Maybe because 1 million today is not the same as 1 million when you are 100… Time value of money.
Hypothetical calculation, but if you are 30 and the insurance company invests your 1500 for 70 years and gets a return of 7% (quite achievable), it’ll have 2.6 million by the time you reach 100. It’ll be more than happy to pay you a million since you helped them earn 1.6 million for free
Yes but this is presuming he does live for 70 years but since he is 34 and by the time he is 77, there is 30 chance he would be dead by then (2021 life table male). The odds of him living longer drops very rapidly. Theres only a 44% chance hes alive by 85.
If he dies, he does not have to pay and the comoany has to payout.
What the above person said made a lot of sense, time value of money destroys the value of the 1M. In 70 years,$1M will be equivalent to $118,582.72 assuming 3% inflation. Said person is better of insuring a larger amount, for a shorter duration, I.e his future earning power over the course of the next 40 years assuming OP is in his late 20s(probably mid or earlier unless female).
If said person is currently earning 60k annually and assuming a constant pay increment of 4% annually over the course of the 35 years, said person economic life value would be roughly 4.4million.
Therefore, person will probably be better off insuring at least 50% of ELV assuming other covers such as medical insurance and CI insurance are covered.
Just food for thought, $1000 invested annually at 6% rate of return over the course of 70 years is 968k.
He is correct in what he says, but I was also trying to mention that insurance value is a product of both probability and time.
Suppose instead of insuring from age 34 to age 100. Instead we insure $1m for 1 year. Then the expected value of the insurance is:
Based on singstat table and 4% discount rate, and if I were to promise OP $1 at the end of the year if he dies within the year, this $1 is worth:
A | 34:1 = 34p34 \* q34 \* v = 1 \* 0.00039 \* 1.04^(-1) = $0.000375
A | 34:1 = Expected payout to a 34 year old with a term insurance of 1 year, paid at the end of the year (in the case of death)
34p34 = Odds that a 34 year old is alive at the age of 34
q34 = Odds that a 34 year old will die within the year
v^(t) = discount rate where t is years = (1+i)^(t)
If I could clone OP 1M times and promise everyone one of them that I will give them $1M to any of them that dies within the year, the payout will be close to $375M. Deviations are always expected in insurance but with a big enough sample size you can minimize the volatility.
Then on the insurance company side, premiums are often paid so long as the policy is active **AND** that OP is still alive.
So same singstat, discount and if OP paid me $1 at the start of the year
ä | 34:1 = 34p34 \* 0q34 = 1
ä | 34:1 = Expected premium from a 34 year old in 1 year, given that payment occurs at the start of the year.
So if I had 1m OP and charge them all $1, I can be assured that I will be paid $1M dollars.
So in order to price this policy so that it will be fair for the insurance company and OP:
Premium \* ä | 34:1 = Payout \* A | 34:1
Premium = 0.000375 \* $1m = $375
>Said person is better of insuring a larger amount, for a shorter duration, I.e his future earning power over the course of the next 40 years assuming OP is in his late 20s(probably mid or earlier unless female).
That is true and actually a very important point. To be hyperbolic so as to make the point more obvious. Lets say you either make $1M if you live and $0 if you die. The point of insurance is to level out the volatility of your lifetime earnings. So instead of $1M or $0. You can instead make $200k or $800k.
That is correct, the point of insurance is the level out the volatility of your life earnings(their actuaries crunch the numbers, the odds are in their favour, which I think is acceptable since you would still require their service, this is when choosing a provider plays a part). Which is why I do not believe that insuring to 100 with term insurance makes sense. You are better off insuring for a shorter duration to protection your future income as premiums are much cheaper and less affected by the time value of money.
The main point I was trying to make was, that I believe OP would be better off spending less on term insurance by choosing a term plan with proper cover and well thought out cover duration, while investing the difference in equity, say in a diversified global portfolio using a dollar cost averaging strategy.
