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Sunday, 25 May 2014

Dumbest Insurance - Life Insurance for Child

Life insurance for a child ranks to me as the dumbest Life insurance policy out there.

These policies are never bought; only sold to.

From one salesperson to another, must give a round of applause for these super salespersons - these are the ones who can sell ice to Eskimos!


Take a step back and press reset for a moment:


1. Are you a dependent of the child?

2. What is the coverage for? 

a) To benefit from your child's passing? 

b) To pay for an elaborate and grand burial for all to see?



If your motivation is fear that your child may catch an illness or accident, wouldn't a Critical Illness and/or Hospital and Surgical plan be better? 

Or perhaps you want to give your child a better future, wouldn't a Savings or Education Fund be better?


Of course you will never be sold Life insurance for a child by itself.

If you are a student of the recent sub-prime meltdown, you would understand the wonders of packaging and repackaging of financial products until everyone looses sight of the unsavoury bits.

What you really wanted were the medical benefits and savings plans for your child - your motivation is love. 

What you never bargained for was as part of a set menu, you got something you never needed in the first place - greed and ego were never part of your motivations...


If you knew what you knew now, you would have gone a la carte.
   



27 comments:

  1. What if you are going for an extra step by protecting what he or she has for your future grandchildren or dependent instead?

    ReplyDelete
    Replies
    1. B,

      1) May I know your definition of a child?

      2) I don't like hypothetical examples, but If your parents are looking after the "interests" of your child (their grandchild) by taking out a policy on you, how does that make you feel?

      You can't earn your own keep?

      You can't be "trusted" to take care of the needs of your own child?

      Forgive me for using "you"; hypothetical scenarios are meaningless if the focus is not what we would do or feel ;)

      Delete
    2. Hi SMOL

      Nah... just a hypothetical question with a hypothetical answer.

      Im just saying thats probably the only reason insurance agent can use when selling the products to parents. In fact my insurance agent did just that.

      I understand where you are coming from. We need to truly understand the objectice of a life insurance and the definition of a dependant. I do have a life insurance insured against myself as the head of the family now but I wouldnt want to take up life insurance for my kid anytime soon.

      Unless somehow I hv extreme loads of excess money even after giving back to the society ;) maybe?

      Delete
    3. B,

      Of course I knew that argument of grandchild can only be put forth by a snake-oil salesperson. Buy early premiums are cheaper!

      No parent would look at their 5 year-old child and start thinking about grandchildren!!!???


      Hey! Your money you're the boss!

      Some spend on horses, some on whores and hookers, some on watches, some on fast cars.

      I'm not a billionaire. But I wonder why billionaires want to buy Life insurance for? Of course it makes sense in countries where there are high estate taxes. But in Singapore?

      Like you said, got extra money we can do whatever we want!

      Delete
  2. Replies
    1. CW,

      Hear! Hear!

      That's why it's never bought or requested by the customers; it''s only sold to ;)

      Of course no one would sell ice to Eskimos. We sell ice kacang!


      Delete
  3. I know how it can be sold to:

    1) we never know when, touch woods, will your child be diagnose with some illness and by then, it will be too late to even buy a life plan, it is already covered at a young age, no matter what happen.

    Me: buy H&S for kid now la. Next time, he can be covered no matter what, plus CI term plans if u like.

    2) in the Longer run of more than 20 years, the yield of life plans and endowment plans are the same. But u get higher death and CI BENEFITS.

    Me: true, if u decided that a paid up policy at 25 years is what u want for your kid, and that he can redeem it when and when he wants.

    But if, providing for uni is what u want, go for plain uni saving plans. They have better drawn in

    ReplyDelete
    Replies
    1. silly investor,

      Sounds like experience talking ;)

      You have correctly described our sales misdirection technique.

      Distract the customer from what he really needs and keep the focus on how much the customer is "saving" or "winning" by choosing the set menu - look at the discounts and extra benefits compared to the a la carte selections!

      Human nature will sooner or later kick-in - free, extra, lower... irresistible!

      That's why I use the word "motivation". If we forget why we wanted insurance in the first place, we get sold to.

