantly premium shedule. looks like we finally (!!) have a real health insurance plan available in malaysia

Total premium paid = Rm2, 017 x 20 years = Rm 40, 340

Total cash value after 20 years = Rm 55, 298

Return of Investment = Rm55, 298 - Rm 40, 340 = Rm14, 958

Return of Investment Percentage = 37.08%

Simple Annualised Return of Investment Percentage = 37.08% / 20 years = 1.854% per annum

Yes, 2.92% annualised return i.e. IRR.

Use this as guide for IRR calculation:

You are right, 2.92% of the Internal Rate of Return. Is the 55298 is the cash value/surrender value or the maturity benefit?

Simple rate of return does not take into account the timing of cash flows i.e. the concept of "time value of money" - RM100 received today is more valuable than RM100 received next year. It just takes

TOTAL PROFIT / TIME

Internal Rate of Return (IRR) takes into account the timing of cash flows, it is a more fair measure with which to compare the viability/profitability of different investments.

The compounding affects had been included in your cash value of RM 55,298, no? See Pink Spider's explanation, both can be use to gauge but one is more fair.

Try to compare maturity benefit, usually it yield 3-4% IRR.

If you are looking at pure investment, you are advised to ask the sifus at the investment thread, not insurance thread. Insurance comes with insurance charges and is for protection and it is not pure investment.

It is mind boggling the amount of people still fall into the trap of insurance for savings, especially at banks and worst still, they do not even know how to calculate the returns nor bother to ask in more detail before ink on the dotted line. Insurance is for PROTECTION and NOT investment.

Never ever think of claiming from insurance (unless there is an unfortunate event like lost of life/CI/disability/medical/accident), as anything that the insurer say will pay EASILY the insurance charges will be high, maybe not now, but later.

An example is the hospital income, which has been abused to the point that insurer had no choice but to increase the premium. Ever heard of this line, "Duduk Wad Pun Dapat Duit?"

Contrary to popular belief there are no such thing as FREE things from insurance. Anything that is 'free' is already build in with insurance charges. The better the benefits the more charges you are expected to pay.

The higher the insurance charges is, the policy may not be able to be sustain at older age.

They mean slightly different thing but the essence is the same

No, the meaning/application is different, but the calculation is the same, why u get different???

Salah la bos

1. Beginning value: $40,340 is already salah. U pay $X amount every year for 20 years, 20 x $X = $40,340. As such, rightfully your beginning value is "0".
2. CAGR if I'm not wrong, is only applicable where u pay $X LUMP SUM at the beginning, and let the amount grow over a period. E.g. u invest RM500,000 in a piece of land and let the value of the land grow over 20 years.

When u have periodic cash flow and a maturity amount, IRR is the correct measure to use.