Many young professionals, like myself when I graduated, often find themselves targeted by financial advisers eager to offer insurance and investment plans. I remember vividly how one of my classmates provided our contact list to his friend, a financial adviser, and soon enough, I received a call about my financial planning.

During our first meeting, the adviser presented me with two insurance plans: a life insurance policy worth $50,000 and an endowment plan worth $30,000. Without conducting any needs analysis or reviewing my risk profile, she asked me to sign the forms. As a young professional with no background in financial literacy—a subject that wasn’t part of the education system in Singapore—I trusted her and signed the documents.

The adviser promised significant returns, projecting a 5.25% return on the endowment plan and a high surrender value for the life insurance plan. Like many others in the 90s, I was convinced that these projections were guaranteed. It seemed like a secure and profitable investment at the time.

The Reality of Non-Guaranteed Returns

Fast forward more than a decade, after paying premiums religiously and later becoming an Independent Financial Adviser myself, I realized the importance of understanding financial products. When I contacted the insurer to check the surrender values for both plans, the figures were far below the projected 5.25%. It was a stark realization that the “projections” I had been promised were non-guaranteed.

I decided to surrender both plans and restructure my financial portfolio. It was a learning experience that underscored how essential it is to understand the products you’re investing in, especially when it comes to insurance and savings plans.

Are You Facing Similar Issues?

Many people, especially young professionals just starting their careers, face similar situations. Without proper financial literacy, we often trust the advice given to us by financial advisers who may not always explain the full picture. High projected returns can seem tempting, but often, they are just that—projections, not guaranteed outcomes.

This is why it’s vital to have a strong understanding of insurance products, what suits your needs, and what doesn’t. Don’t be misled by the shiny figures or the promises of high returns. Instead, empower yourself with the knowledge necessary to make informed decisions.

Take Charge of Your Financial Future

At Insure and Invest Smartly, we believe in empowering individuals to take control of their financial future. Join our financial literacy classes and learn how to evaluate insurance plans, understand investment strategies, and manage your finances independently. Don’t rely solely on the advice of others—learn to make the best decisions for yourself.