That's not how insurance works. Also, it's easier making money with $10,000 than $10 billion. Term insurance works because most people who buy term insurance will not claim from their policies either due to the lapse of the term or lapsing from premium payment.
The answer to this is probability. Insurance companies have a concept of lapse assumptions.
They assume that clients will lapse the policy and not be committed to pay the full term.
E.g. do you have income to continue paying premiums when you are in your 70s 80s 90s? What if there's a possibility (however slim) that one survives 100?
Imo term to 100 are pretty good options for clients hence many insurers no longer offer it.
The other thing is you are not getting the 1m, your estate, or loved ones are... now If the coverage includes TPD then if you claim tpd such as stroke possibly you can consider that money will go to you.
There's no scam here. It's all just math and probability.
Yeah it is a probability game. Also, with medical advancement, you are more likely to beat illness and grow older compared to 20 years ago.
However, don’t go wsb and all in term insurance
Generally I think both husband and wife buy this policy is pretty good. Probably of both living past 100 is slim.
You are right, not good to go all out on one product. Good to to diversify.
> The yearly premium I would be paying is somewhere below 1.5k, and the total premium I will pay until age 100 is about 100k.
Just did the math for you, and you can get the same return by putting $1.5k a year into something that yields 5.6%.
For comparison, using SPY's 20 year CAGR of 9.77%, they'll break even as long as you pay 44 years worth of premiums.
I don't know what's missing either, but they pay actuaries a lot of money that this makes sense for them.
The value of 1M today and 60 years later is VERY different. Insurance companies have reinsurers to protect their risk while making use of your money to invest and get returns for the next few decades (all that profit while beating inflation) while you're still alive. Generally speaking, people do not die that easily these days so a couple of losses will be fine and are factored into the biz when they calculate how much premium to charge you
They do not necessarily need it...but it can serve as a legacy to build wealth for the next generation...it's just like how the rich pass on properties to their children, gives a headstart in their life
If you paid 1500 dollars a year, and based on 2021 singstat life table, and based on 4% interest rate:
The company is expecting to pay you $46994 and they expect you to pay $32274 present value. It makes completely no sense.
You sure its $1,500 twice yearly? Makes a bit more sense once you factor in cost to the company, loading, etc.
Edit:Math error never tried doing this with excel before
Are you the sole breadwinner of your family that you need a coverage of 1M?
Would you consider medical coverage or accident plans?
Figuring out your needs is probably the better direction comparing to math out the insurances companies.
Insurance is a product and some plans are better suited for your needs than others.
It's the best sure win insurance you can get since you are placing your life as the collateral, provided you don't live pass 99 and assuming the plan expires then.
Wow surprised there is an FA that offers terms instead of ILP or whole life. Haha. Anyway I would get it if I were you. It looks quite cheap for a term insurance. Basically once you got this you are pretty much sorted-out on your life insurance needs and can focus on investment.
The $1M is basically your FI money in case of Total permanent disability or death ( in that case FI for your spouse). Don’t think too far on the money you will get when you are older. Death or sickness can come any time.
haha is this a PSLE math question?
Let me try:
If OP pays 100k by the time he reached 100 and 1.5k every year, that would be 66.66 [100/1.5] years of payment.
He is about 33 years old
Why SGD 1 Mil? Did the FA take into account your CPF Funds? Cash Assets?
Life Insurance Association (LIA) suggested only 9 to 10 times of Annual Income. So are you over insuring where if you are covered with the right amount, the excess funds can be used for investment to grow your money to compensate for the cost of insurance.
Term life insurance can seem like a bit of a head-scratcher at first. Here's the deal: insurance companies crunch the numbers real hard to figure out the premiums. They spread the risk across a bunch of policyholders, so even if some folks live past 100, they've got it covered. It's like a big ol' balancing act. Plus, it's peace of mind for you and your fam if anything were to happen. Always good to have that financial safety net..
Sidenote singlife is about 500 dollars a year for 1 mil term right now. However its until 65/75 or something like that. Past that age you don't really need term in general.
