Self-employed: How do you manage your finances?

[starlight1968sg]

I am curious on why must be profitable when one dies.
Insurance is a transfer of risk and is NEVER to make money.
To make money, go for Investments.

[Anfield]

Actually, there are 2 insurance companies that offer term insurance that "almost guarantee" you will be profitable when you eventually die, as they cover up to 99 years old (which 99% of people do not live past that age).

I am on this plan with Prudential. No idea who the other one is. Strictly death/terminal illness or TPD though. Gotta take care of critical illness from some other plan.

[scang]

I am curious on why must be profitable when one dies.
Insurance is a transfer of risk and is NEVER to make money.
To make money, go for Investments.

Insurance can be both a transfer of risk as well as a return on investment, that is why many buys whole life plan which gives a pathetic 2-3% or max 4-5% returns over the entire life of paying for it.

So rather than pay a hefty sum annually for x no. of years with that return upon death or meeting a certain criteria, the same criteria can be met with a much lower premium, and the savings in premium can instead be well invested for a much higher return.

Doesn't this make it a much better "whole life insurance plan"?

[scang]

Actually, there are 2 insurance companies that offer term insurance that "almost guarantee" you will be profitable when you eventually die, as they cover up to 99 years old (which 99% of people do not live past that age).

I am on this plan with Prudential. No idea who the other one is. Strictly death/terminal illness or TPD though. Gotta take care of critical illness from some other plan.

Yes, Prudential and TM Asia.
Yes, CI is needed to be taken care of, but it is a smaller sum needed and up to 60 years.

[starlight1968sg]

Yes, Prudential and TM Asia.
Yes, CI is needed to be taken care of, but it is a smaller sum needed and up to 60 years.

Hmm... heard that TM Asia has quite a good reputation.
PS: I do not work in any financial or insurance industries.

[scang]

Yes, Prudential and TM Asia.
Yes, CI is needed to be taken care of, but it is a smaller sum needed and up to 60 years.

Hmm... heard that TM Asia has quite a good reputation.
PS: I do not work in any financial or insurance industries.

Neither do I work in any financial or insurance industries.

In fact, any form of term insurance is not "lucrative" for financial advisers or planners as the commission is very low, so not worth their time to ever recommend such plan.

The usual plan is whole life, ILP etc. which gives them substantial commission.

One criteria is of course, the person buying this form of term insurance is savvy in generating decent or good returns from their own investment.
So some form of financial education should be in place to get consistent and decent returns.

[Anfield]

In fact, any form of term insurance is not "lucrative" for financial advisers or planners as the commission is very low, so not worth their time to ever recommend.
One criteria is of course, the person buying this form of term insurance is savvy in generating decent or good returns from their own investment.
So some form of financial education should be in place to get consistent and decent returns.

Indeed, the theoretical arguments against getting any kind of whole life plans or ILP are sound, watertight even.

It's the practical behind utilizing the savings from purchasing pure term insurance for investment that's actually the problem for most people. It takes a level of discipline and financial education that many adults don't possess for various reasons.

As a means of forced savings, many adults could do a lot worse than buying whole life or ILPs.

[scang]

In fact, any form of term insurance is not "lucrative" for financial advisers or planners as the commission is very low, so not worth their time to ever recommend.
One criteria is of course, the person buying this form of term insurance is savvy in generating decent or good returns from their own investment.
So some form of financial education should be in place to get consistent and decent returns.

Indeed, the theoretical arguments against getting any kind of whole life plans or ILP are sound, watertight even.

It's the practical behind utilizing the savings from purchasing pure term insurance for investment that's actually the problem for most people. It takes a level of discipline and financial education that many adults don't possess for various reasons.

As a means of forced savings, many adults could do a lot worse than buying whole life or ILPs.

That is also a reason why these days kids, students are taught life skills like financial literacy at a much younger age like 10 years through the schools as part of CCA.

And the earlier they put into practise this form of education and good habits on a regular basis, the more savvy and more financially sound their knowledge will be.

So it is about teaching and learning and practising it as early as possible and getting them to practise it through buying of groceries, food, needs and wants, savings, spending, giving etc in their daily lives.

[Rejoin]

Investments are not without risk. I believe this point has been reiterated several times in this post.

If you're financially savvy, the optimum thing to do would be to buy a term insurance and then use the rest of your money to invest (note, I don't mean ILPs or unit trusts). Just pure investment in stocks and bonds.

[TheAnswer]

Investments are not without risk. I believe this point has been reiterated several times in this post.

If you're financially savvy, the optimum thing to do would be to buy a term insurance and then use the rest of your money to invest (note, I don't mean ILPs or unit trusts). Just pure investment in stocks and bonds.

How to invest in stocks?