that kenneth chua comment in 2014 is a very perceptive and insider comment.
I made extensive and intensive studies on my own whole life policies so I know that was a very good important comment. and most people won't understand it.
universal life insurance as it is marketed in Singapore, in this environment, is poison.
and ak, his question is not what you think it is.
"I don't think Universal Life Insurance is well known in Singapore and to me, it is just a more flexible form of Whole Life Insurance. "
kenneth chua's comments in 2014:
I chanced upon your blog this year and is impressed by your insights into the various financial topics. (Errh on oats as lunch occasionally yes, but not everyday..its quite filling :)
What works in the past for traditional whole life and endowment policies are not achievable now in the low interest rate environment. Your policy and mine are of different series of the same product (Prime Life). Thus, surrender value differs by about 15K. Life coverage is high with corresponding low premiums in the past. It was a struggle especially in early years paying the premiums for multiple policies. Hence, at age 65, it will be nice to surrender one or two policies at highest surrender value. However, it will be good too to keep these policies for your descendants as a gift.(Properties are a more preferable choice obviously..hehe..).
Current whole life policies offered don't even meet the inflation rate. The worst advice received is to purchase ILPs in order to increase the returns with wrong objective of insurance coverage vs investment returns. Thus, I don't encourage anyone to purchase whole life policies nowsaday.
20 Aug '2016
Reader:
Hi AK,
A friend recently suggested getting Universal Life Insurance policy, taking a loan to pay part of the premium & service the interest only of the loan. The benefits highlighted is akin to getting high value Term Insurance coverage but with added benefit of cash value growth (i.e. form of wealth accumulation). Would you have a conversation with yourself on the value/risk of Universal Life policy and the circumstance that it might be suited for?
Thank you in advance 🙂
AK:
I don't think Universal Life Insurance is well known in Singapore and to me, it is just a more flexible form of Whole Life Insurance.
"You have the liberty to reduce or increase your death benefit and also to pay your premiums at any time and in any amount (subject to certain limits) after your first premium payment has been made." INVESTOPEDIA
It is still more costly than term life insurance as it includes elements of savings and investment. So, if you believe in not mixing up insurance and investment, this is not going to fly. 😉
