Why the hell you want to pay ADDITIONAL insurance agent commission to buy unit trust when you can do it yourself? That is essentially what you are doing when you buy investment linked insurance.

Dreamer

This post has been edited by dreamer101: Dec 6 2006, 11:50 AM

B.S.

You could hire the SAME fund manager and buy the SAME unit trust without paying ADDITIONAL commission to the insurance agent.

<<A little reward??>>

LOL. Do you have any idea how much commission you are paying for this? As I have always tell people, if you are good in selling, you should sell INSURANCE. You could get RICH from insurance commission.

Dreamer

I have no idea what article you are talking about. But, there are MORE people getting rich selling life insurance than unit trust. For investment linked insurance, you have NO idea how much of your premium is going towards investment versus insurance and how much is your actual return. It is easier to collect HUGE commission and people are HAPPY to pay it since they have NO IDEA how much they are paying.

Dreamer

Hi,

Do you realize that you have contradicted yourself??

<< Investment-linked products meant for protection purpose >>
<< There are many other better investment products.>>

1) You buy insurance for protection.

2) There are OTHER better investment product than insurance.

So, why am I buying an investment linked insurance that has a lousy investment component in it?? The answer should be you should buy a PURE insurance with NO investment.

But, the problem in Malaysia is that you cannot get PURE term life insurance or the premium is so high that you have have to buy term life insurace combined with something else.

Dreamer

If you do know, give us an example of an investment linked insurance versus term life insurance plus unit trust. And, show us the exact return.

Be honest.

Dreamer

My simple guide to life insurance

Life insurance is an insurance. It is used to protect against of the
risk of lost of income. For example, let's say A is the bread winner
of the family. If something happen to A ( for example die in an
accident), you will not longer have income from A. The family still
need to survive. Life insurance can provide/replace some portion of
the income so that the family still can survive. In some
circumstances, A will suffer some form of disability and can no longer
work, life insurance provide some compensation to help the family to
survive too. Please noted that in Malaysia, the protection against
disability is limited to what is specified in the policy. In advanced
countries like USA, they have disability insurance that pays as long
as you cannot work regardless whatever the cause is. This kind of
disability insurance does not exist in Malaysia. In summary, life
insurance is used to protect against the loss of income and
disability.

So, does life insurance makes sense to you??

1) Do you have dependents?
A) If you are single and have no dependent, it really does not make
much sense to buy life insurance.

B) If something happen to me, I would like to leave something for my
parents. Is your parent depend on your income for survival?? If answer
is no, why buy life insurance?? If you want leave something for your
parent, why not give your parent the money now?? Save the money from
insurance premium and give to your parent now every month.

2) If you are home maker and makes no income, why buy life insurance??

3) If you are married and your family depend on you to provide income,
in general, you should buy life insurance.

4) However, it may NOT be worthwhile for you to buy life insurance if
you have a lot of savings (more than 200K). In general, life insurance
in Malaysia get very expensive for payment greater than 200K.

All my comments does not necessary apply to medical insurance. Do your
own research to find out what is right for you. If your insurance
agent cannot explain to you why you should buy life insurance, why are
you buying??

The very complicated and complex thing about insurance in Malaysia is
that we do not have pure term life insurance. All insurance product in
Malaysia is normally a combination of life insurance, disability
protection and medical protection. In most cases, unless your
insurance agent is good and you do a lot of research, you really have
little or no idea what you are buying. I am not qualify to tell you
what you should buy and how much to buy in each circumstances.

The bottom line is you need to know is

1) what are you protect against??
Life, disability, medical

2) What is the likelihood for each risk at your age??

3) What is the cost for each option??

4) What is the maximum pay and deductible in each situation??

Insurance is used to protect against the situation where you do not
have enough resources to cover. You need to buy just enough so that
when the bad thing happen, you are covered. Buy, you should NOT buy
so much that it costs too much to you.

Dreamer

Eunose Roadster,

<<But what if someone suffers from permanent disability.>>

1) Read the fine print. Malaysia's life insurance DO NOT protect against permanent disability. It protects certain kind of disability as specified in the insurance. It does NOT protect against all kinds of permanent disabilities as in USA.

2) In USA, you get pay as long as you CANNOT work as per disability insurance. In Malaysia, you have to lose an arm or leg or more.

<<The ideal portion for your premium is 10% from your fix income.The most is 13%>>

2) Wrong answer!!!

A) You buy based insurance based on how much is you monthly expenses.

B) Either case, you are buying too much insurance if your monthly premium is any where close to 10% of your income.

