ok. i am 25 yr old.

my friend apporach me to invest in ING investment link plan. This plan include the insurance plus the investment.

She say, pay RM150 per month, you will have the coverage of
100,000 - life insurance,
100,000 - pa,
100,000 - diagnosis major illnesses.
10,000 - total & permanent disability.

then some investment income.

the first 7 yr will be partial insurance and investment, the 8th yr, all you money will go to investment. then, u can get back more money after 7 yrs, of course the investment is perform good at the first place.

They offer min 2-9% of return.

what to yo think?

my case is, if accept the offer, rm150 + rm50 (medical card). Do i over-insured?

insurance policies with "investment benefits" are most of the time, bullshit.

when the time comes u wanna get the money, they will tell u all sorts of cock n bull stories.

yes, it is true. But currently, i will having the medical card only. should not be enough.

I ask her that, if i wan the PA only, one yr is about RM700.

then i add RM1100 more, then i have more coverage and some return.

100,000 - life insurance,
100,000 - pa,
100,000 - diagnosis major illnesses.
10,000 - total & permanent disability.

are you married btw?
if you are single, i suggest maybe you can reduce
amount issured for life & major illness to around 30K-50K each
while on the other hand get a much better medical card
as we know medical expenses is gettting higher each day

to check over-insure you will need to provide info like,

how much is your salary,
how many dependants do you have,
what is your day to day activties and
what are your worries right now if any.

in principal, if this is your 1st big life policy, then you should consider a whole life plan, term life or an endowment. it provides a more consistent pay back bonus while the assurance is guaranteed.

while unit link products also provides the same protection but there is a risk if the fund does not perform well ( loose money ) then the amount you lost may eat into the protection part, fee etc ... troublesome stuff ... if it does not eat into your protection part then it plan cannot repay itself and lapse, and usually you only find out when you want to claim it ....

so even though link products is great but for a start, buy a pure insurance product first ... especially when you are not well verse with all the differences.

after said, 100K is really something MINIMUM to start with ... I cannot imagine any 'proper' insurance lower than that. So it is VERY HARD for you to over insure in this case. However, you may over pay for the same protection thao ...

here in I give you some price guidelines ....

for a 100K Life, TPD, Accident and Critical illness protection, pure protection payment starts at RM 500. So if an insurance company offers you RM 800 or more, that is common because the remaining money is used to build your bonus or extra cash benefits. If it has features like you pay 10 years and then stop where the policy pay for itselfs, then you may expect RM 1500 to RM 1800 ( like your plan now ).

on another aspect, to compare the return of a policy, use this as comparison ....

if you pay RM 1,800 for a 100k policy ( as above ), and assume the lowest guarantee return in the market ie. FD 3%, then you should get back AT LEAST ...

15K at 10th year
24K at 15th year
35K at 20th year
62K at 30th year
100k at 40th year

hope this helps a bit ....

in short, I think you should ask your agent to propose you the same plan but as a wholelife plan OR ask for a 15 or 20 years endownment plans which could fit you best ( for now ).

It depends on individual situation, like how much is your income, dependant, nature of work, family situation etc. Everyone is different so the need of insurance is different.

One of the most important issue is the income which determine how much insurance you should get. Insurance agents surely told you this is needed, that is a must to protect, blar blar etc. But if your income (left out after daily life essential) not sufficient to pay up the premium then insurance become a burden rather than protection in this situation.

So only you post some basic information, then only others can give advice. Although advice might be different due to different individual preferences, it can be a good reading or reference what should you look for.

Assume no other external factors, pls plan to buy an insurance plan as young as possible, as the premium is cheaper. Get the longest term possible... 75/85/100 yrs old plan.

My opinion:
PA : buy just enough. 50-200k. When you work, most of the time it is covered 100-500k by company. Also, you can easily purchase more PA later.

Medical: Get sufficient 50-500k, including operation, surgery, follow up treatment, etc. Also, when you work, most co also cover medical from 10k-200k. Remember inflation costs 50 yrs later.

Hospitalisation: Get a plan that covers at least RM200/day. Why ? Include inflation 50 yrs later. RM200 might just get you a general ward. And nowadays, there is a 90-10 policy. Useful when you are old/retire later. Couple of yrs later, policy may change to 80-20. Beware...

An average single/2 bed-room costs RM130+ nowadays in private hospital.

1. my salary is about 2400 - 2700 (after deduct the epf + part time allowance). Hopefully will be increase after march.

My monthly saving is like +-200 (if i pay RM200 for the insurance)

2. of course, i have parent and they are the only person that need my financial help.

3. i am doing programming and company actually but the term life and group pa for me. But i can depend on this.

4. my worries is, i have no money to buy house.

1. i think a plan within RM120-RM150/month with a good medical + hospitalisation will benifit you i guess.

2. Pls remember to ask ur agent to include the PAYOR ( continuous guranteed ) in case
touch wood, anything happen the plan will go on free for life.

3. the life & pa can reduce, because atm you alreaddy have coverage from ur company

4. Dont worry about no money buying a house, as because ur salary wont fix at RM2400 - RM2700
in couple of years i think you should be alright . . .

1. it WILL increase after March, just a matter of how much

RM200 saving is good enough. you should learn to Save First, Use Later. Basically setup a Standing Instruction from your salary bank account and deduct RM 200 to transfer to another bank account that you will not access. This is also called Automatic Millionaire approach.

