During the past 20 years, many life insurance companies have introduced products with exotic terminal bonuses. These bonus rates do not follow any rational pattern. They are jacked up at certain durations, usually 20 years and later, to make the return look attractive. The insurance agents are trained to sell the attractive returns to the consumers by "explaining" these figures.
Many consumers ended up with poor returns. If they terminate the policies before the "magic" durations, they lose out on the terminal bonuses and get a poor cash value. Those who waited for the "magic" durations may also be disappointed. If the investment markets fell, the terminal bonus rates were also taken away. After all, they were not guaranteed.
In an environment where the terminal bonus rates could be changed so easily, and could be made different for different groups of policyholders, it is difficult for policyholders to "trust" the terminal bonus rates. It is better to avoid these types of policies.
It is better to invest your money in low cost investment funds, which are more transparent. You are likely to get a higher return. Read this FAQ:
http://www.tankinlian.com/faq/savings.html
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