The Truth about Investment Linked

I love my work.

I know some friends who work till 12 midnight. And some who come back 3am in the morning, not because they were doing the macarena swinging their hips to the music at Zouk, but they were slogging away finishing projects that just needed to be done no-matter-what.

So far, I've been up till 1 plus in the morning before 'working'. And when it comes to my work, it usually means 'talking'. That's right. My mouth is my rice bowl. Rice goes in it, at the same time it's used to put rice on the bowl.

I don't like to use the word " convince" clients. I'm not trying to con or brain wash anyone. I'm just there to educate. Just as a teacher uses his or her mouth to teach, I'm use my mouth to help people plan out their financial profile.

So far, it's been a blast.

Anyway, today I'm here to educate about the truth about investment-linked insurance policies.

If you are an investment linked policy holder, please listen carefully.

If you think you have insurance your mommy or daddy bought for you, please go find out whether you have it or not, and listen as well.

If you're none of the above, don't skip this. Read on because it's really unwise to reach the age of 30, have a family next time and still know nuts about insurance. :P


The basic reason why you get life insurance is simple.

You fall sick one day. Fever and flu. You go see the doctor. The doctor charges how much usually? RM 50? RM 70?

Does that cripple your finances? Usually not. You still have enough money to eat and live till your next pay cheque come.

You fall sick one day. two days. three days. You go see the doctor, doctor sends you hospital. You have internal bleeding. Something might be cancerous.

Let's not get into the details. It ain't a pretty thing to talk about, aye?

Doctor charges you RM 20,000 end of the day. Does that cripple your finances?

Usually, yes. You've saved your sweat and blood for the past 3 years to almost RM 10k. You give it all up, and you still owe RM 10k.

Pain or not?

Pain laaaa. hehe.

This is where insurance comes in. It pays off your RM 20k so that your savings is still untouched.
None of your hard earned money has been blown off in one night.

Investment linked policies.

It ties your insurance policy together with investments through unit trusts. Truth is, if your policy is attached with a LOT of protection, e,g, PA, 36 critical illness, medical card... and you pay a minimal amount of around RM 150 to RM 200 per month, many agents go about telling their clients that you will have a certain amount of money saved when you're reaching 30-40 plus of age.

*EHKK!*

wrong answer.

As you age, your insurance coverages increases. Meaning the RM 150 you put it every month might not be enough to cover for you when you age. The interest and dividen you get from the investment links will be used to cover for your charges till a certain number of years before you'll start to receive a letter asking you to add on more money on top of your RM 150.

so:

1st myth: I pay a number of years then I don't need to pay already.
WRONG. This type of insurance you pay till 87 years old.

2nd myth: I'll have money later on in life.
WRONG. Unless, you have minimal protection. Throw off Personal Accident, medical card, 36 critical illness. Only basic sum assured . Then yes. probably.

Investment linked is good when we have low income, but we want high protection during the early days of our working career.

There you go.

Another day I will talk about unit trust. And how you can truly maximize every cent of your hard earned money to save and accumulate wealth to build yourself a financially comfortable future.


Hmm, I hope that these recent posts about money doesn't put any of you off.

Next post will be about music. :D

Ja.