2. for parent, you should calculate how much they need to substain their life. ie. how much they use every month. multiply by how long they will live, ie. pick 100 yrs old. then that is the Sum Assure you need to buy insurance for.

3. company insurance is not a permanent thing but it is very good before you do not need to buy ALL the insurance yourself. ie. company covers you for 50K sum assured, and you need 100K from #2 calculation, then you can go ahead and buy a 50K insurance. a few months before you quite your current company ( and new company do not give you any insurance), then you will need to buy another 50K insurance ....

4. make a guess when you will buy your house, ie. next year or 3 years later etc. Then set a target ie. 100K, 200K. then understand house purchase process ie. how much downpayment, getting loan etc. then calculate if interest is 3% like FD, how much you need to save. if earning 5-8% interest, how much you need to save etc.

insurance plan, the most important aspect is the total disablement benefits.

let say, u earn RM 3 K. annual means RM 36k.

if one day u are struck down by accident or sickness that cause u cannot work anymore, u going to lose ur monthly income.

get a plan that cover that, for maybe 5 years ?

36K x 5 = ? u can do the calculation.

i notice the disable benefits is like RM 10K. so little. how long u can last with it ?

and the critical illness, there are one condition hidden there usually.

gosh, i hope u haven't signed anything, ur plan is Under-explained. where the hell in this world on 8th yr all ur money go to investment only. and at ur age u can get more protection with 150/m in similiar plan WITH medical card.

and the return is not OFFERED , is PROJECTED.

1-7 yrs, the money to cover the insurance plus investment.

most money got to insurance, so, the money i can get back is very less. After 7 yrs, then u can see the return is more.

i am very lazy to make any comparison liao. So, i think i will take this offer.

g00glesYYl,

<<i am very lazy to make any comparison liao. So, i think i will take this offer.>>

1) You WORK so hard for your money. But, you are TOO LAZY to make sure that you do not WASTE your money. Where is the logic here?? This is a HUGE commitment across many years.

2) Insurance is NOT savings. If you cannot save at least 10% to 15% of your gross income after paying insurance, you are buying TOO MUCH insurance.

Dreamer

haha. correct. u have the point and i understand.

but human is like this.

Wrong, it is LAZY individual that will act like that.

Cheers

This post has been edited by Kayne: Feb 28 2008, 10:47 AM

Kayne,

No. Stupid individual. If a person going to waste their money away, why work hard for money to begin with?

"Stupid is as stupid does"
Forrest Gump

Dreamer

dude, so sad to hear u say tht , a waste of our time then. my 2cents : ask in detail b4 u commit to any life long plan... u do understand wat u get back is very little, but just make sure ur Money got u wat u r supposed to get not what wat is proposed by agent.


p/s : not trying to sell u anything but feeding u with money , ur own hard earn money.

Reduce ur basic sum assured to 50k plus a medical card. 150/month can do the job

I have written article on how investment link works. Perhaps you can go read from my blog - www.jeanchai.wordpress.com

RM 150 is good for the coverage offer. But if your investment is not performance, then perhaps you might have to top up your premium (no joke, it happened to my husband).

If you're earning more $2K , spending $200 per month on insurance is OK.
You should get one when you're young. I bought my 1st policy when I was 21.

i don think you are over-insured... i mean buying insurance not only an investment/saving, its for your own good too... u never know what will happen next time .. and if u afford to pay now, why not.... thou i know the value of money in the future kinda different but at least u have some assurance next time....

If you're immersed in this section long enough you'll know that there's a huge debate regarding Insurance policy as a method for investment and savings whereby I for one doesn't agree. I buy insurance not for savings or investment. I buy because of protection, I never expect returns or money back.
Go ask a CFP and seek their opinion. Most that I come across would say Insurance is for protection and not investment/savings. Currently KMDC is giving out course of CFP and I know some friends currently attending Module 2 - Risk Management & Insurance Planning.

If u think tat u r over insured, then is over insured lo.
Everyone have their own value.
If 150K something is ur value u wan for now is then fair enough.
U have the choice to value urself. But i hope ppl can think big.
In my view, Only ppl who is think big can achieve big success.
Give u an example la, Coca Cola in Mamak is RM1.60 but Coca Cola in Six Star Hotel is RM20++ to 30++. Why leh?? Is from the same factory, same taste n everything same.
Izzit over Value??
U think for urself.

this depends on individual... some people kinda feel troublesome with lotsa way of investment, thats why they go for package ALL in one (which i think its not wise enuf) ... i myself buy an insurance for protection too but don go for investment in it where i invest in other thing... but then you need to think of what that people really need... u know some investment kinda risky, and some people cant take risk, thats why they go in for ALL IN packaging .... its just depends on people preference .... we only can give suggestion but not decide for them ....

True....but ppl fail to see that in investment and savings (especially savings) the term liquidity is at utmost importance. Thus I also seldom advise on "flipping of properties" as a smart investment tools.

Why we term savings as savings is not because you do not need to use that money so you pack it up and saves. Savings is needed in case of emergency. Thus liquidity is not there in Insurance or it's not flexible enough to be termed as "savings". In hard times, we would rely on our savings to live. Thus save less or next to nothing and constantly withdraw from our savings. Insurance plan cannot provide that unless you already have sufficient "cash value" which take years to build. So in a way, one looses both his protection and "savings" because he cannot afford to pay for it; as combination of this "all for 1 package" usually is not cheap.

