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Want to know if you pay too much for insurance?

Saturday, August 27, 2016

I said a few times before that we need insurance in life and, for most of us, we also need to invest for a more secure financial future.

However, insurance and investment should be kept separate to make the best use of our limited financial resources.

Buy insurance for the sake of insurance. Don't mix insurance and investment or we could end up paying too much for insurance.


Always ask:
Are you overpaying for insurance?



Many people are paying a significant amount from their hard-earned money for their insurance but are still severely underinsured. 

It is not unthinkable that we may need up to $1million coverage of life insurance or more. This is to provide for our dependents’ living expenses, children’s education and repayment of outstanding loans if an unexpected death occurs.

Find out about your life insurance coverage needs using this simple calculator: Click Here

While this coverage seems like it would need an enormous amount money to pay for, it does not have to cost a bomb.

For a 35 year old male, looking for $1million Death and Total Permanent Disability Coverage until 70 years old, the coverage costs $1,749 a year (less than $150 a month) to be paid for 35 years with term insurance.  


If we go with whole life insurance instead of a term insurance, it becomes very expensive. We will find that we are not able to sufficiently insure ourselves if we use whole life insurance. For the same 35 year-old male, $500,000 whole life coverage could cost S$8,250 a year to be paid over 49 years!


Paying more for insurance is not the same as having enough insurance coverage!

 

Compare what you are currently paying for your insurance policy against what is currently offered by the different insurers here. 

Are you overpaying for the amount of insurance coverage you have? Do you have sufficient insurance coverage for your loved ones?


Purchasing a term insurance is the only way to provide sufficient coverage affordably.

Recently, there has been a huge debate on DIYInsurance’s Facebook page with insurance agents attacking the stand for Term Life Insurance. 

In response, DIYInsurance, has written an e-book, The Case of Term vs Whole Life Insurance: A Comprehensive Consumer Guide to explain the stand of advocating for term insurance for consumers.

The must-read informative ebook details the purpose of insurance and how we can plan for our life insurance needs. It also highlights the commissions paid to insurance agents and why commissions from whole life insurance could lead to insurance agents promoting whole life instead of term insurance.

For a limited time only, download the free e-book here

Remember, no one cares more about our money than we do.




More about DIYInsurance:

DIYInsurance (Do It Your way Insurance) is Singapore's First Life Insurance Comparison Web Portal.

Launched in June 2014 by MAS-licensed financial advisory firm Providend Ltd , DIYInsurance empowers consumers to make informed decisions about their insurance purchases based on their own agenda. On the portal, users can easily compare insurance products across insurers. 

DIYInsurance is led by key people with around 2 decades of experience and has benefited more than 110,000 users with the most honest, independent and competent advice. All staff are salaried-based and not commissions-based. To provide greater cost savings, clients are rebated 30% of the salesperson’s commissions.

9 comments:

Kevin said...

Hi AK,

Personally, are you insured under term insurance or whole life insurance?

SMK said...

Ah I see u tagged this as advertorial. Nice!

Finally christopher tan contacted you.

No wonder u linked diy insurance instead of comparefirst?

So did you get some insurance from providend or advertorials are free of such demonstrations of faith/usage?

Providend remains a for profit company so personally I see any such debates as competition between companies.

Bobbabu said...

Hello AK,

Wondering why so many investment blogs are suddenly talking about Term Insurance and linking specifically to DIYInsurance and their E-Book leh. Is it a campaign they are trying to launch?

AK71 said...

Hi Kevin,

I have a couple of whole life policies. One bought by my dad when I was in my teens. Another one when I was an undergraduate. Since most of the cost of whole life policies is front loaded, I have decided to keep them as long term bonds which yield upwards of 3% per annum.

I also have a term life policy which I bought later on in life.

If I knew what I know today, I would have stopped my dad from buying those whole life policies for me.

AK71 said...

Hi SMK,

I always tag sponsored blog posts with the label "advertorial". If advertisers ask me to exclude the label, I reject the job. This has happened a few times before.

I am already well insured. Otherwise, I will seriously consider DIY Insurance. ;)

AK71 said...

Hi Bobbabu,

Yes, it is an advertising campaign by DIY Insurance after the the huge "debate" they had on their Facebook page in which insurance agents from other agencies/companies attacked their stand on term life over whole life.

Bobbabu said...

Hello AK,

Thanks for replying! Was just curious :p

Speaking as a young chap, I've got a question that I haven't got a good answer lately. When people say "buy insurance when you're young, its cheaper!". How true is this?

From my research, I see that some Term Insurance Premium (E.g. MHA Aviva Group Term Insurance) does not rise along with age. So if I buy 2 years later, I still pay the same per month. On the other hand, I note that there are other policies like CI revise the premium payable if you move up a bracket. However, even when there is such a revisable premium, I won't be worse off as well if I buy later right?

Therefore, to my mind it sounds like the saying that it is cheaper to buy when you're young is fallacious to the extent you don't get a cheaper premium. It only make sense insofar that if you buy too late, you might not be covered for some illness which would be classified as pre-existing.

Please enlighten senpai AK

Regards,
Billy

Singapore Man of Leisure said...

SMK,

AK and that Cheerful guy got honour amongst thieves; they do put advertorial or sponsored post at the bottom of their hired gun kopi money posts ;)

If everyone in our community "conveniently forgets" to include such disclaimers, financial bloggers will just degenerate into the level of food bloggers...

And that's not saying much as food bloggers are now on par with 2nd hand car salespersons and insurance agents :(

But then, all can't beat me! I am the lowest of the low:

I'll do anything for a drink!

LOL!


P.S. Astute observation. Its just different fish mongers shouting their fishes are the freshes ;)

AK71 said...

Hi Billy,

It is good that you are taking what people tell you with a pinch of salt. ;)

In a nutshell, cost of insurance generally becomes more expensive as the chance that a claim might be made increases. Whether it is a cover for life, H&S, critical illnesses, travel or accident, it is all the same. Higher the risk, higher the cost of coverage. :)

You might want to read this:
Term Life Insurance...

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