Whole-life Insurance Policies
A common joke among insurance agents is: "We deserve high distribution costs as a reward for the difficult job of selling policies with high distribution costs."
|
|
Whole-life Insurance Policies
A common joke among insurance agents is: "We deserve high distribution costs as a reward for the difficult job of selling policies with high distribution costs." |
|
|
Ranking |
Insurance Company
|
You must pay premiums for this long in order to pay the distribution costs |
| 1 |
-- buy insurance and investments separately |
0 months |
| 2 |
NTUC Income
|
12 months |
| 3 |
Aviva
|
17 months |
| 3 |
HSBC
|
18 months |
| 3 |
Asia Life
|
18 months
|
| 3 |
GreatEastern Life
|
19 months |
| 3 |
Prudential
|
21 months |
| 3 |
UOB Life
|
22 months |
| 3 |
Manulife
|
23 months
|
| 4 |
AIA
|
33 months |
|
Average for All Insurers |
20 months |
|
|
1) Distribution costs are selling expenses, paid to the insurance company and sales agent. It is a "dead weight" cost in that it does not contribute to the purchase of insurance or investments for the policyholder. 2) Policies are standardised as: "A whole life policy charging $200 per month for a 30-year old non-smoking male." 3) "Time needed to pay distribution costs" is calculated as distribution costs divided by the $200 monthly premium. |
||