Regarding investment, there's a lot more vehicles that can generate more ROI than these insurance packages and at the same time offer more flexibility in cash out (liquidity). Maybe you're right in a lot of ppl are just too lazy to search. In a certain way, insurance agents are to be blamed; but I do come to my senses that it's their job whereby they rely on that income generator to live. They cannot be telling the clients the whole truth and risk loosing their clients and commissions to survive.


Anyway, back to the topic of over insured.
If a large portion of one earning goes to insurance and left nothing for "savings" than that's over insured.
Or when sometimes one felt burdened by paying their insurance than that's a very clear sign of over insured!
I've seen many ppl who are burdened by their insurance premium. Especially those that pay through credit cards. And It's because of paying via cards that I disagree that it's savings. Investment and protection yes....but never in my terms I would recognised insurance as "savings".

There should be an analysis of how old funds/insurance perform upon maturity ... to see if BS or not

paying 10% for those expensive insurance?
you may have a better chance at getting yourself a term insurance.

annuities, investment-link sort of insurance are the most expensive and costly product for a budding guy like you.

since there're dependents on your side, insurance is important.. but not all insurance are created the same.. take note!

i'll say.. you've paying this insurance through your nose! (it's too expensive for you)

This post has been edited by lwb: May 9 2008, 07:26 PM

"Savings is needed in case of emergency". Now... think, what is emergency?

- Is going to Karaoke emergency?
- Buying handphone?
- Buying gift for gf/bf?
or...
- Had an accident warded to hospital require surgery?
- Diagnosed with cancer, requires treatment?
- Husband passed away (bread winner of family), how much can you survive with the saving in the bank?

RM150 / month, you get RM100k death benefit, how many months do you need to save to reach RM100k if you save RM150 per month?

Majority traditional Life Insurance plan will break even about 15 - 20 years, which means Surrender Value is more than total premium you paid.
So if you bought an Insurance plan at the age of 22, and when you reach say.... age 65 you feel that you are old enough... die die la, don't need the insurance anymore, no more dependent... etc. You can surrender the policy and a very high chances are the cash you got back is more than the premiums you paid.

Yes. I'm an Insurance Agent (GE). What I'm trained in giving a quotation to client is...
1. Annual premium should be around monthly salary to maintain affordability. You're only putting about 8% of your monthly salary into insurance.
- Salary RM2400/monthly, pay about RM200 per month for your insurance lor.

2. Sum assured should be around 3 times your yearly expenses. So that your dependent can survive on your insurance for at least 3 years or more.
- Monthly expenses about RM2000, 3 years is RM72000. Sum assured is RM72000.


**Don't treat Insurance as the only form of saving or investment. As we all know, higher risk, higher return. Insurance product is considered risk free, so the return.... . BUT Insurance policy is a saving account you must have, and discipline yourself to save into it. Can understand ah? **

This post has been edited by bbjslee: May 9 2008, 10:09 PM

bbjslee,

So, if someone is lay off, they can come to you for money. Since you told them that they ONLY need insurance, they do not need EMERGENCY FUND.

<< Yes. I'm an Insurance Agent (GE). What I'm trained in giving a quotation to client is...
1. Annual premium should be around monthly salary to maintain affordability. You're only putting about 8% of your monthly salary into insurance.
- Salary RM2400/monthly, pay about RM200 per month for your insurance lor.

2. Sum assured should be around 3 times your yearly expenses. So that your dependent can survive on your insurance for at least 3 years or more.
- Monthly expenses about RM2000, 3 years is RM72000. Sum assured is RM72000.>>

B.S. It is VERY SIMPLE. If a person is NOT saving 10% to 15% of their GROSS INCOME, they are spending TOO MUCH. So, a person SHOULD NOT pay 8% to insurance and if they cannot SAVE 10% to 15% of their GROSS INCOME on top of that.

<<Majority traditional Life Insurance plan will break even about 15 - 20 years, which means Surrender Value is more than total premium you paid.>>

How likely for a person to continue employment/income uninterrupted for 15 to 20 years?

<<which means Surrender Value is more than total premium you paid.>>

If a person buy term life insurance and save the additional premium into FD, the person will make MORE MOENY.

Dreamer

I understand your point of view, and I agree to a certain extend.

1. Maybe you replied before I added the footnote.

2. Does your saving in bank account provides any coverage?
3. How many people are disciplined enough to save into bank (saving/FD) monthly/yearly? If most of us are financially disciplined enough, there won't be so many credit card slaves in Malaysia.
4. How likely is a person to be unemployed for 3 months in Malaysia? (Not even a cashier / waitress job?)
5. Do you know you can apply for loan on your whole life plan? I know some business man applied for the loan before without much hassle when their business are in dire need of some cash.

It seems that you're more towards Term Insurance instead of whole life / ILP.
That's your personal view, but do you know what are the disadvantages of it?
- There is no return when the policy expires
- Premium starts off low when you're young and increases as you get older
- Limited riders/supp. benefit

i already having the plan.

i think, most of the people know, insurance is for protection.

RM200 is about my 7% of nett income. So, i think i am still afford especially when i am single as now.

investment is bomnus for it. Investment link does not gurantee the return, and this is the risk. Yet, it can create more return than Life insurance.

When there is a risk, there is a chance.

With this amount, i can have the protection and may be the return. Why not?

The only risk i forseen is, i lost my return. And just like unit trust. i need force to cancel it. So, i need to take an eye on it always... And, i told my agent to alert me on this.