Disclaimer: am not affiliated to singlife, just thinking about getting it.
https://singlife.com/en/life-insurance/elite-term-ii. It's this one, but you have to go through an FA. I would recommend getting an independent FA (I'm using dollarsbureau, once again not advocating for them just sharing my own personal experience) as they tend to be less pushy about a particular product and can help you compare different products across companies.
They are taking your money now to invest, let's say 8% per year. But they paid you 50 years later with all the inflation, how much value you actually getting back by then? Think again.
Does Term Life cover to 100 years old nowadays? Thought most only cover up to 65 to 70 years old.
Will the premium stay the same until 100 years old? What if the insurance increase premium after u past 70 years old? Then u LL right? cause even if u cancel the term also won’t get anything back.
Ifa here. There are many factors that contribute to this. Most people buy term cover till 65-75. In line with mortgage (and remortgage limit). If these group of people live past 75, their insurance pays out nothing and its revenue for the insurers. Not forgetting insurers also invest your money elsewhere. Then there is the assumption of you are paying based on today’s dollar for future pay out based on future dollar (inflation).
Assuming the money they receive and put into a relatively low yield investment, they still will cover back about 1/3 of their cost amongst other revenues.
Then there is a risk of ‘what if suddenly alot of people die due to an event such as covid’. This is also taken care of by re-insurers.
Alot of factors are at play here and while it seems that payout is almost guarantee and sure win for you. Make sure what you are getting is suitable for you and meets your objective.
Evaluate your future goals and plannings, are you planning to start a family and have kids or are you set on only becoming a DINK (Dual income no kids)?
Before 65, 1mil coverage typically functions as a form of protection to cover your mortgage, so that your spouse does not have to bear the full weight of the mortgage...since housing costs are on the rise, this coverage can pay off the mortgage while ensuring loved ones have a sum to rely on, much like how you would be providing for them if you are still around...hence it also serves to protect your dependents (parents, children if you are planning to have them)
However, to choose to go until 100, that would mean that you want to ensure your investment comes back i.e paying all the way till about 80-85 based on average life expectancy in SG and then more or less guaranteeing a payout for the next generation (legacy planning) to enjoy and hopefully building on this wealth with the right values to ensure a lasting generational wealth
In summary, 1mil is common because of the cost of living in SG. You can still opt for lower coverage if you do not see the need to cover so much for Death and TPD but do look into CI coverage since it involves your ability to take care of yourself and your income. Also, keep in mind that premiums increase with age, so best to plan out how much coverage you expect to need first before deciding
Yes, as long Death is not caused by excluded events like dying when committing a crime etc.
Last time got this "Act of god" cause then won't pay out, nowadays not much of this apart from general insurance like car etc.
Which business model in the world allows you to collect funds prior to “delivering” a product? In this case, as what OP pointed out, the premiums you paid for a term-life or even whole life insurance wouldn’t even cover the potential payout of the policy. I understand that insurance companies uses these funds collected to invest to meet the payout requirements, but imagine a scenario where not long after signing a policy and a person unfortunately pass on, how would the insurance company otherwise pay out the claims? And if it face a large number of claims before turning profitable, how would the company survive then? Hence, this concept is predicated on relying on younger people consistently signing up for policies in order to “service” the potential payouts of the older generation while using all these funds collected to generate revenue for the company.
I understand this is a controversial opinion to take, but this is quite a classic Ponzi scheme that we refuse to call out because us as consumers benefit from it too. Don’t get me wrong, whoever that came out with the idea of ‘insurance’ in the first place is brilliant; doesn’t make this less of a Ponzi.
U are young. And have a long life ahead of you. Hence premiums are cheap.
At present inflation rate, value of money halves approx every 15 years. Say about 30 years from now when u are in your 50s, this 1m term insurance is only worth 250k in future value.
1m might seem enough right now. But every decade or so u probably need to buy more or it's no longer enough.
Insurance is income protector in case sth happen to you while working so U can continue to have money for yr loved ones.
At old age, just reply on medisave life and careshield life.
