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Return from a Life Insurance Policy
07 Apr 2022 (48 views)

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).

I wrote these two financial books to explain how to invest your savings in a better way.
https://tankinlian.com/cart.aspx?ID=66

Tan Kin Lian

 


Return from a Life Insurance Policy
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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).

I wrote these two financial books to explain how to invest your savings in a better way.
https://tankinlian.com/cart.aspx?ID=66

Tan Kin Lian