Musicwhiz Wrote:I've instructed my planner to terminate the life policy once it expires, and switch fully to term at $540 per annum. With the $1,500+ saved per annum, I can invest this money for her and build up a good asset for her to compound when she is much older. I am in the process of getting a quote from the planner on a TERM policy starting age 21 and terminating age 65, but I believe it should be much cheaper than the $1,620 per annum which I previously quoted.
Your current plan is apparently to:
1. Buy a term CI policy for your daughter, expiring when she hits 21; and
2. Let your daughter buy her own term CI policy when she is 21, expiring at age 65
You will run the small risk that before age 21 she develops a medical condition that does not activate the payout, yet makes her uninsurable e.g. diabetes is often an automatic disqualifier for ALL medical insurance.
You actually have 2 more options:
1. Buy a term CI policy for your daughter now, expiring when she hits 65. When she starts work she just takes over the premium payments. The single policy guarantees continuous coverage without further underwriting.
2. Buy a guaranteed renewable term CI for your daughter. When she starts work she takes over the premiums. The premiums start cheap, but escalate with age. Since she should earn more later in her career, this should not be an issue. As with option 1, coverage is continuous without further underwriting.
As usual, YMMV.
brattz Wrote:My insurance agent is a nephew of my dad's insurance agent. (who is of close relationship with dad).
I want to say i was mis-lead and want my preimums back. But i don't want to hurt the relationship.
Well, your insurance agent certainly had no qualms about hurting YOU financially. It's up to you to decide whether you want to continue the personal relationship, though it looks like you are better off terminating the professional relationship.
brattz Wrote:4) Personal Accident
Personal Accident plans are extremely profitable for insurers i.e. you are overpaying for the protection.
Look at the payouts and it's clear that for minor accidents like loss of a toe/finger the payout is laughable. For major accidents, you get the full payout, but chances are you will land in hospital anyway, and then you should be worrying about your H&S coverage.
Beef up your H&S coverage rather than buying a PA policy.
PA and hospital income plans do not pay enough when you really need the money, and for small bills you can easily self-insure.
brattz Wrote:Only the saving plan can give 3%. - This i will keep, to beat inflation.
The savings plan is essentially an investment. Why bother with an investment product that can only give 3% per year? Again, the money is being invested by the insurer mainly in index funds, or in index stocks, which amounts to the same thing. Might as well DIY into an index fund and save yourself 1.5% per year. As you have noted, over 20 years this difference results in a huge advantage for you.