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  1. #21
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    Default Re: Life insurance conundrum

    Quote Originally Posted by Marcochezzi View Post
    Yes and yes, self employed, no group risk cover..
    If you cannot get the current policy adjusted as suggested earlier:

    Well, if your partner also has adequate retirement savings, an option could be to explore using your own adequate retirement savings to "self insure" for medical related death at least for dependants needs. Won't help much with disability unless you have excessive retirement savings and can afford to then access your retire savings as needed at 55 or whenever later, if you do get a health related disability. You can maybe then get accidental life and disability cover maybe, which would not be based on your current health and be reasonably cheaper. What you then save on not paying the current life policy, minus the new accidental life policy, you then put into your retirement savings.

    Explore the above with a financial adviser.
    Last edited by supersunbird; 2020/01/19 at 03:24 PM.

  2. #22
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    Default Re: Life insurance conundrum

    I am not an adviser, but can recall little bits of what I bumped into.

    With the little bit of info available it is impossible to give an informed opinion.

    However, I get the feeling you were sold an increasing term assurance policy with exceptionally high cover at inception, which escalated year on year. These products looked very attractive at the outset, but became unaffordale in the later years. These products can be compared to car or house insurance. Every year you pay for the cover you enjoy for that year, and if you did not claim you "lost" out on premiums paid. I hope your policy is not this type, but rather the type that acquired a surrender value.

    Many of those policies I refer to were popular with salespeople because the bits of commission based in the premium increases generated an annuity income as long is the policy stayed in force.
    Last edited by Poen; 2020/01/19 at 06:04 PM.
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  3. #23
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    Default Re: Life insurance conundrum

    Quote Originally Posted by Poen View Post
    I am not an adviser, but can recall little bits of what I bumped into.

    With the little bit of info available it is impossible to give an informed opinion.

    However, I get the feeling you were sold an increasing term assurance policy with exceptionally high cover at inception, which escalated year on year. These products looked very attractive at the outset, but became unaffordale in the later years. These products can be compared to car or house insurance. Every year you pay for the cover you enjoy for that year, and if you did not claim you "lost" out on premiums paid. I hope your policy is not this type, but rather the type that acquired a surrender value.

    Many of those policies I refer to were popular with salespeople because the bits of commission based in the premium increases generated an annuity income as long is the policy stayed in force.
    I feel some of these are bordering on being criminal. Surely these companies/brokers could predict that those type of escalations would become unattainable, and if no surrender values linked to it, becomes a sinking ship for the member.

  4. #24
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    Default Re: Life insurance conundrum

    Quote Originally Posted by SAND View Post
    I feel some of these are bordering on being criminal. Surely these companies/brokers could predict that those type of escalations would become unattainable, and if no surrender values linked to it, becomes a sinking ship for the member.
    They probably used optimistic income growth forecasts.

  5. #25
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    Default Re: Life insurance conundrum

    Quote Originally Posted by SAND View Post
    Surely these companies/brokers could predict that those type of escalations would become unattainable, and if no surrender values linked to it, becomes a sinking ship for the member.
    But, if the client reaches the limit of affordability and bails, all the insurers lose is the forward premiums, and they get to keep all the past premiums, leaving the poor client up a creek without a paddle.
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  6. #26
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    Default Re: Life insurance conundrum

    Quote Originally Posted by JohnnoK View Post
    But, if the client reaches the limit of affordability and bails, all the insurers lose is the forward premiums, and they get to keep all the past premiums, leaving the poor client up a creek without a paddle.
    .
    (Double post)
    Last edited by SAND; 2020/01/20 at 05:27 AM.

  7. #27
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    Default Re: Life insurance conundrum

    Quote Originally Posted by JohnnoK View Post
    But, if the client reaches the limit of affordability and bails, all the insurers lose is the forward premiums, and they get to keep all the past premiums, leaving the poor client up a creek without a paddle.
    Exactly
    Its to their benefit to almost ensure it will become unsustainable

  8. #28
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    Default Re: Life insurance conundrum

    Quote Originally Posted by SAND View Post
    Exactly
    Its to their benefit to almost ensure it will become unsustainable
    If this is the scenario you find yourself in, your financial adviser or broker wasn't very good. Or, they didn't predict a loss of income. Maybe when you took it out originally it wasn't a problem. I suppose you need to re-evaluate every year, and ensure that your stuff is correct.
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  9. #29
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    Default Re: Life insurance conundrum

    Gents thank you all for your feedback.