Did you read. I never say no insurance. Insurance is for protection which is for the cases whereby you mentioned above.
Savings is for emergency....when you hit recession, when you're layed off, when someone in your family needs money, when you need money, when you want to buy house, when you need to get married, when you plan for oversea trips etc...
(btw, I haven't even go long winded about the utmost importance of emergency fund)
Tell me what can insurance do in this condition.
Thus I disagree with treating insurance as savings, and especially despise when the word "force savings" is being used! End of story. You may do an own survey by asking CFP's opinion.
Thus I did mention there's a lot of hot debate on this definition.

Btw, while you quoted my statement:
"Why we term savings as savings is not because you do not need to use that money so you pack it up and saves. Savings is needed in case of emergency. Thus liquidity is not there in Insurance or it's not flexible enough to be termed as "savings". In hard times, we would rely on our savings to live. Thus save less or next to nothing and constantly withdraw from our savings. Insurance plan cannot provide that unless you already have sufficient "cash value" which take years to build. So in a way, one looses both his protection and "savings" because he cannot afford to pay for it; as combination of this "all for 1 package" usually is not cheap."
You never talk about the liquidity part and the chance of both losing his protection and "savings" portion which I mentioned.
So any insights on that?

And if possible, I guess you may correct me also in my last statement which was not in your quote:
"Anyway, back to the topic of over insured.
If a large portion of one earning goes to insurance and left nothing for "savings" than that's over insured.
Or when sometimes one felt burdened by paying their insurance than that's a very clear sign of over insured!
I've seen many ppl who are burdened by their insurance premium. Especially those that pay through credit cards. And It's because of paying via cards that I disagree that it's savings. Investment and protection yes....but never in my terms I would recognised insurance as "savings""
Since you talked about credit card debts and bad financial discipline. So if the guy doesn't have any discipline to save in banks and are card slaves, insurance "forced savings" would help him?!

This post has been edited by b00n: May 9 2008, 11:31 PM

g00glesYYl,

<<RM200 is about my 7% of nett income. So, i think i am still afford especially when i am single as now.>>

If you are saving 10% to 15% of your GROSS INCOME on top of that, you can afford IT. If not, you CANNOT. In ALL your posts so far, you DID not mention what is your saving level. If you SAVE NOTHING, you are SPENDING TOO MUCH. End of discussion.

Dreamer

---

Added on May 9, 2008, 11:37 pmbbjslee,

1) How many recessions have you experienced in your life??

2) You can be under-employed too. Aka, used to be manager but now work as casher. With reduced income, you need savings to supplement your income to survive for a while.

Dreamer

This post has been edited by dreamer101: May 9 2008, 11:37 PM

hi googlesyyl,

risk and return are both a variable in the future..

but one thing is absolutely certain and factual is:
the cost of the insurance that you're carrying or the product of this sort of insurance is expensive and not cost effective as a tool of investment to even begin with.

there're better ways to achieve what you're doing at a fractual of the cost..

and the other thing about unit trust is.. it's your own eye that is responsible to your own investment and NOT your agent's eye. be reminded that agent are equipped to sell but they don't fit the shoe of a financial advisor, unless they're certified.. the best eye is still your own eyes.

you lost money because you don't know how to discern cost and value in an investment.

hi bbjslee,

for this, i really have to say.. you probably haven't been through any recession before.. you're probably young and naive (tending towards ignorance).

Sorry maybe have misinterpreted your POV. I sincerely apologize for it.

1. We do agree on certain things.
- SAVING IS A MUST.
- Certain protection should be in place. (Dreamer seems to be more supportive of term insurance than whole life)

2. What we couldn't really agree on is what is EMERGENCY.
- We have different personal definition on it.
- For me, any events regarding health or accident is more emergency because we could never foresee it coming.
- Besides, when you are unemployed, the last thing you want is being involved in an accident or have some serious health problem.

3. I'm a strong believer in forced saving. I set my saving account (salary) into Scheduled Inter Giro into my another bank account which I do not have ATM card or CC. And I do set aside about 20% of my salary for saving. Anyway just in case some of you got confused, I'm a part time insurance agent working towards fulltime now.

Anyway, the thread is about "Over-insured". That could never be a clear guideline on that. There are people who buy insurance policy with premium 20% of their income. It has to be reviewed case by case basis.

---

Added on May 10, 2008, 12:07 amI grad in 2002 almost into 30s now. I've never been out of job for a week. Perhaps I was lucky

Anyway, the way you put it, is almost like personal attack.

We're here to share our POV on the subject "over-insured".

This post has been edited by bbjslee: May 10 2008, 12:07 AM

Here's a 'simple' method to use.

To know if you're over insured or not just ask yourself these questions:

1. If you're disabled today and can no longer work, how much income do you want to have per year and for how many years?

2. If you have dependents, how much money would they need to survive if you're no longer around, and for how many years?

Then check the amount you want with what total liquid assets - liabilities you have and add an additional 50% of your current annual income for your last expenses which includes funeral expense & taxes to be paid.

Why only liquid assets? You still need a house to stay in when disabled and so does your family if you're no longer around.

Add it all up and that's the figure you should be looking at.

If you want a full personal financial review which is much more detailed, feel free to drop me a pm.

--

As the financial knowledge among consumers grow in Malaysia, financial institutions are also coming up with better, more sophisticated products to meet the customer's need.

Newer Insurance plans can now act as an Emergency Fund, namely because:

1. Faster cash value built up.
Traditional plans normally has cash value built up after the 3rd year, where as newer plans starts off in the 1st year itself.

