Keep your existing life policy

Hi Mr Tan,
I bought a poilcy in 1998 to cover critcal illness for 100k. I pay $2200 yearly ( $1600 and $600 for the rider) under a Prime Life policy.


I have to pay till the end of time (i.e. death) for this coverage. Recently was shown another policy which I only pay 20 yrs ... for about the same coverage.


It is strange that the investment outlook was better 12 years ago compard to now and interest rate was much higher, and yet the insurance company can introduce a better produuct now..


If I terminate the plan, I will lose 10k.... but if I keep paying I will breakeven estimated at year 25. Should I change to the new policy?

MY REPLY
My advice is: never terminate an existing life policy to buy a new policy. You will be paying the high upfront  cost all over again.You are right that it is not a good idea for the consumer's point of view. It is sad that the insurance agent want to earn commission at the expense of the customer, by asking the customer to switch to a new policy.

I have explained the reason in my book, Practical Guide on Financial Planning. I hope that you have bought it and will read it. Also, you can introduce my book to your family and friends and encourage them to read it. The book can be bought at www.easysearch.sg/ishop