Tan Kin Lian's Blog: Whole life "Umbrella" policy

The taxi driver who drove me to the airport told me this story. 30 years ago, he wanted a life insurance policy that pays him at age 55. The NTUC agent sold him the Umbrella policy. When he read the policy documents many years later, he was angry. The Umbrella policy required him to pay premium for 55 years, rather than allow him to collect his money at age 55. He found that the premium was very low, so he did not raise a complaint.

When he reached age 55, he was told that he could surrender his policy for more than $50,000. The increase in the surrender value each year was more than 9%. (I do not know if this figure is correct, but that was what he was told). The sum assured was $100,000 and the accumulated bonus was more than $20,000.

He then realized that it was a good life insurance policy and decided to keep it for as long as he could. He was still earning an income as a taxi driver. It allowed him to give more than $100,000 to his wife, if anything happened to him. He said that the NTUC agent had recommended a good policy to the customer, although this was not explained well at that time.

He recommended his son to buy the Umbrella policy, but found that it was no longer being sold by NTUC Income. To buy a similar coverage today, the premium would be a few times higher. (Again, I am not sure that he is given the correct figure).

I told him that I was running NTUC Income at that time.?

Source: http://tankinlian.blogspot.com/2012/10/whole-life-umbrella-policy.html

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