Traditionally, insurance are meant for protection and not a good saving mechanism. But in a not so far past, policy repackaging by insurance companies had make it look like a saving tool by combination of bond, equity investment a.k.a some sort of unit trust. So which insurance is better for saving?? No exact answer for that, it's just like UT. Looking at past performance might help abit.

savings with insurance gives higher benefits compared with bank and gives you a commitment. Rm100 a month and for the next 40 years would add up to quite a lot. I guess it isn't so bad.
Insurance now isn't insurance alone. They have saving plans to help ppl save up.

Did you read my post regarding commitments??
So what is your comment on that?

Insurance companies had been offering saving plans for the last decade..
But considering their return, it's very disappointing..
I think the plan by ING was 30% ROI after 7 years of savings..?
That translates into 4.3% pa, which is disappointing IMO..
Your money can be worth elsewhere..
I would recommend unit trust with DDI (regular savings), it functions the same too..
At least in unit trust, your money is not tied down, whereas your money in the insurance product is locked in..

This post has been edited by Jordy: Oct 4 2007, 04:00 PM

after all reading all posts replying to my questions , i seriously doubt the posters understanding about insurance especially about the saving and commitment part.

1. Insurance back to basic is for protection , u take it bcoz u want protection at the 1st place.
2. Forced saving is NOT u r forced to save by a policy / company, it is u force urself to save b4 everything else.
3. Taking up a saving plan mean u r committed to save up to a certain time period , min 10yrs i would say to get reasonable return, in between if u need emergency withdrawal , u lose money.
4. Return in insurance plan is only on par with UT (if) when ur policy at least reach policy year with terminal bonus &/@ maturity date.
5. Talk only about saving plan /tool/vehicles only when u hav got ur 6months emergency cash in hand and basic protection covered at sufficient amount. Insurance agent who sell u savings plan b4 protection plan is eyeing more on commission than ur benefit. Even u say u want saving, an agent should always make sure ur protection is sufficient 1st.

well said by yewkhuay.
A lot of consumers had fallen prey to the sweet talks and persuasion of agents on "force" savings.
Thus I mentioned you can basically choose that options for shorter tenor but don't commit yourself long term unless you are really financial stable and had good financial planning.
Don't want anyone to loose out in their insurance coverage and savings at the same time.

insurance saving plan or endowment plan less than 10/13yrs doesn't give good maturity bonus, might as well don get......

i recommend great eastern ....i took a Great junior advantage (GJA) insurance meant for 'kids'....pay premium for 10 yrs and get bonus every year after or if u do not intend to take the bonus, just keep it and get a lump sump when u surrender

tht would be one of the good choice oso with an actual return of upto 5.8%/yr.....

Dear b00n,

In order to really understand the real implications of not being able to afford paying the RM100 per month, we would have to think deeper on the most likely possible "out of the blue" scenarios.

1. You got involved in an accident and is TPD, hence cannot work and no income. Bear in mind accidents can happen anywhere anytime, not just on the road accidents, you could just be happily bathing at home, stepped on a soap bar, knock your head and end up in a coma.
2. You are diagnosed with critical illness, hence cannot work and no income.
3. You lose your job temporary due to recession, hence no income temporarily, but still can find other jobs but with lower income.
4. You spend all your money lavishly and end up with loads of debts and not being able to support your insurance premiums.

These are the 4 that I can think of, if you have more do contribute.

In case of scenario 1 and 2, the biggest worry is that how are you gonna support yourself and your dependents. How much money would you require to continue living? Would 100k be sufficient? 200k? 300k? That will depend on each individual, but most often than not, they will not have enough. So where would the money come from? Definitely not from the 20k+ total Unit Trust you have saved for the past 10 years, assuming you put in RM100 a month with 9% average returns annually.

In scenario 3, losing a job is only a temporary setback compared to scenario 1 and 2. So you might not be able to pay the insurance premium temporarily until you find a new job, but you Definitely Would Not Lose Everything.

Nowadays there's a new type of customer friendly savings plans that comes with a 10 years no lapsed period as well as min guaranteed returns. Meaning if you are not able to pay for your usual premium, the policy would still continue to protect you even if your Cash Value is insufficient to pay for the policy charges. Once you're able to earn some income, you can continue saving where you left off, even if its after 1 or 2 years.

For example you have paid premium for the first 2-3 years, and stop payment, you policy will continue to be inforced for the next 7 years until the 10th year is up, even if you dont pay a single cent. Whereas normally it would have lasped by the 4th or 5th yr as your cash value would be insufficien to support the policy.

For scenario no 4, you'd be surprise how often this happens. Even with the best saving plan and the best financial products available, there is no cure if you spend more than what you earn.


So in conclusion, you would not be forced to pay the exact premium amount and you would not have the risk of losing both protection and all your hard earn savings.

