Thai life/health insurance.

[Travelighlty]

My Thai GF has life/health insurance she is paying 70,000B a year for her and her son. This is paid through her bank. She's 40. He's 17. It's 70,000B a year for 15 years. After 15 years, she gets the cash back that she has paid in is what she told me. This amount is almost the total amount of her yearly savings after living expenses. Works out to about a million Baht over the 15 years. Considering inflation at maybe 5% a year, her funds would be worth about half or so. After 3 years, if she dies, her family would receive 300,000 Baht. She says this is very popular insurance with Thais. I'm not so sure it's such a good deal. It's through Bangkok Bank. While I appreciate her dedication to her family, it didn't sound reasonable to invest almost her entire yearly savings on this sort of insurance. Does anyone have any experience with this type insurance? Is it a reasonable return on her investment? I'd just like to see her buying insurance in a sensible way. Thanks in advance for any thoughts on the topic.

[allane]

I have always read and been told that one should only buy term life insurance; i.e. spend as little as possible, to purchase only basic insurance, and for a fixed term. In 1996, (at age 39) I bought a 21 year term policy in Thailand which costs me about B 23,000/yr., and includes basic health insurance. As long as I have no claims, I get a rebate of B 10,000 every three years. Given that your girlfriend is 40 and female, B 70,000/year sounds like a high premium. Perhaps she should find a basic term life insurance policy where the premium is half of what she is paying now, and invest the other half in something else.

[stevenl]

You're looking at it only from the life insurance perspective, and I agree it does not sound like a good plan, but presumably there is also a health insurance part. And the premium for that is included in the 70k you mention.

So that good the real premium of the life insurance part you'd have to deduct the health premium from the total premium.

[Travelighlty]

Thanks for your input, Allane and Stevenl. She's convinced this is what she wants to do.