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What exactly is life insurance and how does it work?
- Thread starter Allota
- Start date
It is very simple really. You put aside part of your hard earned money, large part of it goes into subsidising the insurance agent's car, housing and lifestyle, the other part of it goes to the insurance company. These insurance companies will take this fund and invest in anything that hopefully make them money to pay the CEO, directors and shareholders.
If you drop dead, then the money will be paid back to your estate, somethings not without a lot of kicking and screaming and reluctance on the part of the insurance companies. They will usually do whatever it takes to avoid paying, by claiming certain exemption clause which you never seen when you signed on the dotted line, because you were too busy checking out the insurance agent's "career line".
If nobody claims the money after you drop dead, insurance company will happily keep quiet and and lapse your policy because you have not keep up with the premium payments. But of course now you can't reinstate your policy because they will require a comprehensive health check before they do so, but you are already dead!
I guess from what I have written so far, you can tell I'm not a big fan of insurance.
Sound like CPF, im so happy every time i received my account statement.
Nice dig, will replay same to my insurance parasite of agent:p
CPF is much simpler.... Think of it as a drain....
It's money down the drain. You have very little hope of getting it back, and by the time you get it back, it'll be too little too late.
It is very simple really. You put aside part of your hard earned money, large part of it goes into subsidising the insurance agent's car, housing and lifestyle, the other part of. ...
I guess from what I have written so far, you can tell I'm not a big fan of insurance.
There is this hokkien saying, "kiang toi ho, mai kay kiang". i.e good to be smart but dun be a Smart Alec.
This post in one example.......
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I thought Singaporean can use CPF to buy house ?
Of couse it can't. Those KJ and CSJ fans never tell you meh?
Life insurance is like ponzi.
When you buy agent get com plus company processing fee the money left is what u invest into company or fund manager. That why when u take out money before maturity date u will lost money or surrender value less than money u invest in.
The money in the insurance, the fund manager will invest the money . If lost in value u insurance payout will be less than what u invest. If profit the fund manager that most of it after deduct 3~5% for customer.
Meaning head fund manager win and customer take small cut . Lost customer lose.
So for max 5% payout on average not worth it to buy any retirement fund or life insurance if you have money put in fix deposit. Better invest yourself to buy stock split into 5 to 10 stock. Less than 5 too risky and more than 10 will make u confuse. Your return rate will be 15% on average for 10 year or more if u are smart.
So far I had use my money in CPF to invest in fund that I choose not what stupid agent recommend.
So far on average get 10% return for last 10 year better than 2.5% I get from CPF.
Do your homework before choose.
If agent so good they are millionaire.
When you buy agent get com plus company processing fee the money left is what u invest into company or fund manager. That why when u take out money before maturity date u will lost money or surrender value less than money u invest in.
The money in the insurance, the fund manager will invest the money . If lost in value u insurance payout will be less than what u invest. If profit the fund manager that most of it after deduct 3~5% for customer.
Meaning head fund manager win and customer take small cut . Lost customer lose.
So for max 5% payout on average not worth it to buy any retirement fund or life insurance if you have money put in fix deposit. Better invest yourself to buy stock split into 5 to 10 stock. Less than 5 too risky and more than 10 will make u confuse. Your return rate will be 15% on average for 10 year or more if u are smart.
So far I had use my money in CPF to invest in fund that I choose not what stupid agent recommend.
So far on average get 10% return for last 10 year better than 2.5% I get from CPF.
Do your homework before choose.
If agent so good they are millionaire.
Bro Troll, this is so not true.
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After you buy a life insurance, the policy contract will be sent to you. Everything about the insurance you bought is in the contract. Upon receiving the contract, you have 2 weeks to go through it. Within these 2 weeks, if you are not happy with what you had bought, you can cancel it and get a full refund.
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So many times when people told me that his so and so passed away or was hospitalized they said "heng ah, got insurance if not really dunno what to do..."
Insurance and insurance company is not out to cheat people's money. Most of the time it's the customers trying to cheat the insurance company, by not making full declaration or claim that "agent never say...". Even up to the point of faking death (happened in Sinkie land before); Or rogue agents making false statements about the policy benefits.
The thing is you have you have to know what you need, what you want and what you bought.
Above comments are made to the best of my knowledge and in my personal capacity.
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Agent's commission is only entitled for the first few years and, depending on the type of plan you bought, most of the time it's less than 50% of the premium.
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Only 10% of the profit is paid to shareholders and the rest is paid to policy holders for Participating policies .
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Provided death benefit is included in your insurance policy, if your policy is more than 1 year; not died from illness that you were diagnosed before buying the insurance and did not declared; not died from illness excluded in your policy contract, the claim procedure is quite strait forward (no kicking and screaming required) and usually payout within weeks if not days .
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Insurance company can only pay what can be paid. In fact sometimes cannot pay one they also pay, out of good will or empathy.
After you buy a life insurance, the policy contract will be sent to you. Everything about the insurance you bought is in the contract. Upon receiving the contract, you have 2 weeks to go through it. Within these 2 weeks, if you are not happy with what you had bought, you can cancel it and get a full refund.
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If nobody make claims, how the insurance company know that you are dead? By right your agent should be in regular contact with you, if something happen to you he/she will be able to assist your family members about claim matters.