2. Flexibility of withdrawals and top up.
Liquidity is there as withdrawals can be made and money received within a week. Alternatively, you can top up money into the account to enjoy higher interest than a normal bank savings account.

3. Higher transparency.
You can see exactly how much is being deducted for the cost of insurance and how much goes into the savings.

You want to know if getting a term and saving the rest in FD is better versus a protection/savings plan? I'd be more than happy to show you.

Best Regards.

bbjslee,

1) You did not say in your post.

2) From financial standpoint, Emergency is anything that requirement MORE MONEY than your usual expenses.

<< For me, any events regarding health or accident is more emergency because we could never foresee it coming.
- Besides, when you are unemployed, the last thing you want is being involved in an accident or have some serious health problem.>>

You COULD NOT forecast a time where you can be unemployed for a long time. But, does that mean you do not prepared for this??

3) You WOULD NOT BUY so much insurance that you could not save 20% of your income. But, you WILL NOT give the same advice to others. This is called hypocrite. You do not believe what you are saying.

<<Anyway, the thread is about "Over-insured". That could never be a clear guideline on that. There are people who buy insurance policy with premium 20% of their income. It has to be reviewed case by case basis.>>

B.S. You have a guideline for yourself. But, you would not tell others because it prevents you from selling more insurance.

<<I grad in 2002 almost into 30s now. I've never been out of job for a week. Perhaps I was lucky >>

It simply means that you have NEVER been through a recession. Aka, you are YOUNG and NAIVE.

Dreamer

1. I couldn't tell you step 1 - step 100 how I sell insurance. This is not "how to sell insurance" thread. The 1 golden rule that I uphold is Be HONEST to your client. That's how I would get return clients and more referrals. Besides, I wouldn't want my client to stop his Insurance policy due to financial problem. Having less commission is better than stop of commission.

2. I agree with you. That is why I already stressed in my post. DO NOT treat insurance as your only saving. Besides the recession/employment you've been stressing all the time, you still need saving to buy cars, houses.

3. Back to my point 1.

- Have you made any insurance claim or anyone close to you made a claim before?

bbjslee,

The title of this thread is whether the TS is over-insured

A) I said if TS cannot save 10% to 15% of his gross income, he is over-insured.

B) You claim that is not true.

But,

C) Personally, you save 20% of your income while buying insurance.

So, should we believe (B) aka what you say or © aka what you do?? Or, you are just a hypocrite??

Dreamer

haha. ya, i nvr mention how is my saving level. To be honest, last time, when i have no credit card in my hand. i am still able to keep track how much i really save from my income, using simple excel form. Now, i does not able to do so. Yes, i am lazy. I know i am. But, i believe that, i am able to save 15% from my income.

Since one of my FD is mature and i do not plan to renew it. As, i plan to put the cash in bank -> RM10k to public bank foreign currency FD very soon. And, i have no unit trust and other investment.

I will clear the credit card debt in every statement. i never kena interest before.

The major expenses is my car, installment RM500 and the petrol. also some dating fee.

When i read thru the post, my concern is that, i buy wrong insurance as investment link is not the one for me.

Gosh... you never sleep?

How did I claim that is not true? Did I mention it from one of my sentence or you summarised it from my various post?

Why not you share with us what kind of insurance policy you have and why you chose it? (If you do not have any, then why?)
- I could learn some new points of selling insurance, and product idea to sell to people who have same mindset as you.
- People who are reading the thread could benefit from your sharing, since you been through recession soooo many times.

---

Added on May 10, 2008, 8:18 amHave your insurance agent told you
- What are the pros and cons of the product?
- What would happen if company's investment is not performing at all?
- What is the GUARANTEED coverage? is "Coverage" NOT "Return"

If missing any of the above, go back to your agent and ask him/her to explain again.


This post has been edited by bbjslee: May 10 2008, 08:18 AM

g00glesYYl,

Let's do some simple math.

<<1. my salary is about 2400 - 2700 (after deduct the epf + part time allowance)>>

That means your gross income (aka + EPF) ~ 3K

10% of gross income = $300

15% of gross income = $450

So, you should save $300 to $450 per month

<<My monthly saving is like +-200 (if i pay RM200 for the insurance)>>

Your monthly saving after insurance is ONLY $200 = 6.7% of your gross income. Aka, it is less than $300 per month.

In summary, you CANNOT afford the insurance.

<<Since one of my FD is mature and i do not plan to renew it. As, i plan to put the cash in bank -> RM10k to public bank foreign currency FD very soon>>

How wise is that?? If you have an emergency and that foreign currency crash at that week, you will be toasted.

Your EMERGENCY FUND should NEVER exposed to ANY risk.

Dreamer

Insurance is to protect ur from losing earning power, peaceful of mind of urself, is a must for u. Ur agent is selling u lnvestment-linked portfolio, be in mind, jz take that investment portion as an extra, don really take seriously on the return.

Go ahead for ur own protection! Are u over-insured? Jz value urself, Do U worth 100K?

hi dreamer101,

should never argue/debate with an insurance seller.. that's his bread & butter. there's a lot of pride to be defended here.

let it be.. for he needs the conviction to keep on selling. you know your risk allocation and it might better serve to those who really need(advice) them.

this is my 2cents

hi googlesyyl,

i really enjoy your ignorance here..
you're actually considering going from one hot water to another pot of hot water?

foreign fd is not a place where you make your money if you don't know what you're doing and simply buy into the marketing/advertisement.

for one, you need to pay attention to alot of minute details (e.g one of them is the bid-ask spread of currency trading)

since you've small money to play with.. my as well you go ahead and learn some real hard-knock lessons.. i'll double your 'haha' for you.. should be enjoyable watching you make such mistakes in life and being happy for it.

that's why, ignorance is bliss.. haha(again)

perhaps you overly generalized and attempted a mass-attack by your statement that got others ticked off?

it's irresponsible to say what you've said and since you haven't been thru real recessions, being insensitive to those who have been through one, is not really a good way to provoke others.

i however can respect your position as an insurance seller, it's a honorable vocation and you have to sell to make a living out of it.

i do hope that you'll go through tough financial times like a recession and perhaps able to learn and profit from it.