    Whatever I have is being evaluated as I type, however it pretty much looks like a lost cause, sadly I might well have been take for a ride, and yes it could have been unethical, but its probably too late now, need to lick my wounds and move forward, once I get the results of the test so to say...

    Will keep this updated as soon as the results are in..
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  10. #30
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    Default Re: Life insurance conundrum

    Quote Originally Posted by JohnnoK View Post
    But, if the client reaches the limit of affordability and bails, all the insurers lose is the forward premiums, and they get to keep all the past premiums, leaving the poor client up a creek without a paddle.
    Exactly.... worse thing is I remember clearly asking my broker the question about the possibility of that very thing happening 10 years ago if not more, and now here I am... go figure...
    Last edited by Marcochezzi; 2020/01/20 at 04:58 PM.
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  11. #31
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    Default Re: Life insurance conundrum

    Quote Originally Posted by lizardalpha View Post
    If this is the scenario you find yourself in, your financial adviser or broker wasn't very good. Or, they didn't predict a loss of income. Maybe when you took it out originally it wasn't a problem. I suppose you need to re-evaluate every year, and ensure that your stuff is correct.
    Yes, you are 100% correct.. Sadly my broker lost his 16 year old son to suicide last year, I lost some money, bet I don't need to say who's loss hurt the most....

    However, I'm lucky you know, so far life has given me more than it has taken, so right now we need to analyze the results, and move on, I'm still ahead in the game..

    I was fortunate to meet with Imvubu today, the meeting was good and the results & outcomes will be what they will be, at the end of the day I have already made peace with it, no need for me to keep pissing in the wind..

    We learn daily, and groups like these mean we all become a little more clever each day..
    Last edited by Marcochezzi; 2020/01/21 at 05:54 AM.
    Every dog has its day, and those with broken tails have their weak-ends...

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  12. #32
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    Default Re: Life insurance conundrum

    These insurance companies are criminal!
    Any air head looking for a quick buck can go do the required exam and it gives you access to selling the companies products. Even doing the FSP exam to sell their investment products has very low pre-requisites. I personally know people, even socialize with them, that sell products for all the big insurance companies that can't even look after a goldfish!
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  13. #33
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    Default Re: Life insurance conundrum

    For exactly the reasons stated that you loose all your premiums paid if you cancel a life policy do I no longer have any life insurance (apart from my group cover that is), I burned my fingers with this at a very young age fortunately so I did not loose that much. I now take out retirement annuities, they pay out when you die in any case and if you stop the policy your contributions are not all lost.

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  14. #34
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    Default Re: Life insurance conundrum

    Unfortunately the “previous generation” retirement annuities also ripped the investor off in terms of maximum term contracts to maximize commission.

    Unit Trust companies were never guilty of this dubious practice.

    Let the buyer be aware - commission driven transactions are often synonymous with misrepresentation for personal gain.
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  15. #35
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    Default Re: Life insurance conundrum

    Quote Originally Posted by Miems View Post
    For exactly the reasons stated that you loose all your premiums paid if you cancel a life policy do I no longer have any life insurance (apart from my group cover that is), I burned my fingers with this at a very young age fortunately so I did not loose that much. I now take out retirement annuities, they pay out when you die in any case and if you stop the policy your contributions are not all lost.
    Miems please consider me a noob, what exactly do you mean by group cover??
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  16. #36
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    Default Re: Life insurance conundrum

    Quote Originally Posted by Marcochezzi View Post
    Miems please consider me a noob, what exactly do you mean by group cover??
    Employer, I'm sure she meant group risk cover.

  17. #37
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    Default Re: Life insurance conundrum

    Quote Originally Posted by Marcochezzi View Post
    Yes, you are 100% correct.. Sadly my broker lost his 16 year old son to suicide last year, I lost some money, bet I don't need to say who's loss hurt the most....

    However, I'm lucky you know, so far life has given me more than it has taken, so right now we need to analyze the results, and move on, I'm still ahead in the game..

    I was fortunate to meet with Imvubu today, the meeting was good and the results & outcomes will be what they will be, at the end of the day I have already made peace with it, no need for me to keep pissing in the wind..

    We learn daily, and groups like these mean we all become a little more clever each day..

