A short post on insurance and investing.
1) Avoid Whole Life Policies, which are high cost, inadequate protection, and below average investment returns
2) Buy Term Life Policies instead, low cost plans which give you high coverage
3) Invest the difference, in low cost ETFs (a good recommendation would be the SPDR STI ETF, which tracks the general market performance of Singapore. This ETF has a record of an average of 7.28% returns per annum over the past 15 years)
4) Have a lesser risk appetite? Use a proportion of your money for ABF Bond ETF, an ETF that holds Singapore Govt and Stat Board bonds (as safe as they come) with returns of 2.7% per annum over the past 10 years.
5) If insurance plans to you are a way of forced savings, use the Regular Savings Plans (RSPs) of banks (DBS or OCBC), which automatically deducts money from your account to buy the ETFs as mentioned above. Google if you're unsure what this means.
