Insurance
Gasp! I’ve gone half-naked!
By Singapore Man of Leisure  •  September 1, 2012
Yesterday, I went down to the AIA tower at Robinson Road to cancel my Life insurance policies.: Term, critical illnesses, disability, and personal accident. The only one that I've keep is the remaining whole-life policy that may "break-even" in 2 years' time at the 20 year anniversary mark.  But looking at the surrender cash value today, its far behind the projected cash value when I first signed up for it age 27. May have to wait for a few years more to break-even due to the current low interest environment... This is not a rash decision. Insurance is great to create an immediate networth when I was age 27.  It's a bit like playing options: we speculate on a high probability that we will "lose" small money (make no insurance claims), to benefit from a low probability that we will "win" big money (Choy! And double choy!) OK, whole-life insurance is another animal. It's more a play on your inflation expectations (why would you buy insurance if you no faith on your government with the printing press?) and more a savings plan for conservative (or clueless) savers. For example, savvy Indonesian insurance buyers who bought whole-life policies in Sing dollars rather than in Indonesian rupiah 20 years ago would have "won". Those who chose US dollars would have "lost"... (and praying hard US don't devalue their currency even more!) Now why no one told me at age 27 that I need to have some ideas on inflation expectations, yield comparisons from alternative investments, and some forward currency views!?  The good news is that after 18 years of hard work and pure dumb luck, my net-worth today is now more than the "created" instant net-worth from my insurance policies. So the policies have served their purpose and are now "obsolete". I have no desire to "profit" from my lost. But more importantly, I am at peace with myself. I know my own medical and family's history. And in the event that I'm diagnose with a serious medical condition, I know what I would do. If it's terminal, I'll focus on palliative care than expensive "Hail Mary" medical procedures. It's interesting what doctors and nurses would choose themselves knowing what they know. If it's wear and tear replacements, with medishield and medisave, I should be able to afford them. Class B2 is OK with me. That the benefit of being a care-giver now. I've base my observations and decisions on personal experience rather than hearsay. I am pleasantly surprised that mom's medical costs were quite affordable after the medishield and medisave deductions - and she is a full-time housewife all her life. (OK, for families that earn less than $2,000 per month can be a different story... Hence I count my blessings daily.) I exercise (I'm a walker - no, not that kind of street walker! I walk 1.5 hours average per day), and go for my annual medical health screenings (early detection increases my odds of recovery).  My vice is I eat "unhealthy". Baby steps. I've never understood why millionaires have life insurance policies. Once upon a time when there was estate duty I understand. But putting my salesman hat on, the answer is crystal clear. Cheers to all the million-dollar-round table members!
Singapore Man of Leisure (welcome to my blog; just google it!)
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By Singapore Man of Leisure
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