Life Insurance

[samran]

Can anyone confirm my understanding on this topic?

Apart from the obvious coverage should the policy holder dies, what are the other benefits from having a life insrance policy? Seems most pay back what you have put in plus a bit of interest at the end of the term.

Given that the odds of dying a quite low, to me a life insurance policy simply looks like a bit of a small pension fund which you get 20 years down the track. In the meantime your money is locked away and you get penalised for accessing it.

[DJ Moore]

Can anyone confirm my understanding on this topic?

Apart from the obvious coverage should the policy holder dies, what are the other benefits from having a life insrance policy? Seems most pay back what you have put in plus a bit of interest at the end of the term.

Given that the odds of dying a quite low, to me a life insurance policy simply looks like a bit of a small pension fund which you get 20 years down the track.  In the meantime your money is locked away and you get penalised for accessing it.

<{POST_SNAPBACK}>

Everybody dies. Some sooner some later. You buy life insurance not for yourself (As you say a pension fund for you) but for another who would be at at lost if you die prematurely.

How valuable you are to that person (what they lose if you die) should be equivalent as to the amount of the policy.

If there is no one that will be at a lost in your situation, then there's no need to even worry about............... DJM

Edited August 29, 2005 by DJ Moore

[GuestHouse]

What use life insurance?

When you are lieing there on your bed dieing, you will at least not have to worry about your family not having money to live.

[samran]

What use life insurance?

When you are lieing there on your bed dieing, you will at least not have to worry about your family not having money to live.

<{POST_SNAPBACK}>

yes, but many private pension/superannuation funds already do that already. So my question is, whats the main difference? No one has really been able to explain that to me yet.

[colinj]

yes, but many private pension/superannuation funds already do that already. So my question is, whats the main difference? No one has really been able to explain that to me yet.

<{POST_SNAPBACK}>

If you have people that depend on your income, partner, young children etc and you have enough money put away in a super fund to look after them then you do not need life insurance.

But if not, life insurance boosts your assets accordingly should you die. As you accumulate more assets over the years you can review the amount of life insurance required to supplement your assets, whether they be property, shares cash etc and reduce or increase the cover accordingly.

But as a suggestion avoid policies that have a cash in value at the end. They usually give you a lousy return but some agents will push them as they can pay a high commission.

Look for term life covers that do not have a cash value at the end of the term. Also consider including total permanent disability just in case the you are alive but suffer an injury or disease that stops you earning an income for the rest of your life.

Hope this is what you were after.

PS. If you are in a Group Super scheme look at including life cover in it. This is usually the cheapest way.

[Firefan]

Good advise Colinj!

Life insurance should be just that: a bunch of money paid to your family in case of your death in order for the family to be able to continue financially unaffected. In case you have the stash already (or no dependents) then no need for life insurance.

Products that COMBINE investing with insurance are normally not worth it (high fees and not experts in either insurance or specifically INVESTING) instead just buy life insurance with no investing (no return of money) build-in. Cheaper. And then invest the money yourself (normally through some decent funds).

Cheers!

Edited August 29, 2005 by Firefan

[samran]

thanks all for clearing it up. Life insurance policies that I have seen didn't really come across as a particularly good investment money wise, so getting some sort of simple life insurance without the investment may be the way to go.

[DJ Moore]

What use life insurance?

When you are lieing there on your bed dieing, you will at least not have to worry about your family not having money to live.

<{POST_SNAPBACK}>

yes, but many private pension/superannuation funds already do that already. So my question is, whats the main difference? No one has really been able to explain that to me yet.

<{POST_SNAPBACK}>

You say many pension funds. Yes many but not all. Even a pension fund may not go far enough.

So no mater what.........Considering everything, just review the lost to them, if you die.

It can't be any simpler.

Get life insurance to cover the amount they (i.e. love one, business partner, etc.) will lose, losing you................ DJM

[lopburi3]

Good advise Colinj!

Life insurance should be just that: a bunch of money paid to your family in case of your death in order for the family to be able to continue financially unaffected. In case you have the stash already (or no dependents) then no need for life insurance.

Products that COMBINE investing with insurance are normally not worth it (high fees and not experts in either insurance or specifically INVESTING) instead just buy life insurance with no investing (no return of money) build-in. Cheaper. And then invest the money yourself (normally through some decent funds).

Cheers!

<{POST_SNAPBACK}>

Agree. Life insurance is not a good investment (except for those who will not do it any other way perhaps).

Term type life insurance to pay the mortgage or provide a lump sum to those you wish to leave something is normally a much better option.

If you have no need (family) to leave anything then life insurance should not even be considered.

[think_too_mut]

There was a good article in the BKK post mid-July titled "Is There Life After Death", it was about life insurance.

The author was from Barclays Life, incidentally or not, that company sold insurance business to Legal&General just about then.

From the memory, the author said that after 17 years in insurance business he still has to meet a widow whose husband had too much of insurance.

It was not only a lump sum paid once, it was about a full follow up through school, life and university for children.

That type of insurance was, for someone over 45yrs, 350US$ per month he said.

Right now, through my company's insurance policy, my gf and the baby would get for her unbelievable amount in US$ if I died (she knows that) but I'm worried about big money heading upcountry - how much would escape gambling and greedy family...I'm after combining it into some fund that would provide monthly pension for her and (now) the baby and later for schoolarship.

Edited August 30, 2005 by think_too_mut

[The Skipper]

"Right now, through my company's insurance policy, my gf and the baby would get for her unbelievable amount in US$ if I died (she knows that) ...."

My friend, that is bad information to be putting out.

Your wife may be the greatest but a few of her close relatives could probably give a rats a** about your premature demise.

Sorry.

Getting back to Life insurance, I meet alot of Thais that have signed up for Life Insurance / Investments.

If you do a spreadsheet, the returns are pitifull.

[think_too_mut]

"Right now, through my company's insurance policy, my gf and the baby would get for her unbelievable amount in US$ if I died (she knows that) ...."

My friend, that is bad information to be putting out. 

Your wife may be the greatest but a few of her close relatives could probably give a rats a** about your premature demise.

Sorry.

<{POST_SNAPBACK}>

Would not a wife have to know she is insured? Is it a secret anywhere in the world among family members?

Relatives or anyone (including herself) would get monkey's nuts if there is anything suspicious.

[mijan246]

Samran my wife (thai) is covered fairly well by what she will receive from the Govt x % of what I & her recieve now.

We have a small life insurance policy in her name (20000) per year more as a compulsory saving and a little nest egg for her in years to come. She may well use it to visit Aust or have a big piss up to say thank goodness that pain in the arse is gone. 20000 a small price to pay for her peace of mind.

Works for us.

[samran]

I have a super scheme in australia which I regularly contribute too, though I haven't checked if it still has life insurance now that my contribution are voluntary (by virtue of being overseas).

The reason for my question is that I am moving back to Bangers shortly and am looking for ways to minimise my tax. I see that you get a 10,000 baht deductable for having a life insurance policy, so rather than the money going to the thai tax man, I'd was looking to see what a) what policies were out there and what beneficial they were from an investment perspective.

From the sounds of it, I should simply find a thai policy that would provide cover in case of death only to get the tax break and then invest the rest of my money in something provides a better return.