Guidelines for Buying Insurance & Investment Products

The following are brief guidelines for those buying insurance and investment products.

Firstly, the product must be suitable for you.  It must meet the following criteria:

1. Financial needs;

2. Budget;

3. Investment risk level;

4. Financial objectives; and

5. Complement your existing portfolio of investment and insurance products.

You should have been appraised of the following information:

1. Identity of the insurer or the investment manager;

2. Terms and conditions;

3. Benefits and risks; and

4. Premium, costs, expenses, and fees.

The financial consultant’s advise must be congruent with the recommended product in the following areas:

1. Premium or investment amount;

2. Payment frequency;

3. Payment duration;

4. Guaranteed and non-guaranteed returns;

5. Early-termination clauses;

6. Product risk;

7. Maturity date; and

8. Veracity and accuracy of policy documents and contract.

The following are considerations for product switching:

1. The possible benefits;

2. Termination penalties for the original product;

3. The possibility of fewer benefits at higher or same cost; and

4. The possibility of the same benefits at higher cost.

After you have made a decision to buy, and commit, you have to note the following considerations:

1. The free-look period; and

2. The finer points of the contract.

It is important to never purchase a product you do not fully understand.  You should clarify everything.