Avoid switching to another high cost policy

Dear Mr. Tan,

I would like to seek your help and advice on the policies which i purchased from X a few years back. I am 25 years old and started work 2 years ago. I bought my first Protection policy in 2002. Later, I bought a Living policy in 2006.


Recently a few insurance agents advised me to terminate my policies with X. They said that I am paying a very high premium for my policies. Especially for the Living policy. Two agents from Y and Z offered an alternative policy at a lower premium.


I have been reading your blog and am curious if I am really paying a costly price for my policies under X? Due to the high living standard in Singapore, i would like to spend my money wisely and purchase the most competitive policy in the insurance market.


Should I terminate my policies with X and buy the policy recommended by Z? Is there any other alternatives which i can look into?
G


REPLY
As a general guide, you should not terminate a policy and buy a new policy from another agent. Each time that you buy a policy, the agent earns big commission that takes away two years of your savings. I suggest that you approach the insurance agent from X, and ask for his or her advice, on whether the agents from Y and Z are giving you proper advice.


If you wish to make a change, you should buy a low cost term insurance and invest your money in a low cost investment fund. Low cost means that there is no adviser who earns a lot of money from giving you the advice.


Read this FAQ:
http://www.tankinlian.com/faq/savings.html