A policyholder bought a life insurance policy 36 years ago.

He paid an annual premium of $799.

At the end of 36 years, the surrender value is $56,035.

The policy gave him a yield of 3.5% per annum.

This yield of 3.5% may appear attractive, based on the low interest environment today.

However, during the past 36 years, the return from other investments would probably be higher. See the table below.

If he had invested in other investments, and had earned a yield of 5% per annum (which was possible during the past 36 years), the value of his investment would be $76,579 (i.e. 37% higher).

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Tan Kin Lian