Sorry, i does not update my income. Well, this yr start, i have my increment. Now, basic is 3k and 4~500 allowance. And plus the bonus and travel/project allowance when i can travel oversea. But, not every month i can travel. this make me have less money...

oohh. the 10k is not my emergency fund. i have nvr say that. i still have 10k more located in normal FD.


Hi lwb
Foreign FD is very hot recently. It is better than the normal FD. The risk should be lower than the unit trust as the foreign currency like aus and nz is stable compare to malaysia. So you know how this foreign FD working?


Well, i really feel thank you to your bcoz you all give such a lot of experience and opinion to me. Yes, we need to think a lot before do something. Yes, i am lazy, but i too study the plan b4, just may be not to detail.

This is year 2008, the old thing sometime cant work. If you really wan to argue, there will be a lot of things.

Dun make the life suffer. And, most of the people become rich not because how good they save the money but it is how good they use their saving make money for them. How many of you become very rich because just your saving?

build the foundation and then ... fly~~ If you fail, just mean that, you are not good enough.

This post has been edited by g00glesYYl: May 11 2008, 08:30 PM

g00glesYYl,

<<orry, i does not update my income. Well, this yr start, i have my increment. Now, basic is 3k and 4~500 allowance.>>

Do you know SIMPLE MATHS?? That means with HIGHER INCOME, your saving level of 10% to 15% of your GROSS INCOME is even higher. After insurance, you are STILL not saving 10% to 15%. So, you CANNOT AFFORD the insurance.

<<Dun make the life suffer. And, MOST of the people become rich not because how good they save the money but it is how good they use their saving make money for them. How many of you become very rich because just your saving?>>

How do you know?? How MANY millionaires that you KNOW personally??

I know plenty of people that become rich just from their savings.

Earn, save, invest.

If your earning is SO MUCH that you only need savings and invest a little bit is ENOUGH.

Don't assume SOMETHING that you know NOTHING about.

From your POSTS, we know that you know VERY LITTLE about personal finance. So, how dare you to assume ANYTHING?? Isn't it foolish??

Dreamer

They offer u the min return is 2-9%, izzit guaranteed 1 ?

Based on what, you claim that, after insurance, i still not able to save 10 - 15%? i already mention i have the increment and of course i will have more saving as my increment is over 20-30%.

Yes, i know very little about the personal finance and i never assume anything as what you say.

Earn, save, invest. -> this is everyone know's fact. Like chinese say, "who do not know your mother is a ladies? " Work hard is a must to gain better income. I am talking about the thing over the scope.

Your post is different from what i learn from the personal financial advisor. hey dreamer, why i cant listen to who is professional.

i might be foolish... but thank, i will remember you when i have more money.

the min is guaranteed. However, the max is not. Why? Because it is a livestment link, it can gove you more return compare to Life insurance(fixed 4~5%). U wan more, then u need to take the risk.

g00glesYYl,

<<Your post is different from what i learn from the personal financial advisor. hey dreamer, why i cant listen to who is professional. >>

What can I say?? You cannot even differentiate between a sales person from a REAL personal financial adviser. Do you know the difference??

<<i might be foolish... but thank, i will remember you when i have more money. >>

Don't worry. At the rate that you are going, the money will not be staying with you for long.

Dreamer

Insurance is not investment, period.

If you can't even take care of yourself now, why on earth would you take an insurance policy to care about your future?

Why don't you join the insurance companies as an agent?
It does give some good knowledge of how things go...

Ask a real CFP which do not have any obligation to sell any product from whichever insurance/finance company and see what are their thoughts.
Every sales person nowadays in the field calls themselves financial planner. But would they introduce products that are not sold by their company? I do not blame them as it's their rice bowl. How many agent you came across advised on "emergency fund". How many agent you came across really sit down and help you calculate your monthly expenses vs your salary and say...."here, this is the max you can 'invest' if you want to".

is the guaranteed for min return of 2% stated in writing ?

agreed, either u get full insurance or full investment.... dont mix them up..

Well, seem like we are having the different point of view.

Nothing to be argue.

wish you all the best in your life.

hi dreamer, my advise to you, dun understand the statement in sentences but read in overall. It is very dangerous as it will cause the missunderstanding. If you are christian. Consult your pastor on how to read bible.

This post has been edited by g00glesYYl: May 12 2008, 01:57 PM

g00glesYYl, what we're saying is that there's still a lot of investment method out there that gives better return in years as compared to Insurance. yes, insurance can gives profit as investment and it's like how we always compare with FD returns.
Now replace <FD> with <insurance> compare against other investment vehicle. Or if one is crazy enough, do try and compound FD returns for 30 years and see whether or not the return is really that bad.

EG:
If one puts 10,000 into FD and rack the return for the next 30 years without taking it out at constant 3.7% annual interest rate:
FV(3.7%/12,12*30,,-10000) = 30,291.81 = 202.92% = 16.91% per annum
Not a bad return at all!! (So why is everyone complaining that FD is not worth it?)

