Whole life insurance is a financial product which many of us own or are recommended by banks and financial planners. Recently, I came across a 15 year premium whole life product with a sum assured of $100,000. Its annual premium is in the region of $2,155. It got me thinking: Are there ways to obtain better returns, at lower risk but with the same amount of sum assured?
For whole life insurance, it is a combination of term insurance and an investment component. And while the benefit illustrations of this product states the projected returns are 4.75%, the actual return calculated from the table will be slightly lower, around 4.2% to 4.5%.
Creating the Common Man’s DIY Insurance
Jerome (age 27) decides to create his own product which replicates a similar 15 year premium whole life. To replicate the components of whole life, he does the following: ......