      Delete
  4. If you are really so desperate to provide your child CI benefits etc, just buy him/her the Aviva NS group term insurance or NTUC i-term. This is something your agent will never sell you

    ReplyDelete
    Replies
    1. Chan Yuan,

      Woah! What a strong choice of word - desperate?

      Simmer down.

      I believe you meant well. But your "help" is not much different from us snake-oil salesperson - this is the cheapest, this is the bestest, this is the mostest - for you, and you, and you...

      Cheapest may not be the best fit. Everyone's situation is unique ;)

      Help the parent rediscover his/her original motivations, and they will be able to make their own decisions.

      That's what a snake-oil salesperson who wears the white hat will do. Unfortunately, in a commission-based structure, we will starve.

      So some wear both hats - white and black.

      And do the Robin Hood thing.

      Some doctors and lawyers do that too ;)

      Delete
  5. no, not insurance again!

    buying insurance is almost like buying 4D, want to pay small and get big! basic strature are the same.

    pay your own fee la! expecting some else to pay for you?

    ReplyDelete
    Replies
    1. please don't say you are hedging against your own health or life, no money is enough for that! live and let die!

      Delete
    2. coconut,

      Me opting in for all the basic public social insurance schemes is answer. Plain vanilla is good enough. The rest I can pay my share.

      You may want to tone down the pay our own rhetoric. We are in a comfortable position now; do think of others who are not in our situation.

      I see some bleeding hearts cry murder when they see senior Singaporeans collecting cardboard cartons or clearing dishes at food courts. But when it comes to Eldershield, opt out as it does not benefit the well to do...

      So the Robin Hood talk is just empty talk... Deep down you only care about yourself - so financially literate! So very de smart!

      Delete
    3. ofcos if one has the mentality of someone will take good care of us, for example the govt or social or whatever, what can we say?

      so in a sense human are advancing is just an elusion, our whole structure is actually very weak. complex but weak.

      Delete
    4. and what? tone down? i'm not a snake oil salesman!

      i say whats is in front of me.

      Delete
    5. coconut,

      OK, OK... LOL!

      Sing along now:

      Mancho mancho man. I gotta to be, a Mancho man. Mancho mancho man....

      Delete
    6. look!

      the most disater right now is our health issue, over worry that is! you spend all your fortune just to prolong a little of your life, is it worth the worry? can we face the fact that is playing right in front of us?

      bottom line is you still going to die anyhow, so live happily without much worry.

      Delete
    7. coconut,

      We can't have space without matter; nor matter without space.

      You are not alone.

      Your outlook is embraced by the Tao and Zen community ;)

      For a man without screws, you are quite Awaken!

      Delete
    8. its a bit like trading, you know the worst and prepare for it (not avoiding it), meantime you trade to lives and survive and not to worry over it.

      we have too much worry in our mind and it is getting worst and worst, thats what i observe with other people.

      Delete
    9. so if you care for your health, don't be fearful. and if you care for your life, don't be fearless.

      Delete
    10. coconut,

      If we can't stand the heat of the kitchen, we should stay out of it.

      There is eating out, da bao, outsourcing as in hiring a maid to do the cooking, etc.

      Cooking is "play" to some; "work" for others.

      If DIY investing or trading is "work", it won't be sustainable.

      Just like blogging ;)

      Delete
    11. "so if you care for your health, don't be fearful. and if you care for your life, don't be fearless."

      Bloody hell!

      You are doing a crouching tiger hidden dragon on me!!!

      Did you just say it yourself or copying it from somewhere else?

      That's a brilliant saying!!!

      Delete
    12. hey you know me, if i copy i will put something like this, "...." - xxx.

      brilliant mah?

      is like a commander saying to his soldier before charging, if you love your country, don't be afraid, but if you love your own life, i'll put a bullet in your head!

      Delete
    13. either way, you know whats going to happen next don't you if you are the soldier.

      Delete
    14. coconut,

      I do a slight bow and hands pressed together, palms touching and fingers pointing upwards, thumbs close to the chest.

      Namaste.

      In Hinduism it means "I bow to the divine in you."

      During Zen combat, we poke, we question, we thrust until someone gives me a whack on the head - "wake up!"

      I am nursing a big baruku on my head now...

      Thank you :)

      Delete

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