Hi,

It is always sad to know when someone buy insurance they are mostly focused on the 'returns'/'savings' portion rather than the 'protection' element. I had mentioned this many times (some of it were being bombarded by agents) but I shall say this again, "If you want to look at purely savings, please go to bank or do unit trust or property (to name a few)."

Also, be careful of the products being promoted by the banks. Some are insurance product but are being 'package' to look as if it is purely savings. Most of the savings plans with the word "insurance" are bound to be having admin charge, insurance charge, processing fee and what not that makes the IRR not attractive, some even lower than bank FD!

Investment Link Policies are tied to the underlying funds & Prudential investment linked policies have 3 main sections:

1. Basic Unit Account, life/CI riders

2. Protection Unit Account, accidental riders, PA, waiver, medical card riders

3. Investment Unit Account - If you ADD on your premium into this section, 95% of the premium will be allocated to buy you units.

For PruBSN, section 1 & 2 the "Wakalah charge" are 1st to 6th yr 60% 60% 50% 30% 20% 0%.

This means for year 1 & 2, only 40% of your premium is used to purchased units which in turn generates the RM 600 for you. Now when the funds are on the 'high' you're actually buying lesser units, meaning lesser cash value.

When your fund had snowballed into a substantial amount, have it moved to bond (when the funds are high) and should the fund drops, have it switched back to Equity to ride on the wave. It is an endless repetition if you're serious of managing your money.

For example, before the financial crisis hit at 2008, a client had Rm 50K in his policy and moved it to bonds. When it drop, and if he had not moved his fund would be valued at RM 30~32K!

Having said that, nowadays with RM100 per month, it is not even enough to cover the Room & Board. The minimum room & board in most of the private hospitals had gone up to RM 120-150.

If you have any questions please ask

Hi, before you even think that that piece of paper from PruBSN is not worthy, may I ask you what would you do if in the middle of the night at 3am your kid is suddenly having high fever with red spots all over his body?

If you had cancelled that policy you'd not be able to use the medical card at the panel hospital and you'd have to standby RM 2K ~ RM 3K as security deposit if you need to seek treatment at the private hospital.

Denggi cases could cost between RM 8K~12K at a private hospital in Penang and you'll have to pay that amount if you don't have a medical card.

Most insurance that has medical attached to it, you need to pay for insurance charge. There is no free lunch my friend.

If you already have another medical card that is able to do the job as to what PruBSN is offering, then perhaps you may need to talk to the agent that sold you that plan.

Discontinue any plans especially plans with medical card in it is never beneficial or recommended. However if you really need to surrender (due to whatever reason), you'd need to bring your policy to the counter. They'll provide guidance on how the surrender process is and the cash value that you're able to take out.

Bear in mind if you had paid Rm 2400, you'll not get RM 2400, but instead you'll get very much less when you surrender as the policy is only around for 2 years. After the policy is in force for 7th year onward, that is when you can see the cash value gradually increasing.

Bro, I'm sorry of what happen to you. But what do you mean by your agent take your money and cabut? Are you paying directly to the agent?

If you are, please do not give agent cash. Instead opt for auto-debit (potong dari bank terus ke insurance company) / credit card payment.

When our income is affected, you could get your agent to re-look at the policy and opt for lowering down the cover so that you can still sustain the policy. That is the agent's job. If he is not doing you justice, then by all means change agent.

One thing to note: With the cheaper policy that you have now, if you were to stop payment, the cover would eventually ends as well, no?

Also, just a reminder the insurance policy needs to be serviced for life or as long as you want to enjoy the benefit/coverage of the policy, some up to age 80 (for the medical).

It's like your car insurance, when you stop payment, the cover ends. Sure some opt for term/standalone policy lower premiums. But has it occur to you that some term policies generates cash value at snail pace?

Do you prefer 1) Pay now lesser burden later or 2) Pay lesser now and burden later? (do note that at old age, we may not be able to work anymore and that is when our coverage with company ends.....

Personally I prefer 1) when we are able....

Second point is that if you're looking at insurance for savings, sorry, you better put that money in ASB or other forms of investments. Insurance is about Protection. Once you get sufficient protection, then only look into savings.

I was servicing my client at one of the private hospitals in Penang two weeks ago and spoke to a brother whose sister is in ICU for 15 days for Stroke. She wiped out her entire EPF/savings, something she had worked for for the past 35 years in a mere 15 days of ICU because she had cancelled her policy due to agent who happens to be a close friend of the family and since then never trusted any insurance.

She was warded at the private because at emergencies like this, one only know the nearest hospital there is.

The 15 days in ICU costs RM 70k and the bill is expected to rise as there has not been any improvement. She's on life support. I hope she recovers soon or the family will really be in financial trouble.