    Cant you maybe share what you guys found and what was the best solution and the way forward? for all to learn...

    thanks

  18. #38
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    Default Re: Life insurance conundrum

    Quote Originally Posted by Miems View Post
    For exactly the reasons stated that you loose all your premiums paid if you cancel a life policy do I no longer have any life insurance (apart from my group cover that is), I burned my fingers with this at a very young age fortunately so I did not loose that much. I now take out retirement annuities, they pay out when you die in any case and if you stop the policy your contributions are not all lost.

    The problem with that is that your cover will be low initially. I have group cover from work. I have pension. I have another RA, and I have life insurance. The life insurance is only there to assist my wife should I unexpectedly die tomorrow. Lets say I have been paying 1000 bucks per month, on average, for the last 8 years. It means I have paid about 96 000 for life insurance. If I die tomorrow, she gets almost 20x that amount from just my life insurance alone. If I die when I am 80, well then the other way might have been better. Thing is, you need to mitigate risk, and not have all your eggs in one basket. Should I no longer be able to pay life insurance, and I need to cancel it, I can write off the 96k, it's something I knew before I took it out.

    It's like people putting away money rather than having a medical aid. It can work great, if you don't get seriously ill 2 months later. But if you do get seriously ill, then you kinda screwed.

    So, for me, I reckon the following stuff is horrible, but better to have than not. Also, keep in mind, it's better to start with these thing at a young age, to avoid penalties and exclusions, and hell, before you let them lapse due to financial pressure, please cut costs elsewhere. You can't say you cannot afford insurance but yet you party every weekend, and smoke like chimney, and watch dstv.

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    4) Funeral cover ( same as above)
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  19. #39
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    Default Re: Life insurance conundrum

    Quote Originally Posted by m0lt3n View Post
    Cant you maybe share what you guys found and what was the best solution and the way forward? for all to learn...

    thanks
    I absolutely will share, with product detail, what the situation is just as soon as I am given feedback, but in brief the following is what transpired over the last 10 or so years of my boring life..

    So I took out life insurance +10 years ago, it was taken out as I had "merged" with the company I stared with SWAMBO some 21 years ago. This was in light of the fact that I am risk averse and I did not want to risk pain on my family with the potential loss of income (I had just left the corporate world which means no pretty salary with benefits..) should the proverbial sh1t hit the fan.

    I was sold into Momentum Myriad product, the detail of which is too complex for me to write about, but the single biggest benefit of this policy is claim repeatability in the event of multiple claims, but then who knows, that might well be bullsh1t too..

    The policy was straight insurance, there is no "investment" portion, and if I am mistaken is never effectively "paid up", its like your vehicle insurance, you just keep paying..

    The policy has a 5% compulsory annual increase, I foolishly agreed to take out a further 10% optional increase on top of that, "because it keeps you in a better insured position" so I was sold.... sorry, I meant I was told...

    I signed the document, so really its my stupidity that landed me where I am today in this policy regard, was I taken as a fool then, yes, probably, its small consolation though knowing I'm not alone, hell I cannot be the only chop to have bought this policy.....

    Turns out the extra 10% gains you as policyholder pretty much nothing, but it sure as hell gains Momentum and possibly the broker a fair chunk..

    That annual 10% extra follows a logarithmic increase curve that is very very significant, and becomes very very expensive, funny thing is that the concern of 'running out of funds" was really really to me back then, but for reasons unknown I did not extrapolate the costs versus forecast income over to age 65 or 70, had I done that, I guarantee I would not be writing this little love story... I trusted my FA, hell he is a long time friend, why would he, but then he did not did he??, I was the one signing the doc ultimately.

    So..

    This is where I am at right now.. My contributions to date have easily helped fund the west wing of the Momentum Executive office upgrade, long may they writhe in their opulence, however,.... I still want some form of life cover because I do not want to be a burden on my family should (hopefully never) the need arise, I have seen this effectively play out in both mine and SWAMBO's parents, and its not nice..

    Hindsight is 20-20 vision they say, its the foresight thing that needs skill..

    Still, I wait in hope that something good comes of this..

    Will follow up as promised..
    Last edited by Marcochezzi; 2020/01/21 at 10:06 AM.
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  20. #40
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    Default Re: Life insurance conundrum

    If I may ask, how much was the premium and what was the cover ?

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