What can you get with RM 2,500 per year?

In one of the appointment’s I had yesterday, I reviewed a policy that this guy, aged 27 already had in place for the past 4 years.

His currently paying almost RM 2,500 per year for this policy but was quite puzzled why the policy only provided RM 100,000 worth of  life insurance & another RM 100,000 worth of critical illness.

Based on my calculation, at the age of 23 (the time when he took the policy) for RM 2,500 per year, he should be able to get at least double the amount of coverage! Now, of course there is nothing wrong here in the terms of premium or is there any swindling going on but, the issue is that for the premium that he is currently paying, he should get a lot more in terms of life insurance that what is currently in place.

So, where did the figures go wrong? No where actually. Why? The trade off here is in the policy cash value at the end of 20 years.

For RM 2,500 per year at RM 100,00 life insurance & RM 100,000 critical illness coverage, the policy cash value at the end of 20 years is projected at RM 57,000.

IF we double the benefits up to RM 200,000 for life & RM 200,000 for critical illness, the policy cash value at the end of 20 years will only amount to RM 37,000. An RM 20,000 difference.

Question is, which is more important, the insurance coverage OR the policy cash So, I asked my prospect, “What was your main objective when you purchased this policy?”

He immediately answered “To protect myself against unexpected events”

To strengthen this, based on his financial needs analysis that we did yesterday, he currently needs RM 300,000 worth of life insurance instead of just the current RM 100,000.

So, if you have 1 or more policies that you keep under your pillow or locked up in a safe somewhere at your in laws, just take them out once every 2 or 3 years & do a review with your agent.

If he or she is not available, you can always email me. ehm ehm..


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