The point I want to make here is by looking at this calculation, the return is superb! But than again, how much money and how long do you need to reap that profit comes into question. Thus, for insurance and it's investment plans and also most of the investment vehicle out there, we need to factor in those components to see whether or not it's worth the purpose.

Ok boon. i got you. thank you

life insurance objective is to provide you protection but the choice is yours.

life insurance is to provide your dependent coverage
it's only covered when someone is death or diagnose with TPD ( total permenant disability

for personal coverage it's important to have a medical card/crictical illness as we know the medical bills are sky high nowdays

dont get mix up


the min is guaranteed. However, the max is not. Why? Because it is a livestment link, it can gove you more return compare to Life insurance(fixed 4~5%). U wan more, then u need to take the risk.

Investment-link does not guaranteed any percentage of return. . . normally insurance company project a lower returns compare to the actual
fund performance to the clients. Only endowment plan provide guaranteed returns for 3-4% + dividen declare on yearly basis depending on company performance.

Worst case senario A: If Samy Velu is to be Malaysia PM tmr, RM1 per unit drop till RM0.5 cents, initially your savings/investment from
RM10,000 will be RM5,000. Dont worry will not happen

Senario B: Over a 3-5 years period of time, if the unit price increase from RM1 per unit to RM1.50, initially you gain 50% from ur savings/investment

This post has been edited by Colaboy: May 13 2008, 02:41 PM

I beg to differ since i just started work here... i encountered many cases based on investment linked products from certain companies need customer to top up coz it does not cover their protection now since the market went down.

Actually every insurance plan is good.
It will give u something to compensate ur loss of uncertain event,
so it is better to have 1 for it.
If u think that u need to cover more areas n want to have more sum insured.
Then just go n bought it base on ur afford ability.
No free luncheon for pay little amount n can give u more sum insured.
N just remember insurance is something u cant buy it when u need it.
So u all should get it BEFORE u need it, when u are in healthy status.
Thats all.

Wah,,,! 1 yr RM700 for PA??? I can get u a million protection PA liao...! PA for RM100k normally is <RM200. dun b cheated by lfe agent, they surviving on commission. sure push high premium product la....

This is an example of a"Bankrupt Policy" which if cusomer pass away, the dependent of the customer could not survive long or will have a very hard time.From what I see,no point reducing the plan, the difference will not help to buy a house.Alternative? Do part time or become an insurance agent part time and learn more about the products and you get to buy at a cheaper price.

Humbble

I don't recommend someone to buy investment linked plans (ILP) because we are the ones who bear the risk, not insurance companies. When we buy insurance, we want our risk to be transferred to the insurance companies. ILP can't achieve this objective. However, I never say that ILP is not good. It is just that you have to take the investment risk when you buy ILP.

Make sure your PA is at least twice your D&TPD's amount. If your company has good medical benefits, just take the minimum medical card coverage.

---

Added on March 7, 2009, 12:40 pmFor ILP, if the insurer go kaput, the SUM ASSURED is guaranteed by the government, but not the CASH VALUE. That is the con for ILP. But try and do a comparison for the same coverage for ILP and conventional insurance, you will see that ILP costs abt 20% less.

This post has been edited by meejawa: Mar 7 2009, 12:40 PM

Wow, that's a first time an insurance agent not promoting ILP.
Can explain more on the risk involved for those that don't understand?

Ppl who knew my posting in regards to insurance would know that I don't prefer ILP because of the returns (other investment vehicle can produce better), and I don't like to mix protections and investment. However, the risk factor would need you to enlighten us.

I am not promoting ILP because of the following reasons. But, I never say that ILP is not a good product. It is just that we need to take the risk of investment.


i) The return is not guaranteed. When I open my AIA sales illustration system and choose ILP, the first 2 pages show me a lot of beautiful figures for investment value. But, after I read the third page, I am surprised because all the figures just now are getting less and less and reach ZERO. I am sure that if I show it to my propects, they will be surprised and may consider to terminate all their ILPs purchased previously immediately if their insurance agents never tell them about this before. Some insurance agents tell us that we can get 9.5 % or 12 % annually for their ILP. Hello, these figures are just projection and estimation and are not stated in the policy contract. So, I prefer something that gives me guaranteed benefit although it is not much and not high. At least I know what I will definately get it when I need it the most no matter how bad the world economy is in the future. If we want to invest to get a high return, I will suggest investing in shares.

ii) Like what b00n have said, protection is protection and investment is investment. Don't mix. As we all know, the premiums of riders are not guaranteed to be fixed generally. After 10 to 20 years, the premium rates may increase. This may affect the investment value of ILP. If the world economy is in crisis like what is happening now, we may need to pay extra premium so that the ILP will not lapse.

iii) I am not an investment expert. So, I don't know how to explain the risk factor well. What I know is every investment involves risk. According to Warren Buffett, high risk is not knowing what we are doing. We buy unit trusts or ILP because we have no knowledge and there is a group of so-called experts there to help us to invest and monitor the performance. In other words, the risk for ILP and unit trust is very high if we don't know what we are doing. If we know what we are doing, why not we do our own research and invest ourselves in shares which give us much higher returns in the long run.

For the main differences between traditional life insurance and ILP, please read KCLau: Personal Finance Money Tips.

Please correct me if I am wrong.

