059 Which market has performed YTD?

Almost all markets were hit during the 2014 year end oil price slump. As we move into 2015, we were bugged by Greece issues until recently where ECB finally agreed to extend their financial help.

So for the last few months, investors were reluctant to invest because of uncertainty.

If we make a comparison of market performance, we notice Japan has been on the up trend. China has face some correction but has bounced back. I think another market we can look into is India. India market has been going up since bottoming in Jun.

I am into India funds.

058 A case of putting too much into insurance savings plan

Recently met a young lady. During the talk, she admitted she has a few insurance policies. She is unsure the content of the policies. She bought them just to support her friends.

I was intending to introduce her to do regular savings. She has to schedule her payments because she has just paid one and another is coming soon.

So, I asked for her policies to study. Well, she has 3 policies. It appears one of them is participating life insurance plan. This seems fair to me. The other two are actually five-year-paying and eight-year-paying savings plan. The commitment for these 3 policies is more than 10%of her annual salary. No wonder she feels the pain of paying.

Apparently, she doesn't have coverage for medical expenses, critical illnesses and accidents. All these coverages seems basic to me. Unless a client really insists on NOT having one, then everybody should have a decent coverage amount.

Upon rough analysis, the savings plan only generates her a rate of return of about 3% p.a. over a period of 15~20 years. If she has channel the money into investment, she can expect a fairly higher return.

A study of regular savings plan into performing funds over a ten year period showed an investor's money would have roughly doubled. If an investor put off a lump sum ten years ago, his money would have grown 1.5x~4x.

Time is indeed investor's friend.

Coming back to this lady. It is now her choice to continue her policies and be left without other basic coverage; or she could opt for some general insurance coverage temporarily until she made a decision.

I feel sad to see such situation. Client's policies has no cash value and she feels pain to simply let go. But to carry on means she has to carry the "burden" and at the same time wasted her opportunity. I think all insurance agents should go for need based selling where we sell the plan needed by clients.