Hi xcutelil,

Just sent you a pm.

Thanks.

This post has been edited by Zarth: Oct 4 2007, 03:25 AM

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.

Dear Dreamer,

1. Not all cases of TPD is covered under personal accidents policies and not all TPDs are solely due to accidents. It is true that PA policies are cheaper, hence you should make sure you have sufficient on both type of policies.

2. Critical Illnesses can result in someone being TPD hence, yes they do pay you if you suffer TPD due to Critical Illnesses, in which personal accident policy does not cover. Wouldn't it be a blessing already if you do not have to fork out money to pay the Hospital Bills, should you not have a Medical Card? How are you gonna even pay for the treatment let alone survive for the rest of your life?

3. Yes, hence newer plans comes with more flexibility. Refer to the 10 year no lasped feature I explained earlier. During the last downturn, where many business owners suffer from insufficient cash flow and banks do not want to lend them money at all, where can they turn to keep thier business alive? Yes, they actually turn to the insurance companies, which can allow you to loan out funds to keep your business alive if you have some cash value inside the policy.

4. You're talking about human nature here. There is no 'Oh If I knew earlier, I would have done this/that' when its already been done. Many prudent savers whom have very good discipline, do over spend sometimes because they just had to. Its a Human nature part of wanting something which takes over you for the short period. Can anyone tell me that they have never ever overspent on something they dont need and regret about it later? If you do end up in such a situation when you're in a debt hole, the cash value inside your policy can actually be a life saver.

Can you guarantee that nothing would happen to you while you're trying to create your 3-6 months emergency fund? Some would take 1 year, most 2-3 years, or some even 5 years if they have lots of commitments. Insurance saving plans can work out both as a emergency fund saver, because the cash value can be withdrawn for smaller emergencies, while the protection part would help in those larger than normal emergencies such at scenario 1 and 2 above.

At the end of the day, no matter what people tell you or share with you, it is still up to your own choice to decide. Are the risk of life worth taking it for granted? If you have a choice, would you try to minimise all the posibilities of such occurences happening before it actually Happens? Or would you just wait and see and if you're lucky enough for it to not happen to you or when it actually does, then you can see how bad it is. If lucky then can restart the game, if not then its game over. =)

So which way do you think putting your RM100 into is safer? The Bank or with Insurance? No rights, no wrongs, just a choice different people make in thier different ways of life.

Dear Dreamer,

To know how much is the financial risk of young people getting sick, just refer to any hospitals and they will tell you they have patients ranging from babies to 90 year olds.

True it may not be the greatest risks, but is it still not a risk? Hence the reason why all insurance premiums are calculated based on the certain risk levels of individuals at the different stages in thier life. There's a reason why its so much cheaper to buy when you're young compared to when you're older, because the risk is much lower.

How expensive can it be to be paying RM30 a month if you're aged between 11-35 (young category) and be able to get over RM60,000 coverage on medical bills a year should you be hospitalised? How much does a simple operation cost nowadays? 10k? 30k? 50k?

How many agents have you met so far? Have you met me before? Have you ever seriously bought from those agent that tell you to buy as much insurance as possible?

We're not playing with any of the consumers out there, we're just doing our job, that is to help them plan before such occurences happen. We don't mind being the bad guys, to show the them the ugly parts of life should something unforeseen occurs, to tell them the things they do not want to hear happen to them and thier loved ones. However, the choice, the reasoning, the common sense is still within thier control. We don't brainwash them into a insurance buying machine and we definitely can't force them to say yes, and only yes. As a matter of fact most of the time people will say No, No and No. But we still go on doing our jobs, until someone whom think they it would actually benefit them, say yes.

We're just here to share with them what others whom are just like any normal person, which never ever thought that it could happen to them, actually happened to them, together with the statistics to back it up. No one person can predict the future, so why bear all the possible risk when there is a way to minimise it at a fraction of the cost?

Just pay RM30 a month to cover the smaller hospitalization risk with a Medical Card, add another RM100 to cover the Life/TPD risk, another RM50 for Critical Illness and another RM20 for the Personal Accident. Better still if you get all the coverage packaged together you'll be paying discounted rate of RM150, instead of RM200. In the mean time you'll have some cash value in the policy which can be withdrawn as one part of your emergency fund when needed and should nothing happen to you for at the end of 15-20 years period, you'll be getting back all the sum you've paid plus the interest earned over the years. Should you want to continue the premium is fixed leveled all the way up to age 100.

Is it that complicated? It is that difficult to decide? Life is short, so keep it simple and you'll be able to enjoy the greater things in life. Don't spend time worrying about what's gonna happen and what's not, let us worry it for you.

