Buy Term, Invest the Rest? (BTIR) – The Ultimate Insurance Guide for Beginners (Part 2)

Click here for Buy Term, Invest the Rest? (BTIR) – The Ultimate Insurance Guide for Beginners (Part 1)!

In yesterday’s blog post, I mentioned about the amount of returns that I needed to generate if I were to adopt the Buy Term, Invest the Rest strategy. The annual yield of 1.37% was unbelievably true. Needless to say, I took comfort in my own numbers and decided to purchase a term plan.

Now, I was faced with a few new problems. Hais. Firstly, I had to find a new insurance agent as the new policy that I wanted to take up was from another insurance company. Secondly, I did not have a quotation to the policy that I wanted to buy. So I didn’t know how much my term plan was going to be.

After spamming my Whatsapp for help (thanks friends!), I finally managed to get two quotations for the same plan. It was interesting because although they came from the same insurer, I got two different quotes. I went ahead to make an appointment with the agent that gave me a cheaper quotation.

This is how the appointment (roughly) went.


Me: Hello! I would like to get this insurance plan please. Premiums are according the same quote that you gave me, right?

Agent: Oh okay. Actually, we have a few options for this plan. Would you like to consider any of these riders? *Starts explaining rider*

Me: *Listens intently* How much is the rider?

Agent: Here you go. On top of your current premium, it is $XXXX annually.

Me: Wow it is more than double the price! I think it’s okay, I’ll go vanilla on this one.

Agent: Okay, what about this rider? *Starts explaining second rider*

Me: Eh, I think it’s okay.

Agent: I see, that’s fine. By the way, I would like to ask, are you covered by a whole life plan?

Me: No, why? You have arh?

Agent: Of course I have one, I always recommend my clients to have one, because the protection is for whole life! Have you ever considered taking up one?

Me: No leh, how much does it cost? And how is the coverage like?

Agent: Let me explain further to you. For $XXXX annually, you can get $YYYY of coverage, and you can also add on a small amount of premium at $ZZZZ to get additional benefit for even more coverage! Plus you can get back a certain amount of premiums, unlike term which you can’t.

Me: Hmm, I think I’m good for now. The term plan is fine. 🙂

Agent: Okay. Please sign here.


The actual conversation not so short lah, of course. But gist of it is there.

I am quite glad that the agent did try to mention some of the options available, but did not try too hard to the point where it becomes pushy. If he did, I would have probably just got the policy from the other one who quoted me at a slightly higher price.

I was also doubly glad that I did my own research before meeting him so that I wouldn’t be influenced by him, possibly making an uninformed decision. Later after sign paper already then regret, I have nobody but myself to blame. T_T

He did try to show me the expected returns that I might get if I should get the whole life plan. Because the numbers increase exponentially to what may seem to be significantly big amounts, it is not difficult to see why average clients will get enticed by them. A return of $212,000 after 35 years seems like something impossible that you yourself can’t generate when the figures are placed right in front of you. However, with some effort and analysis, you can see that it is highly achievable, and beatable!

That being said, I haven’t actually met an insurance agent who can really explain to me fully how the premiums of a whole life plan are being used for investments. I’m taking a wild guess here that they are investing it back into their own mutual funds from their individual companies as I have mentioned in Part 1.

I also wonder if anyone with a whole life plan has ever questioned an agent that before, and tried to get records of how their premiums are being invested. Wouldn’t you like to know how they make your money grow? If it is an effective way, then perhaps we could also learn something from them. I’m sure that there are others out there who have benefited from the returns of Whole Life plans.

If anyone has the answers, please enlighten me by leaving a comment. I would love to know!

Thanks for reading this two-part guide! I hope that it helped you in some way. 🙂

Miss Niao xoxo

Author: missniao

Hello! I blog about financial matters and things that average people can do to have a better retirement. I want to inspire people to take control of their money and have a better understanding about it. If you are interested to know more, follow me @ missniao.wordpress.com! :)

4 thoughts on “Buy Term, Invest the Rest? (BTIR) – The Ultimate Insurance Guide for Beginners (Part 2)”

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s