I got a shock when I read that 86% of those surveyed by Citi Financial Quotient Survey 2010 that they intend to use whole life insurance for retirement funding! According to the Today Online 'Most say CPF savings not enough' 2 Feb 2011,
"Singaporeans are turning to alternative means to take them through their silver years. These include proceeds from investment and insurance products. The most popular product is whole life insurance, with about 86 per cent of respondents holding or intending to purchase this product. The next most popular is the endowment plan."
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What then, in your opinion, should people build for retirement?
Every product is meant for specific purpose. There are countless retirement products in the market place and using whole life for retirement planning is definitely the wrong product. Ask your financial adviser to recommend you suitable retirement planning products.
Probably semantics … how the survey questioned was phrased … and how respondents interpreted the question.
Most people I know will treat their whole life as maybe part of their retirement funding, not the be all and end all. Many people nowadays realise the expensiveness of whole life and endowments, and they kinda know their limitations. These products are only complementary for their insurance or savings. Just like many oldies know that CPF should be only a (small) part of retirement funds.
I know oldies who treat wholelife or endowment as part of their fixed income savings. Of course I tell them that in this case they may be wasting unnecessary money on the insurance portion. They apportion other parts of their savings into different risk assets: dividend paying blue chips, property, liquid savings accounts, etc.
Quite a few of my oldie relatives who are ex-civil servants or going-to-retire civil servants are like that. They benefited from the relatively good salaries and stable income streams to be able to service some of these expensive whole life and endowments. OTOH other people with different situations may find these products to be totally unsuitable at all.
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What is the use of whole life insurance after the insured has no more dependents then?