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Provided death benefit is included in your insurance policy (and conditions met according to contract), if you die before policy lapse, your family members can still make a claim.
So many times when people told me that his so and so passed away or was hospitalized they said "heng ah, got insurance if not really dunno what to do..."
Insurance and insurance company is not out to cheat people's money. Most of the time it's the customers trying to cheat the insurance company, by not making full declaration or claim that "agent never say...". Even up to the point of faking death (happened in Sinkie land before); Or rogue agents making false statements about the policy benefits.
The thing is you have you have to know what you need, what you want and what you bought.
Above comments are made to the best of my knowledge and in my personal capacity.
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After one year suicide is payable.
Tlhose someone could be your wife and young kids!
It is very simple really. You put aside part of your hard earned money, large part of it goes into subsidising the insurance agent's car, housing and lifestyle, the other part of it goes to the insurance company. These insurance companies will take this fund and invest in anything that hopefully make them money to pay the CEO, directors and shareholders.
If you drop dead, then the money will be paid back to your estate, somethings not without a lot of kicking and screaming and reluctance on the part of the insurance companies. They will usually do whatever it takes to avoid paying, by claiming certain exemption clause which you never seen when you signed on the dotted line, because you were too busy checking out the insurance agent's "career line".
If nobody claims the money after you drop dead, insurance company will happily keep quiet and and lapse your policy because you have not keep up with the premium payments. But of course now you can't reinstate your policy because they will require a comprehensive health check before they do so, but you are already dead!
I guess from what I have written so far, you can tell I'm not a big fan of insurance.
Ha Ha SPOT ON!!! and very true. you forgot to mention they take the customer money and use it to place full page adverts to "glorify" themselves. you see alot of these stupid adverts featuring their dysmorphic ugly faces in newspapers everyday, giving themselves stupid titles even calling themselves Drs. what is a doctor doing selling insuraance???? the honorary degree is bought from some fictitious uni hence only fit for science fiction. self glorification exercises using client's money. BTW a full page adverts costs easily$20-30K . how come so many stupid idiots who bought from them still keep quiet???? all these million dollars round table mean million dollars scams. period. they think they are some stupid "royalty " like king arthur round table.
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@Cestbon, What you are talking about is more to investment, investment linked type of insurance and unit trust.
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Again, the thing is you have you have to know what you need, what you want and what you bought.
Above comments are made to the best of my knowledge and in my personal capacity.
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No it's not. Life insurance make use of your money to invest is real investments and actually give you back profits. Ponzi doesn't.
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Agent got to eat, company have to survive. Nobody work for free. Whatever commissions and fees are not substantial amount compared to the total amount of premiums paid.
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This is true (most of the time). If you buy a policy that has a maturity date, it's best to keep till maturity.
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It's true only if you are talking about investment linked policies or unit trust of lumpsum payment. If other type, it will depends on alot of other factors.
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Not true. It's the other way around. Fund manager could be taking less than 3~5%.
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Erm... this is technically true. However, if insurance company don't make money for you, they don't make money for themselves. If they don't make money for themselves to pay for all the operation costs, they lose money.
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I don't think there's any fix deposit in sinkie land that gives you 5%. Not even 1 or 2% if I'm not wrong.
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If you have the capital, knowledge, time and energy to monitor the stocks... yes, please go ahead. Please note that stocks/shares, unit trust, investment linked insurance, traditional insurance, are all different things.
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Most of the agents are only qualified and allowed to recommend funds for you based on your investment risk appetite. Actually if you are really smart, you shouldn't even go thru an insurance agent if your objective is investment. There are platforms that you can make investments to save you some sales charges. You are talking about investment here not insurance.
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Very true. Do your homework before you any how buy and then later blame on the agent or the company.
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There are actually many millionaire agents around.
Again, the thing is you have you have to know what you need, what you want and what you bought.
Above comments are made to the best of my knowledge and in my personal capacity.
Buying life insurance is like placing a bet at a casino table.
To win the bet, something bad must happen to you. Usually it is death.
And just like a casino, the house always wins. Insurance companies ensure profitability by adjusting premiums or denying payouts whenever possible.
It's just gambling, nothing more.
To win the bet, something bad must happen to you. Usually it is death.
And just like a casino, the house always wins. Insurance companies ensure profitability by adjusting premiums or denying payouts whenever possible.
It's just gambling, nothing more.
Many people get conned into treating insurance as an investment. Never do that. Insurance is an expenditure to protect your loved ones whilst you are still accumulating wealth. Always have a policy covering death, critical illness, and a full medishield-hospitalization policy that covers you from the firs dollar. However, they should all be term policies, without cash value.
The worst policies are investment linked products that have plenty of hidden fees and charge the customer as high as 5.5% initial sales charge upon purchase of unit trust.
The worst policies are investment linked products that have plenty of hidden fees and charge the customer as high as 5.5% initial sales charge upon purchase of unit trust.
I've heard a similar line of argument from the faithful defenders of MLM. "If the uplines don't make money, the downlines don't make money too." What they're really saying is that it is a mutually beneficial coexistence... so relax and give us your money.
And from the lengthy and passionate reply from presssomemore, I surmise that he/she is, or has been in the insurance business. Hope it's not Tan Kin Lian.
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