Anticipated endowment sold badly

Thomas Phua posted this comment in my blog. I have edited it.

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ANTICIPATED ENDOWMENT POLICY

The sales pitch by the bancassurance agent is "Auntie, you put $4000 a year and every 3 years you receive $3000, this is better than interest.

Sounds good and logical.

The auntie who fell for the sales pitch is 53 years old. For the next 21 years, each year she has to pay $4000 and every 3 years gets $3000. At the end of 21 years, the maturity will be much less than the total premium. Can she continue to pay the premium until age 74?

I hope the bancassurance agent will have some consideration for old folks who walked into the bank. These are hard earned money of old folks. Bear a thought for them. There are other ways for you to make your sales and earn your commission.

Thomas Phua