Can anyone tell me about non participating whole life insurance policy?

Question

I'm 24 years old and working as a professional in malaysia.Recently i bought an insurance policy from AIA.After reading my insurance policy, i want to know a few things like
1) will i'll be getting annual cash dividents?
2)if let say i want to surrender my policy after 20 years..will i'll be getting my premiums back + the dividents?
3)is this the best savings+protection policy?
I'm confused..i want to ask my agent but i think its better to get opinion from other people first before consulting her.
and one more thing..is it benificial to own a few insurance policies?

Yeah..actually im more looking towards protection compare to $$ because i want to make sure my children have enough $$ to support their lives in case something happened to me...

Answer 1

Non Participating means that the policy does not receive dividends from the company. They may decide to credit interest above the guaranteed rate, but that is not typically the design of a non-par policy. Any increases in Cash value will most likely be rolled into the policy rather than paid directly to you.

I would guess that at the 20 year point, you'll just about get your premiums back.

These policies are OK for long term savings combined with insurance. I would suggest looking instead at Variable Life (if such a thing exists in Malaysia) or buying Term insurance instead.

The benefits of what you have are premiums that are guaranteed for the rest of your life (hence the name Whole Life). At the guaranteed interest rate (in the US, most are 3.5-4%) the cash value will equal the death benefit at age 100 - again guaranteed. Any excess interest or dividends paid (in your case it will be called excess interest) - not guaranteed - will accelerate the cash accumulation (right now, in the US most of these policies are earning dividends that push the growth rates into the mid 6% range.

If you were in the States, I would say you most likely don't have a great plan, but I don't know what other types of plans are available in Malaysia.

Hope this helps.

Answer 2

Non Participating Whole Life Insurance

Answer 3

First and foremost, the word 'non participating' means that you will not be entitled to receive any bonuses from the company.
Therefore, no, you will not get annual cash dividends.
You may cancel your plan at any time and you will not get back any premiums previously paid.
However, if your plan is a refund guaranteed plan (which I know AIA has), usually after a x number of years if no claims are made, you will get a refund of the premiums paid. I do not know if you have purchased such a plan.
No, this plan does not provide you with savings (note:"non-par" plans does not give you dividends, bonuses or any other such privilege)

Ask yourself, what are you really looking for? Affordable protection?
Savings with protection?
Or protection with savings?
Note that AIA carries many plans which will address each of these needs. Please relay to your agent what you want and she will match the products accordingly.

Lastly, in buying insurance policies, the main thing is to ensure that you are properly financially protected. Therefore, you should be looking at the "Sum Assured". Check how much the amount is. Now calculate, if you were disabled or sick, will the payout allow you to survive for a reasonable amount of time?
Some people have many policies but their combined sum assure d is still very low=useless.
Some people have only one or two policies but their sum assured is very high. Therefore, the most important issue at hand is not how many policies you own but how much are you insured for.