Sunday, August 2, 2015

Terminating Life Policies

I held a few life protection policies from various insurance companies, which I bought more than 25 years ago. At that time, I was convinced that I needed the policies as I just started working and was supporting my parents financially. If anything should happen to me, at least I would leave a sum of money for my parents. After I got married, I thought these policies would be good to protect my young family.

More than 20 years have gone by since then. With the passing of my parents, and graduation of my children, I think these life policies have served their purpose. Therefore I called on NTUC Income today to terminate the life protection policy. I also called my AIA agent to terminate my life policies with them.

I believe that we need different policies at different stage of life. At this stage, my need will be a good H&S policy.

13 comments:

Createwealth8888 said...

Exactly!

Jimmy L said...

You surrender your policy will get some cash back and dividends
My kids still schooling
I hesitant to terminate my life policies

Low Paul said...

Hi Sanye,
I terminated my aia life insurance recently. To me, they were becoming more n more of a joke. I bought them some 15yrs ago when i just started working. They are just using our money to invest.
Getting the highest form of shield plans n their associated riders is much more impt.
My agent is suggested legacy planning etc. So far i left it as such.

Sanye ◎ 三页 said...

Jimmy,

As I said we need different insurance product at different stage of life. However, AK seems to suggest that term policy is a better option to life policy. You may want to check it out.

Cheers!

Singapore Man of Leisure said...

Sanye,

I guess CW, Penguin (Low Paul), you, and I have come to the same conclusion although we are on different paths ;)

When our net worth is several times the policy payout, the policy has outlived its purpose...

I've cancelled my term policy some years back, and will be cancelling my wholelife policy this December when it breaks even on it's 20th anniversary.

Sanye ◎ 三页 said...

SMOL,

As the saying goes: "Great men think alike, and fools seldom differ."

So which category do we belong to? ;)

Frugal Daddy said...

Hi Sanye

That is my plan too, when my financial needs are lesser after achieving financial independence. I would say ut is necessary when I was 20+ to 40 yrs old. After that, h&s is the main coverage. How are the surender values lije compared to their benefit illustrations? I was told that ntuc income performed at their higher projected amount in the benefit illustration. :)

Sanye ◎ 三页 said...

Oh yes, I forgot to mention, I was positively surprised by Income. The amount I get back is double the amount I paid in premium. Not too bad. :)

K said...

Hi Sanye,

Which year did you start your Income Life policy?

Sanye ◎ 三页 said...

Hi K,

I bought the policy in 1987.

Shannian said...

Recently i chk my whole life policy cash value, is breakeven now. What is yr suggestion if i wdl it out?

Sanye ◎ 三页 said...

Hi Shannian,

Without knowing more details, I won't be able to suggest if you should cash out your insurance policy. In my opinion, We all need certain insurance policies at various stage of our life. I terminated mine since they have served their purpose and I no longer need them.

You should ask yourself these questions:

1. What is my purpose of having this policy?
2. Does it serve the purpose well, or is there other alternative?

In general, if you have family members who are financially depending on you, then life policy is needed. However, you may want to weigh if a term life policy better serves you than a life protection policy. A life term policy has much lower premium, but has no return. So if you think you can invest your money saved better, then go for it. But if the money saved just idle in the bank, then a life protection policy with some return may still be better.

Shannian said...

Thanks for your time and explanation...i will keep my policy as i am sole income in the family.