This post has been edited by lcl832002: Mar 9 2009, 05:21 PM

Hie. I'm new here..I'm planning to get insurance soon and I've met agents from AIA, GE and Prudential. However I still can't find the one plan that suits me.

My budget is not more than RM 200/mth. I've been proposed both the ILP (by Prudential and GE)and traditional plan (by AIA). I'm concerned about having to pay higher premium for ILP when I grow older although its has ample coverage for now. As for the traditional plan, the sum assured is not that high (it's ok to me) BUT the hospitalization benefits is in a separated plan and the premium is burned every year. So. as I grow older, the hospitalization plan's premium will increase as well and to make it worse, it's burnt yearly! Btw, are hospitalization separated in ALL traditional plans?

I've done the calculations, the amount that I have to pay for both types of insurance till I'm 55 years old is around the same. The traditional plan proposed by AIA to me is a 'guarenteed payment till 55 yrs old only'. After 55 years old, they'll roll the $$ to cover my premium (That's wat I've been told by the agent). For ILP, there's no guarantee how long the $$ dat I've put in over the years will cover me after 55 yrs old. Depends on d economy at dat time, if it's really bad, then I may have to continue paying my premium, maybe at an even higher price.

I'm looking for a protection ONLY plan which is not burnt every year and the premium does not increase as I grow older...I'm not sure whether a plan like this exists..so I hope there's someone out there who can share some info with me. Many thanks in advance

Hi. I recommend you to buy 4 in 1 plan from AIA. It is not an Investment Linked Plan (ILP). I never suggest my clients to buy ILP due to several reasons. If you are 30 years old, male, non-smoker and working in office, the monthly premium is RM 182, around RM 6 per day.

RM 182 per month? 4 in 1 plan? RM 6 per day? What does it cover?
It actually covers the following things:
1) Whole life insurance - RM 100,000.
2) Medical card - annual limit RM 60,000 and lifetime limit RM 200,000, guaranteed renewability subject to reasonable terms and conditions.
3) Critical illness - RM 50,000.
4) Personal accident - RM 100,000 (death benefit); RM 1,000 per month up to 180 months (RM 180,000, serious disability income); RM 3,000 per year for each accident (medical reimbursement); RM 100 per day up to 730 days (accident hospital benefit); RM 5,000 (compassionate allowance).

If you are interested, you can call your AIA agent to know more about it...

I hope it helps you...

This post has been edited by lcl832002: Mar 9 2009, 11:34 PM

Thank you for your help!

Btw, I was worried about the news of AIG not doing well. I asked my agent and he said there's no need to worry about it as AIG is a separate company from AIA. But in d proposal letter that he printed for me it stated AIA as 'An AIG Company'. So, if AIG's having problems, shouldn't AIA be affected too?

This post has been edited by rednails: Mar 10 2009, 12:07 AM

I will not defend AIA if it is really unstable. Why? Because I am also a consumer. For your information, all the financial institutions including banks and insurance companies in Malaysia are regulated closely by Bank Negara Malaysia (BNM). So, BNM will not allow bankruptcy happening to them. If a financial institution really has to declare bankruptcy, BNM will protect our interests as consumers and policyholders.

Your agent is right. Even AIG bankrupts tomorrow, AIA Berhad is still very stable as it has been separated from AIG. Last year, AIA in Malaysia earned a pre-tax profit of around RM 200 million. The words "An AIG Company" will be deleted when AIA changes its logo again in the future. AIA is no longer called AIA. In the near future, AIA will be named as AIAG, AIA Group. So, AIA is a group by itself.

If you are still worried, please read my blog. There is a letter written by the CEO of AIA Berhad. Just click the link below...

This post has been edited by lcl832002: Mar 10 2009, 01:04 AM

If AIA Malaysia try to disassociate itself from AIG, meaning to say AIA Malaysia can no longer be proud of itself as one of the largest Insurance Company in the world.
And furthermore why put Manchester United team on the front page of AIA.com.my? It is AIG that sponsor it, not AIAG or AIA Group. Unless meaning to say, AIA Malaysia has not been 100% separated from AIG. Unless of course, "Separation" still in process.

OT: Please complain to your AIA IT department, www.aia.com.my MUST use IE to load.... @#$%^&

i think get a whole life critical illness policy
not a whole life with critical illness rider
this is where the critical illness cover will not expire after certain year

What is the point of being the largest in the world if AIA is not financially stable like AIG? AIA group has more than $ 60 billion of assets. What do you think about this figure? I myself don't care whether AIA is the largest in the world. What I care is whether it has branches in other countries. AIA can be found in Indonesia, Thailand, China, Hong Kong, Brunei, Vietnam, Philipine, Singapore, South Korea and many other countries.

When we say AIA is separated from AIG, we mean that AIA's financial management is free from AIG's intervention. AIA is like a son and AIG like a father. Now, AIA wants to marry. Does it mean AIA has nothing to do with AIG any more after marriage? No, the relationship between them is still there by law and nature. But, AIA has its own family now. So, it can make decision on any matters by itself. This is what we called AIA is independent in terms of management system.

In fact, all these things are not important. The most important thing is AIA is still earning a lot of profit. Last year, AIA's pre-tax profit is around RM 200 million. AIA still can get this amount of pre-tax profit last year when AIG nearly collapse last September.

About the website, AIA needs some time to do update.

I hope you get a better understanding on AIA situation now.

This post has been edited by lcl832002: Mar 10 2009, 01:23 PM

son and father .. son gettting marry .. i like this

Thanks for your praise...