Life Insurance

[sbk]

I am a complete newbie when it comes to life insurance and would like a simple explanation about the differences in term life insurance, whole etc. And the pros and cons about the different kinds.

[ThaivisaInsurance]

Sbk

May we suggest you do a simple ‘Google’ and it will explain all ?

One important point to watch for in Thailand is that the Life companies prefer to sell a mix of Life and some type of savings plan which is more expensive then just straight Life insurance if that is all you require.

[samran]

I am a complete newbie when it comes to life insurance and would like a simple explanation about the differences in term life insurance, whole etc. And the pros and cons about the different kinds.

Dunno about the difference in termanology, but in Thailand life insurnce tends to be some sort of death coverage pay out to your nearest and dearest tied to a savings plan which will be paid out to you once (say) you turn 60. The returns are pretty abismal when you compare the returns you could make from a managed/stock index fund say.

My personal experience with life insurance is to purchase a policy which covers me for my death. It pays out $250K to my wife for instance. But the premiums I pay aren't 'saved' in any way, once I pay them, they are gone, lest I get hit by a train. The reality is though, that my wife and I are building assets in other areas, so the $250K is not 'all' that she is going to get, but it will be a nice way of rounding things out.

I've also got diability insurance on top of my life insurance, in case I become personally incpacitated and unable to work. For me, this is for a larger amount than the life insurance, as it would probably need to last a longer period if something was to happen, and I wouldn't want to be eating into our asset base to look after myself.

For me, both are linked to my pension fund, so my wife will immediately have access to those savings as well, which she otherwise wouldn't be able to touch until she is 50.

So it is all about what you are comfortable with and where you think the greatest risk is going to come from (death or disability) and whether you want to incorporate a savings plan into your policy, or whether you think you can get a better return elsewhere.

[torrenova]

You don't go to a garage for a cream cake do you ? so when you buy life assurance, you want just that, insurance, not some crap savings policy tagged alongside.

The two main types are level term assurance and depreciating term assurance. The first is a flat payout determined at the start, the second is usually attached to a repayment mortgage and declines as your mortgage liability declines.

Get a simple level term life assurance plan. If you need it, some plans allow for an increase in the sum assured without having to redo a medical. These can be on marriage, the birth of a child etc.

I doubt whether Thai policies are good for much as they seem to have some cuckoo pricing policy many times the price of the same cover in the west.

[jazzbo]

Ms. SBK -- Life insurance is such a broad term and category that you really need to limit the field and say or determine exactly WHY you want life insurance... and who would be the beneficiaries.

Depending on your age and those reasons, you might find here in Thailand find it is much more cost effective, as others have suggested before, that you consider a mix of health insurance, an accidental death policy, and an annuity. There may be also tax advantaged situations regarding the annuity depending on your citizenship and tax issues if you are maintaining a business.

So if you post here some reasons as to WHY you are considering such insurance, you may get some better informed answers from the others on this forum.