Saving

Insurance company have evolved many times over the years. It used to be just offering temporary protection. But now, it can provide whole life protection and the plans can even come with cash value. So at least in the future, if you don't need the coverage you can still get back some money or even make money.

Plans like whole life plan or investment link plan are more focus towards protection and yet they have savings component as well. So in the future you can enjoy the cash value when you don't need the protection anymore. Usually for this kind of the plan, the break even point is about 15 years, so if you surrender the plan after that period, you should expect to get back all the premium you have paid or even get more including the bonuses declared.

But plans like endowment or retirement (annuity) plan, they are focus on accumulation of wealth. Thus usually have no or little protection. These plans will give you good return (usually more than the bank's interest rate) if you keep the plans until the maturity period. 

Is this a plan that you should consider?

A definite yes for everyone, from young to old.

Some of the plans that are available in the market:

1. Whole life plan - Usually pay for certain number of years and you receive lifetime protection plus the cash value. The cash value will consist of guaranteed portion and projected bonuses. This plan has less risk but conservative return.

2. Investment link plan - Usually pay for certain number of years and you receive lifetime protection plus the cash value. The cash value is totally non guaranteed as it depends on the performance of the funds that you choose. This plan has high risk but higher potential return.

3. Endowment plan - Usually pay for certain number of years and you receive some protection during the endowment period. By the end of the period, you will receive all the cash value. The cash value will consist of guaranteed portion and projected bonuses. This plan has moderate return.

4. Retirement plan - Usually pay for certain number of years and the insured will receive monthly/annual pay out from certain age (E.g. age 65) until the insured reach certain age (E.g. age 85) or the insured passed away. The plan may payout lump sum bonuses as well at some point so the insured can enjoy more money during retirement. The cash value will consist of guaranteed portion and projected bonuses. This plan has moderate return. 

Tips: When you save, really save a good amount so that you can live and reach your dream goals.