Life Insurance or Retirement fund? (Thread 2)

[wifey]

^thanks a lot sis!

[missreese]

mga sis.. need your opinion..

i have preneed contract under Philplans [NOVA 20], 5 years to pay siya and contract price is 100k. Okay bang ituloy ituloy ko na lang to? Naiinis ako sa sarili ko basta na lang ako pumipirma masyadong tiwala sa agent.

My mom is already 66 years old and ganito din yung policy niya, dapat pa bang ituloy tong sa nanay ko?

[ikaela]

^You and your mom each have that plan? Naka-ilan years na kayo?

Did a quick search on that Nova 20 plan and in short, what it does is turn your 100k to 165k within 20 years. That's an annual interest rate of 2.54%. Sure, that's higher than big banks' time deposit rates, but it still doesn't beat our average inflation rate. In the end, you'll be losing money in that product.

At 20k premium per year, you can get a much better insurance + investment aka VUL product for yourself.

The one for your mom though is okay, because it'll help a little bit with her pension. It'll also give her a bit more insurance coverage or add to her existing one.

[missreese]

^nakaka 1 year pa lang kami... Do you think na okay ko pa ituloy yung saken? or mas better ilagay ko na lang sa mutual fund?

[ikaela]

^Math says yes, it's better to discontinue, get a different life insurance with better coverage (if you don't have it already), then put everything else in a mutual fund. Even the most kulelat equity mutual fund beats the return of that Nova20 plan. A loss of 20k now is minimal compared to the next 15-20 years you'll spend regretting not having invested in something that would've given you much better returns.

But it also depends on certain things. Kakailanganin mo ba yung 5k na "pension" every year? Insurable ka pa ba? Kung hindi na, sayang din kung mawala pa yung insurance mo sa Nova20 lalo na kung wala kang ibang insurance. Andyan din dapat yung discipline na mai-invest mo nga sa mutual fund yung 20k every year at hindi magagastos sa ibang bagay.

[mameejhy]

100k can be easily turned to 165k via stocks in less than 1yr.

[missreese]

^so it's better to discontinued? i'm still thinking pa din.. gusto ko na lang siya ihinto, humanap ng mas maganda life insurance alam ko sa 15k maraming magandang policy na. Pero iniisip ko din yung kay nanay ko... baka ito na lang yung icontinue ko.

[etxetera]

100k can be easily turned to 165k via stocks in less than 1yr.

Kung maganda ang performance ng stocks at kung marunong ka pumili ng stocks na bibilhin.