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| Thread ID: 93681 | 2008-09-27 05:00:00 | Life insurance question re: surrender value | Nomad (952) | PC World Chat |
| Post ID | Timestamp | Content | User | ||
| 708136 | 2008-09-27 05:00:00 | Hi, I am looking after something for others. Re: life insurance with a investment component should they wish to pull out prior to maturity date, is that the premiums paid minus surrender value = what they are left with? Thanks. |
Nomad (952) | ||
| 708137 | 2008-09-27 05:02:00 | In my experience with life policies that also have an investment component, if they are redeemed prior to maturity date, you get out less than you put in. Substantially. | johcar (6283) | ||
| 708138 | 2008-09-27 05:31:00 | Yeah .. I just wanna check if that formulae is correct. From what I read as eg., if total premiums paid is like $20k, $15k is surrender value so yeah .. they lose 75% of it. Substantial. The investment life insurance things are not the best things and the other thing is each year they hike their premiums up .. so they are thinking to cut their loses and just accept ... |
Nomad (952) | ||
| 708139 | 2008-09-27 08:30:00 | Is this policy in question an Endowment? Does it participate in bonuses? | the_bogan (9949) | ||
| 708140 | 2008-09-27 10:16:00 | Yeah its gotta bonus of some sort if you been with them for 6+years which they have. Or is the formulae .. total investment amount minus surrender value = what is left for the withdrawer. Obviously they will forfeit their life insured cover. |
Nomad (952) | ||
| 708141 | 2008-09-27 10:29:00 | mmm... The average Endowment generally won't get a withdrawal value for the first couple of years. The cash value is a proportion of the sum insured and bonuses. This proportion will increase as the term goes on. (e.g 30% half way through the term, 60% two thirds through). From what you described though, it might not be an Endowment. More of a unit linked type investment with life cover. |
the_bogan (9949) | ||
| 708142 | 2008-09-28 07:32:00 | You normally get the surrender value - $15k | decibel (11645) | ||
| 708143 | 2008-09-28 08:21:00 | That sounds vague. | the_bogan (9949) | ||
| 708144 | 2008-09-28 23:30:00 | It depends on the Policy, in the unlikely event that it is one of the old style whole of life or endowment policies, there will be a surrender value, which is likely to be less than the premiums paid to date, this is because these policies take about 10 years to break even, as all the charges are up front, the commission component being close to the first years premium. The company concerned will need to advise you of the value. If the policy is an investment linked policy, then there is a Unit rate that is usually published which will give you a cash value for the units, however, there are typically two types of Units in these policies, initial and investment, and the quoted rates are for Investment units.The value of the Initial units depends on how long the policy has been running, as you will get a lot less for these for early surrender - the same up front charges, although they are not as severe a gouge as the charges for the traditional policies. The message on insurance investments is reasonably clear, if you are not in for the long haul, stay away, as the commissions, set-up charges and administration fees take a sizable chunk of the first two years' premiums, and early withdrawal is likely not to leave the "investor" with a warm fuzzy feeling. |
KenESmith (6287) | ||
| 708145 | 2008-09-29 01:04:00 | Talk to their Financial Adviser. The Financial Advisers Bill which was passed under urgency last week procludes anyone from giving advise (talking about the policy) without first giving the client a Disclosure Document and ensuring that the client understands the implications attached to any advice they may act upon. |
theother1 (3573) | ||
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