If you are 30 years old (male) and you wish to provide $3,000 a month payable to your family in the event of premature death, the annual premium payable is:
20 year Family Income policy: $484
30 year Family Income policy: $1,068
The family income is payable for the remainder of the term. You can reduce your cost by 50%, when you select a 20 year policy, instead of a 30 year policy.
You can take the insurance to provide a higher benefit by paying a proportionately higher premium.
In my view, a 20 year policy is probably suitable for most people.
Friday, February 29, 2008
Buying insurance on a limited budget
If you are a male at 30 years and have a limited budget of $600 a year for life insurance and you wish to provide for your family in the event of premature death during the next 30 years, you have the following options:
a) Level term, covers $182,000
b) Decreasing term, covers $486,000 reducing gradually over 30 year
c) Family income of $1,685 payable monthly for remainder of 30 years (initial cover is $606,000)
Option (a) provides the same amount in the event of premature death. Option (b) and (c) provides a higher amount in the event of death during the earlier years, and a lower amount in the later years.
You also have the option to buy a whole life policy and get a sum assured of $30,000. This covers you for the whole of life and accumulates a cash value (i.e. some savings).
Which option do you prefer?
a) Level term, covers $182,000
b) Decreasing term, covers $486,000 reducing gradually over 30 year
c) Family income of $1,685 payable monthly for remainder of 30 years (initial cover is $606,000)
Option (a) provides the same amount in the event of premature death. Option (b) and (c) provides a higher amount in the event of death during the earlier years, and a lower amount in the later years.
You also have the option to buy a whole life policy and get a sum assured of $30,000. This covers you for the whole of life and accumulates a cash value (i.e. some savings).
Which option do you prefer?
Surrender a life policy
Dear Sir,
Your Blog is much useful to many people. Unfortunately I have not come across before taking many of my insurance plan. Most of them were taken without having prior knowledge about it.
I have Company X Endowment policy under my wife's name taken 3 years back. I need to surrender it. Is it possible to do it now? If so, how much I may be getting in return?
I do not need this plan as I am now in out of Singapore. My current employer is covering insurance for whole family in this country. I was in Singapore for the past 7 years.
REPLY
I hope that this FAQ can answer your question:
http://www.tankinlian.com/faq/exist.html
You should ask Company X to quote you the cash value now, and in 5 years time, so that you can make the correct decision.
Your Blog is much useful to many people. Unfortunately I have not come across before taking many of my insurance plan. Most of them were taken without having prior knowledge about it.
I have Company X Endowment policy under my wife's name taken 3 years back. I need to surrender it. Is it possible to do it now? If so, how much I may be getting in return?
I do not need this plan as I am now in out of Singapore. My current employer is covering insurance for whole family in this country. I was in Singapore for the past 7 years.
REPLY
I hope that this FAQ can answer your question:
http://www.tankinlian.com/faq/exist.html
You should ask Company X to quote you the cash value now, and in 5 years time, so that you can make the correct decision.
Big losses in AIG
From www.bloomberg.com
American International Group Inc., the largest insurer by assets, said Joseph Cassano will step down from running the financial products unit after $11.1 billion in losses on guarantees sold to fixed-income investors.
Cassano's retirement is effective March 31, Chief Executive Officer Martin Sullivan said today in a conference call. He will serve as a consultant through the year, Sullivan said.
AIG reported the biggest quarterly loss in its 89-year history yesterday after writing down the value of so-called credit-default swaps. The New York-based company said for the first time in yesterday's statement that realized losses on the portfolio "could be material'' to quarterly earnings. The fourth-quarter net loss was $5.29 billion.
NOTE: AIG is the parent company of AIA (American International Assurance) in Singapore.
American International Group Inc., the largest insurer by assets, said Joseph Cassano will step down from running the financial products unit after $11.1 billion in losses on guarantees sold to fixed-income investors.
Cassano's retirement is effective March 31, Chief Executive Officer Martin Sullivan said today in a conference call. He will serve as a consultant through the year, Sullivan said.
AIG reported the biggest quarterly loss in its 89-year history yesterday after writing down the value of so-called credit-default swaps. The New York-based company said for the first time in yesterday's statement that realized losses on the portfolio "could be material'' to quarterly earnings. The fourth-quarter net loss was $5.29 billion.
NOTE: AIG is the parent company of AIA (American International Assurance) in Singapore.
Shuttle service to MRT station
I took a taxi to visit KK Hospital. The fare was $18. I learned later, that KK Hospital operates a shuttle to transport their employees and patients to the two nearby MRT stations.
Rather than have an organisation run a separate shuttle service, it will be more efficient to have feeder services that serve many public and commercial buildings within 2 kms of each MRT station.
I hope that Land Transport Authority will allow small bus operators to operate these feeder services. If these services are well publicised, more people will take the train instead of relying on expensive taxis.
Rather than have an organisation run a separate shuttle service, it will be more efficient to have feeder services that serve many public and commercial buildings within 2 kms of each MRT station.
I hope that Land Transport Authority will allow small bus operators to operate these feeder services. If these services are well publicised, more people will take the train instead of relying on expensive taxis.
Theft of cash cards from cars
I read in the newspaper of the high rate of theft of cash cards from cars.
About two years back, I discussed with some senior people in LTA to allow car owners to opt to pay ERP charges through a monthly bill. This is similar to paying for telephone charges based on actual usage. It should be easy for the ERP gantry gates to identify the vehicles that have incurred ERP charges and bill the owners on a monthly bill.
This has the following advantages:
1. Reduce the time taken by the owner to top up the cash cards
2. Reduce the risk of theft of cash cards.
At that time, the LTA officials explained to me on why the concept was not feasible. (I do not agree with their view). As they were not keen to explore an alternative. I decided not to pursue the matter. With the high rate of theft of cash cards, perhaps LTA will now review this matter?
About two years back, I discussed with some senior people in LTA to allow car owners to opt to pay ERP charges through a monthly bill. This is similar to paying for telephone charges based on actual usage. It should be easy for the ERP gantry gates to identify the vehicles that have incurred ERP charges and bill the owners on a monthly bill.
This has the following advantages:
1. Reduce the time taken by the owner to top up the cash cards
2. Reduce the risk of theft of cash cards.
At that time, the LTA officials explained to me on why the concept was not feasible. (I do not agree with their view). As they were not keen to explore an alternative. I decided not to pursue the matter. With the high rate of theft of cash cards, perhaps LTA will now review this matter?
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