<<Insurance purpose is applicable whether you are dependent or not.>>

3) Since Malaysia insurance DOES NOT protect against disability, your argument that you buy insurance to protect against disability even though you have NO dependent is pointless.

Dreamer

1) You are using Australian definition of permanent disability to apply against Malaysia insurance. How smart is that??

2) Read the fine print on Malaysia protection under disability. You will find that IT IS NOT what you believe to be true so far.


[ <<The ideal portion for your premium is 10% from your fix income.The most is 13%>>
For me 10% is the good starting point when purchasing insurance.
Coverage is based on our income, not expenses. I never heard people make a presentation to prospective customer refer Insurance as "Expenses Protection" but "Income Protection" ]

3) If you are an insurance agent, you get pay MORE commission if you get your customer to buy MORE insurance. So, why do you want to convince your customer to spend less??

4) One of the trick to do this is to sell insurance based on income which DOES NOT make sense. Let's give you a simple example,

A's family lived on 25% of his income. 25% of his income goes to tax. And, he saves 50% of his income. So, if he dies, how much does he needs to maintain his family??

The answer should be 25% of his income = expense.

But, if I can convince you that you need 100% of income, you will buy more insurance and I collect more commission.

Have ever seen a salesperson to ask you to spend less money??

5) If you are spending 10% of your income on insurance premium, you are buying too MUCH insurance.

Dreamer

Then, why don't you just say it? Explain completely why you choose to buy a particular insurance. It may help someone to make his/her decision.

Say what you mean and mean what you say.

Dreamer

<< Oh btw don't ask us to provide an exact return.>>

Sound exactly like an insurance agent. You want to sell something. You tell people that it is GOOD investment. But, do not ask for the EXACT return.

When a person buy a car with leather seat, he/she see the leather and he/she can touch the leather. But, when a person buy an investment linked insurance, people cannot tell him/her what exactly he/she is buying and how much he/she is paying for the option. Why?

I have problem with BAD insurance agent. People selling insurance with NO IDEA what they are selling. And, selling a lot more insurance to people that do not need it. People DO NEED certain amount of insurance and deserve good service from insurance agent.

And, of course, people deserve this to certain extent. They buy/spend a lot of money on insurance and have no idea what they are buying. Isn't it so stupid to spend so much money on something (insurance) but you have no idea what you are buying and getting.

But, this is so common in financial world. It is NOT in anyone's interest to have SMART and EDUCATED customers. It is harder to make money with SMART customers.

Dreamer

<< If you salary is 30k annually, in 10 years (provided no incremental) u will hav work ur way to 300k. If you cannot <<work>> tommorrow for the rest of your life, how long do you WANT to survive? How long CAN you survive with ur savings now?>>

In sell, we called this as "bait and switch". In Malaysia, we sell life insurance. It is NOT disability insurance.

1) It does NOT protect against all circumstances where you cannot work

2) It does NOT pay you forever if you do not work. It pays you certain amount of money and that money WILL NOT last you forever

The bottom line is buying life insurance protect against something but it has limitation.

Here we go again. You are just telling people that you need to buy this and that. You DO NOT tell people exactly what it protects and what it does not protect.

For me as an example, I have enough savings to last at least 10 years. I am self insured.

Yes. But, if that investment has higher risk BUT the return is less than FD because of all the fees, why am I buying it??

A higher risk investment need to be at least has higher return than FD or else why bother taking the risk??


Yes, you are correct. But, you could find out about all the fees and exactly how much of your insurance premium is actually invested.

Let use some common sense here.

A) You can buy unit trust directly and you pay commission to unit trust agent.

B) Now, you are buying unit trust from insurance agent and paying commission to both insurance agent and unit trust agent.

Does it takes any critical thinking to realize that you will pay MORE fee in (A) or (B)?? This is what you are doing when you buy investment linked insurance.

Dreamer

<< there IS disability insurance>>

Show me the web site and the product information. Then, I can tell you why it is NOT a disability insurance.

Dreamer

Bingo. That is the whole point of my argument. People are persuaded by insurance agents that they can use insurance as saving and investment scheme. Then, they buy a lot more insurance than they need. Plus, they have no idea how much fees that they are paying for the additional savings and investment option. In a lot of cases, the return is MUCH MUCH less than FD.

They should have buy less insurance and put the money in FD instead.

People who have buy insurance with 10% of their income is definitely buying TOO MUCH insurance.

Dreamer

1) Why are you paying insurance agent commission to keep 30% of your money every month??

2) Do you know how much fee that you are paying for doing that??

3) Have you compare how much return that you will have if you just keep 30% of that money and put in FD instead?

4) Do you know how to do that kind of calculation??

