Mr Tan Kin Lian wrote another ebook about life insurance planning for Singaporeans. In the introduction, he said that,
For most working people in Singapore, the difference between the right and wrong choice can amount to more than $200,000.
To some, it might be a bold statement. But I think he has a case as he backed up the claim with figures in this ebook.
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The ebook would teach you how to determine the amount of insurance premiums the insurance company and agent are pocketing from you. He found that such costs can range between one to two years’ of premiums. It is hence important to know if you have been ripped off. He deemed that the deduction should not be more than 20%, but first, you must first learn to look at the right numbers to determine it. The key is to look at the Benefit Illustration and he used a real example in the ebook for the calculation.
He went on to say that a life policy usually takes more than 15 years to break even and the surrender values are “horribly low” prior to the maturity rate. In the event that you can no longer pay the premiums because you have lost your income, you would lose a lot of money if you have to surrender the policy pre-maturely.
The ebook is also dotted with rule of thumbs which are easy and practical for implementation. An example is
You can buy insurance for 5 to 10 years of your income. The cost of this insurance should be within 1% of your income. If you earn $60,000 a year, you can set aside $600 a year for this insurance.
He will share with you how to insure enough and yet not over-commit your salary to insurance. You can save and invest more money which can amount to more retirement funds.
The ebook cost $4 and can help you accumulate $200,000 for retirement potentially. A good enough risk-reward ratio for you?