Insurance's Cash Value Hype

Can you use the cash value in your Investment-link insurance policy?

Insurance agents often sell policies packaged as “Medical Card + Savings.” But can you actually use that savings?

The truth is, that savings isn’t meant for you to use.

As we all know, insurance costs increase over time. The older you get, the higher the cost to insure you.

For example:

• Age 25: Insurance cost is RM100, but you pay RM180. The difference goes into your cash value.

• Age 30: Insurance cost is RM190, but you still pay RM180. The difference adds to your cash value.

• Age 40: Insurance cost is RM250, but you still pay RM180. The premium shortfall is offset by your cash value.

• Age 55: Insurance cost is RM500, but you still pay RM180. The premium shortfall is offset by your cash value.

One way to combat rising medical costs is by using the cash value to offset medical inflation.

So, don’t use the savings unless it’s an emergency. Remember, touching the savings now will lead to very high insurance costs later in life.

In conclusion, an insurance policy is not an efficient tool for growing your money. It is meant for protection. To grow your money, invest wisely in good Unit Trust funds – but remember, not all funds are good.

By: adezeno