Insurance agents are laughing their way to bank for helping you to save your money.

Dreamer

1) My statements applies to whole life policy too. The guaranteed return in most cases is less than FD.

2) BTW, I used to be a sales manager. I just choose to be honest in telling my customer on exactly what they are buying. And, I was successful in selling with integrity.

Dreamer

P.S.: The problem is NOT in selling. You are an insurance agent. Your goal is to sell as much insurance as possible and collect HUGE commission. If someone is STUPID enough to buy too much insurance and giving money freely to you, they deserve whatever they are getting.

It is NOT in your best interest to educate your customer on how to buy RIGHT amount of insurance.

This post has been edited by dreamer101: Dec 8 2006, 04:48 AM

Is this the BEST that you can do?? You have NO information or data to prove that my calculation and assumption is WRONG?

I am waiting for you to show a REAL example where whole life insurance is good deal.

I am so disappointed!!!

Dreamer

You can choose to earn an honest living and actually provide a service to your customer or just sell to your customer. The key word here is "service". And, to service your customer, you need to know your product aka insurance. You need to know when someone need to buy which kind of products.

1) Tax rate in Malaysia is so low that unless you earn very high salary, it is NOT a factor.

2) Rich business person has very good accountant and they hardly pay any tax.



<< So what is your main concern when purchasing Insurance. The return or the benefits? Do you set any target to enjoy those extras when you are in your 80's?>>

1) You buy insurance ONLY for protection and nothing else. You aim to buy insurance with ZERO return.

2) Let's me explain to you in very simple term. If I come to you and say give me $1,000 and I will keep the $500 and put the $500 into FD or Unit Trust, I will return the earning from the $500 after 20 years to you. And, we will do this every month or every year.

If you have any kind of common sense, you will cal me crazy and ask why the hell do I want to do that?? Why don't I invest/save the $1000 myself??

This is what essentially you are doing for whole life insurance or any insurance with return.

3) The problem in Malaysia is that due to lack of competition in Malaysia, you CANNOT buy term life insurance: life insurance with ZERO return. The only thing you can do is buy life insurance with as little return/surrender value as possible.

<< THERE ARE HONEST AGENT OUT THERE.>>

4) There are a lot of insurance agents that do not know insurance. They may be honest but they still could not help you.

<< And one more thing! The commission that they earn is not easy as you think and it won't last forever.>>

5) When you can sell something and collect 100+% commission without knowing what the hell you are selling and people willing to buy it without knowing what they are buying, how hard it is?? Tell me what other kind of sell job has higher earning/commission and least amount of work? This is much much better than MLM. You sell the insurance once and you collect commission every year.

<< This is about ethics in selling insurance and it's up to individuals either to practice it or not. You have to admit even some sales personnel in your previous sales industry fails to obey the code of ethics. >>

6) The bottom line is very simple. If you are NOT smart customer, you can be conned. So, either learn how to shop for insurance or be prepare to lose a lot of money in unnecessary insurance or too little protection.

7) This is the same as everything else. You spend a lot of time shopping for car and house because it is a a large purchase and it is a lot of money. To a lot of Malaysians, insurance is a very large purchase but they do it carelessly and they deserve to lose a lot of money.

<< Total and Permanent Disability Benefits where it pays only on certain condition. >>

A REAL and COMPLETE disability insurance have two conditions:

1) It pays you a monthly income FOREVER as long as you are disabled.

2) It pays as long as you CANNOT work for whatever reason.

Malaysia DO NOT have insurance that satisfy BOTH conditions.

Dreamer

Show me the company web site and the detail of the insurance. And, I will show you why you are WRONG. Or, you would have proven that I am WRONG. Let's do it in the open.

I want to be wrong. If low cost TERM life insurance exist in Malaysia, it would be a good deal for many people in Malaysia.

Dreamer

This post has been edited by dreamer101: Dec 8 2006, 11:55 PM

PMed me your company name and insurance detail. I promise you a fair study/research.

That is why I say GOOD accountant. With GOOD accountant, you can deduct your tax legally if you are running a business. There is NOTHING that a tax collector can do to you if it is done LEGALLY.

Dreamer

Hi,

1) Tax rate in Malaysia is so low that unless you earn very high SALARY, it is NOT a factor.

2) Rich BUSINESS person has very good accountant and they hardly pay any tax. Their earning ARE NOT converted into taxable income.

I do agree with you that some people with high SALARY may pay a lot of tax. But, for those people, the insurance needs to pay around 1 million or more or it is NOT worthwhile to buy insurance. The premium for life insurance that pay more than 200K is so high that it is NOT worth the tax savings.

Dreamer