Insurance & Costs of having and raising a child

I think the original return was supposed to be in the range of 3.5% to 4%, but the Fund managed to out-perform this. Whatever the case, I think 4.75% is a decent return thus far. Of course, there is no guarantee this can continue into the future but so far I am satisfied.

As for reducing Term, yes I have locked in the expenses year by year so there is clarity there, even though coverage drops. I prefer this method as opposed to higher premiums with same coverage as the step-up premiums can be very significant (e.g. for over 50 years old).

i did a calculation on my relative's policy and noted that the "guaranteed" compounded returns were effectively less than 2%. In fact, less than 1%, if i recall correctly. Much different from marketed performance which referenced historical yardsticks. Therein the risk.

(15-04-2011, 10:46 AM)mikh Wrote: i did a calculation on my relative's policy and noted that the "guaranteed" compounded returns were effectively less than 2%. In fact, less than 1%, if i recall correctly. Much different from marketed performance which referenced historical yardsticks. Therein the risk.

Interesting. Is your relative's policy an ILP, Endowment or Whole Life? That could account for the difference, perhaps? Also, the Fund composition may play a part.

(15-04-2011, 10:48 AM)Musicwhiz Wrote:

(15-04-2011, 10:46 AM)mikh Wrote: i did a calculation on my relative's policy and noted that the "guaranteed" compounded returns were effectively less than 2%. In fact, less than 1%, if i recall correctly. Much different from marketed performance which referenced historical yardsticks. Therein the risk.

Interesting. Is your relative's policy an ILP, Endowment or Whole Life? That could account for the difference, perhaps? Also, the Fund composition may play a part.

Endowment. It was a proposal actually. My point is that i believe the guaranteed returns are significantly lower. It does not matter how the insurer invests. To me, it sounds a bit like the structured products, albeit not so extreme. High returns based on historical performance can be hawked, but no guarantees means not enough confidence.

(15-04-2011, 11:21 AM)mikh Wrote: Endowment. It was a proposal actually. My point is that i believe the guaranteed returns are significantly lower. It does not matter how the insurer invests. To me, it sounds a bit like the structured products, albeit not so extreme. High returns based on historical performance can be hawked, but no guarantees means not enough confidence.

Yeah, point taken and that is a very valid point.

Then again, assuming we are investing on our own instead of relying on Fund Managers, the returns are also non-guaranteed. The difference, though, is that we do not have to pay a fixed Management fee for managing our money for us.

After speaking to my insurance adviser this weekend, I realised that critical illness does not cover early stages of cancer or diabetes or kidney failure etc. So I started to ponder that I would probably need alot of consultations with specialist doctors which the hospitalization insurance would not cover. Thus, what insurance would recommend to cover this portion?

mrEngineer perhaps i think what is more valid is to cover for these we should save up well and build up our trusted TCM sources.

kidney failure can be saved.

(02-05-2011, 01:07 AM)mrEngineer Wrote: After speaking to my insurance adviser this weekend, I realised that critical illness does not cover early stages of cancer or diabetes or kidney failure etc. So I started to ponder that I would probably need alot of consultations with specialist doctors which the hospitalization insurance would not cover. Thus, what insurance would recommend to cover this portion?

Are you aware there are early stage critical illness cover? For cancer and kidney dialysis treatment both are covered under private hospital plan. Coverage includes medication and "examinations" and tests ordered by the doctor. Not sure whether examinations is considered consultations though . So the only thing that hospital plan does not cover is diabetes. I think diabetes medications are not expensive right? My father-in-law has diabetes for years and constantly require oral medications. He is still financially ok leh. For serious case i think will require periodic injections. Injections can be done on by ownself.

Dunno if I am digressing but recently did someone from opposition party (think RP?) recommend having a 'Universal Health Insurance' or something like that?

(15-04-2011, 08:08 AM)Musicwhiz Wrote: From this exercise, I managed to "free up" about $9,000 of cash from the surrender of the two Life policies, and have put this money to work earning 5-6% yield in equities.

Just another update. The previous figure above was inaccurate. I just completed surrendering all of me and my wife's policies.

In total, the funds we recovered amounted to approximately $13,000 in total. This will form part of my opportunity fund to be deployed when there are suitable investment opportunities, and will be reflected under my CASH balances in my month-end portfolio review.