Dear Dreamer,

Nope there is no 100% guarantee, but I'd say up to 90% of daily occurences can be covered. I can also tell you that for every 17 minutes, someone who buys life insurance will not live to pay the second premium.

Exactly the main reason why insurance exists in the first place. Because there's no 100% guarantee to life. But if you can cover up to 90%, would you prefer 70%? 50%? Your choice. Can you imagine if insurance does not exists at all and everyone has to fend for thier ownself against financial distresses that happen daily?

Hence its important to cover all the possible loopholes, you can never cover 100% but 90% is still better than 0%.

Again, I would like to stress on what are the possible "out of the blue" or "any kind of" emergencies scenarios that could occur in my earlier post. Do contribute if there is any other possible important scenarios?

What are the bigger emergencies? How much money do you require for those smaller emergencies? Does it make sense to allow insurance to cover the 90%, while you can still set aside money into FD to cover the balance 10%?



A) The problem is Accidents/Deaths/TPDs/Critical Illness/Hospitalization can come at any one time in our lives, be it young/old/boy/girl/rich/poor.

There is no way to show the exact future predictability table that it is more likely to happen to someone compared to the other.

Hence, the only thing you can rely on is past history, statistics, which is exactly what actuarist used to determine the premiums.

But as we all know past history does not always indicate the future. Therefore, premiums are constantly revised based on the latest statistics & trends.

So the very likely to happen factor is already reflected in differences in the premium you're paying.


B) Yes exactly.

What events? Can't think of more than 5? No worries, let me show you, and I'll tell you as many significant events leading to financial ruins as I have experienced, heard and seen others go through. Most significant ones being similar to point A.

C) How low can you price your product to make sure there's enough profitability and still be able to keep the stakeholders happy while having to survive the ups and downs of the economy?

Which business runs at a constant lost?

What matters more when point A actually occurs?

The lowest priced product out there in the market?

Or the actual slighly higher prices policy which you bought last 2 years because someone actually took the time to explain and show you the features and benefits.

What you want in life, is your decison and yours alone to make. We're only here to be the planners/advisors.

If you don't feel comfortable then don't buy, but for the each 3700 over new policy holders each day, you can be sure to trust us that we're here to deliver you the cheque should the 90% of significant events befall you.

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Added on October 6, 2007, 5:47 pmNewer plans comes with cash value in the first year itself.

If you buy Term, hence no cash value, hence no 'savings' for you to withdraw from.

Again "out of the blue", "any kind of emergencies", " in dire needs" what are those scenarios? List them all down. PM me and I'll be glad to share it with you personally.

How much would you require? Eg. Would RM100 a month into FD for the next 10 years be enough to cover a RM30k hospital bill? Can you predict when it would happen? 1 month, 6 months after you put in FD? or during the middle, say 5 years or right just when the FD reach RM30k, Ding! You hit jackpot! Back to RM0 again.

With insurance, you will get your cash value on top of the coverage.

You will get back your capital + dividend earned, just that the lock period is longer.

Are we talking about investment now? Yes, there is ample investment products out there in the market, just post up a thread saying you have RM100k, where should I invest? and I'm sure fellow forumers will give you all thier input from Props to UT to Shares to Forex to Genting to 4D to now they have Mega 6/52 etc etc...

Human behaviour is very simple, say if you put RM100 monthly into your FD and there is no penalty at all should you stop saving or they might just wanna take it all out, other than losing that bit of interest, they would not hesitate to do it. Nothing much to lose what? Capital still there.

But on the other hand, if they put it in insurance, and you tell them oh, sorry but you'll be losing money if you stop saving or if you surrender early, how would you think they would react? Har? Lose capital ar? Nvm le, try continue lo, my new Sony Ericsson K850i can wait I guess.

Discipline or no dicipline, when there is a force stronger than your desire holding you back, especially fear of losing money. You would think twice.

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Added on October 6, 2007, 6:12 pmDear Jordy,

That's actually the opposite, if you're filthy rich, you don't even actually need much insurance, just self insure yourself.

But for some rich folks it all about wealth preservation, they buy all the possible insurance with emphasis that if nothing happens to them they get back all returns + dividend.

Should they not survive and decide to go Happy Land early, they can still pass on the proceeds to thier heirs making them even more filthier and richer. This is thier way of leaving a legacy so that thier great grandchildren can say, "I dont really know my great grandfather at all, but I can remember his name clearly, because its written in big bold letters on a piece of paper, together along with the cheque starting with a 1 figure and followed by a long number of 0s he left me when I attained age 21. He must be a Really Cool Great Grandpa!".

This post has been edited by Zarth: Oct 6 2007, 06:12 PM