The financial industry is evolving day to day, as more and more consumers demand for better financial solutions, top financial institutions are stepping up to the task to provide the best overall customer focused solutions.

But, there is only a handful of us and so many people out there who are unaware of the changes. But if consumers are willing to open up their eyes and ears a bit, we'll be more than willing to share.

Thanks, Best Regards.

Zarth,

Let's breakdown the scenerio one by one.

1: There is more than one way for people to be disabled than it is cover by TPD insurance. If you got in an accident, you are cover by personal accident insurance which can perform the same function as TPD by accident and it is a lot cheaper.

2: Which is probably not cover by TPD insurance. And, if you have critical illness insurance and it only pays to the hospital.

3: In a serious recession which typically happen in Malaysia every 10 years, you cannot find job and have NO INCOME for a few months and up to a year.

4: Which the person should not buy insurance and waste money on insurance commission to begin with.

It is safer to save that RM100 in bank versus insurance. And, roll the money into FD whenever it reaches RM1,000. A person should not talk about savings via insurance or investment until they have 3 to 6 months of expense in bank as emergency fund.

Dreamer



This post has been edited by dreamer101: Oct 4 2007, 08:56 PM

I guess dreamer had provided the answer.

I'm not against insurance.
But I just want to advise on correct insurance coverage.
The risk of policy elapsing is most of the time the insurance premium that one committed is too high without him realising earlier. Isn't that the usual case since you're in the insurance field.
Again, when the time comes, the guy would be loosing both like I said.
Instead of loosing both, if he had "forced" himself to help save in conventional method; he could still opt to continue to pay for an insurance coverage of a lesser premium, by cutting a monthly "forced save" from example RM100 to RM50 instead to help subsidise for his own insurance coverage.

Long term savings objectives are for retirement purpose.

Insurance savings is always for long term purpose. Since you probably be paying for the next 20 years, therefore, your monthly commitment cannot be high.

It is not easy to maintain your saving discipline with FD. You may save a few years but once the saving amount is big, you may be tempted to withdraw it for other purpose. Therefore, your objective is defeated. So, FD is for short term saving.

hmm
I understand insurance and I understand savings.
I also have enough for 3 - 6 months downtime the reason why I'm actually asking. Rm100 a month is not much for savings. If it gives you better benefits than putting in a bank of which money value drops and interest rate is super low, why not consider an insurance / savings whatsoever? I don't believe in unit trusts as my cousin had unit trusts and had no returns. Don't see the advantages in it at all.

there are so many funds in the market, ur cousin suffer no return , the problem is not with UT, is with his entry into UT n the fund he selected.
insurance saving is indeed one of the way of good saving , but it is only when u r looking at >15yrs of saving plan. other wise, read up n study abit about UT, understand how the fund strategize n where it invest, choose one to invest , i can;t talk much on it coz i havent got my hands on it yet oso.

xcutelilgal,

Pardon me. I do not think you know the savings scheme in insurance. In a lot of cases, the return is worse than FD with a lot less flexibility. You NEVER really calculate and do a full comparison. Or else, you will not makes this statement.

<<it gives you better benefits than putting in a bank of which money value drops and interest rate is super low, >>

Which applies to saving scheme in insurance too. In fact, the return rate in insurance is fixed while FD can be renewed annually. on the situation where interest is going up, FD will return more than the saving scheme.

Dreamer

Don't just judge a basket of golden eggs with just one rotten egg..
Human has this wrong perception that "if one is bad, the others must be bad"..
I made an investment recently and within the timeframe of 2 months, my return on 2 of the funds are 15% each, with another fund at 6%..
It depends on the market situation and the trend, might be that your cousin invested in the wrong sector, or he hasn't accounted the distributions/splits in his profit calculation..
There's a lot to learn for you, you still look blur and judging investments that you don't understand by what others comment which is premature..
Just a simple question if you understand insurance, what is the annualized return that your intended insurance promised after the tenure..? Does it beat inflation in your opinion..?

i aggreed insurance not really in savings but in term of protection is Yes.....
insurance got small & big protection....u invest lesser than u gain or protect lesser....my comments is good that at least u have the Rm100....try to listen more insurance agent from other company & policyyss...i know there is a policy that u paid 13 years then no need to pay....u will get guranteed 6% annually till u away of this world somehow u can get protection(add on critical illness -36 disease) or if u away of the world on the spot u paid one lum sum....the good thing of this policy is if u buy for ur baby...u can get 3 generation....
for further info....i got from manulife insurance...u can try check it out....or if really interested can pm me....

Are you manulife agent..?
What is the package called..?
Any source for reference..?

1.) Nope im not...my father is.... which service in insurance for 15 years..
2.) Manuincome plan
3.) go website www.manulife.com.my (search under saving & investment)...