Life Insurance - Elderly Thai Lady History Of Cancer

[Cuban]

The situation seems obvious to me but I'm currently some thousands of miles away from Thailand and my wife's understanding on things financial is not brilliant nor her ability to communicate the finer points of short-term life cover and policy details.

My Mother In Law is a typical elderly Thai lady (73-74yrs) and really not too bad considering some of the horror stories I have heard and read about in these pages.

Last year she was treated for stomach cancer, mostly chemo, and despite some touch and go moments she seems to have recovered quite well.

My wife has been offered a life policy on her mother under these terms:

Premium: 29,600 Baht per year.

Payout year one: ?

Payout after one year to 18 months: "20% of 200,000" **

Payout after 18 months: 200,000 Baht

** I have tried to use the exact wording from her notes, so this figure should be 40,000 Baht.

I have no idea about the finer points of the contract nor it's provisions nor terms in various eventualities nor if there is any pre-existing condition clauses which I assume there is.

But this really seems like a bad deal to me.

Not knowing about pay-out in year one is an issue, I would assume there is none.

So there is a expectation to pay two years premiums of 59,200 Baht in return for 40,000 Baht with the gamble being 200,000 Baht after two more years. I have no idea if the policy continues under the same terms after year two or if there is accumulation of pay-out.

Given life expectancy at birth in 1939 Thailand was 55-60 Years she is already pushing the actuality charts for rural Thai women.

In the village where she has spent all her life there are few people (if any) in their late 70s-80s.

Personally I am having trouble convincing my wife that that this is not a good deal and that insurance companies are not magic money trees that will pay out big returns without there being some less well explained clause within the contract that takes away the big money that the sweet talking sales man/lady "promises".

As a POI there is already a fully paid-up Life Term Policy on the MIL that will pay 70% of the total premiums paid when she finally dies.

Any thoughts or comments are welcome.

Edited January 30, 2012 by Cuban

[JoePai]

Ask for the policy + conditions to be sent to you - make sure in English !

[Cuban]

Ask for the policy + conditions to be sent to you - make sure in English !

That is a very optimistic thought.

[samran]

What you are describing sounds like a terrible savings plan dressed up as life insurance.

Do the maths: what you put in and what you get out??

I'm betting you'll find that it will effectively be a negative interest rate and they'll probably refuse to pay out upon death due to pre-existing conditions.

[Cuban]

Thank you Samran. That is my feeling.