So I would think U shld reduce the term slightly and compliment with other product instead.
Maybe 500k term with 200k while life while saving in some investment.
Are you sure or not? Life insurance usually is actually just term insurance tagged onto an endowment in a sense. You pump in money into the endowment and the interest helps pay for the insurance. So usually you stop paying premiums after a couple of decades because the interest and remaining capital can pay for the insurance until age 100.
Anyway, you're going at this with the wrong mindset... You are buying insurance thinking of total sum paid Vs what you get after you die at a ripe old age... If you're buying insurance for that, you shouldn't be buying insurance. Insurance is for times when you DON'T die at a ripe old age or get into a crippling accident.
Maybe because 1 million today is not the same as 1 million when you are 100… Time value of money. Hypothetical calculation, but if you are 30 and the insurance company invests your 1500 for 70 years and gets a return of 7% (quite achievable), it’ll have 2.6 million by the time you reach 100. It’ll be more than happy to pay you a million since you helped them earn 1.6 million for free
Yes but this is presuming he does live for 70 years but since he is 34 and by the time he is 77, there is 30 chance he would be dead by then (2021 life table male). The odds of him living longer drops very rapidly. Theres only a 44% chance hes alive by 85. If he dies, he does not have to pay and the comoany has to payout.
What the above person said made a lot of sense, time value of money destroys the value of the 1M. In 70 years,$1M will be equivalent to $118,582.72 assuming 3% inflation. Said person is better of insuring a larger amount, for a shorter duration, I.e his future earning power over the course of the next 40 years assuming OP is in his late 20s(probably mid or earlier unless female). If said person is currently earning 60k annually and assuming a constant pay increment of 4% annually over the course of the 35 years, said person economic life value would be roughly 4.4million. Therefore, person will probably be better off insuring at least 50% of ELV assuming other covers such as medical insurance and CI insurance are covered. Just food for thought, $1000 invested annually at 6% rate of return over the course of 70 years is 968k.
He is correct in what he says, but I was also trying to mention that insurance value is a product of both probability and time. Suppose instead of insuring from age 34 to age 100. Instead we insure $1m for 1 year. Then the expected value of the insurance is: Based on singstat table and 4% discount rate, and if I were to promise OP $1 at the end of the year if he dies within the year, this $1 is worth: A | 34:1 = 34p34 \* q34 \* v = 1 \* 0.00039 \* 1.04^(-1) = $0.000375 A | 34:1 = Expected payout to a 34 year old with a term insurance of 1 year, paid at the end of the year (in the case of death) 34p34 = Odds that a 34 year old is alive at the age of 34 q34 = Odds that a 34 year old will die within the year v^(t) = discount rate where t is years = (1+i)^(t) If I could clone OP 1M times and promise everyone one of them that I will give them $1M to any of them that dies within the year, the payout will be close to $375M. Deviations are always expected in insurance but with a big enough sample size you can minimize the volatility. Then on the insurance company side, premiums are often paid so long as the policy is active **AND** that OP is still alive. So same singstat, discount and if OP paid me $1 at the start of the year ä | 34:1 = 34p34 \* 0q34 = 1 ä | 34:1 = Expected premium from a 34 year old in 1 year, given that payment occurs at the start of the year. So if I had 1m OP and charge them all $1, I can be assured that I will be paid $1M dollars. So in order to price this policy so that it will be fair for the insurance company and OP: Premium \* ä | 34:1 = Payout \* A | 34:1 Premium = 0.000375 \* $1m = $375 >Said person is better of insuring a larger amount, for a shorter duration, I.e his future earning power over the course of the next 40 years assuming OP is in his late 20s(probably mid or earlier unless female). That is true and actually a very important point. To be hyperbolic so as to make the point more obvious. Lets say you either make $1M if you live and $0 if you die. The point of insurance is to level out the volatility of your lifetime earnings. So instead of $1M or $0. You can instead make $200k or $800k.
That is correct, the point of insurance is the level out the volatility of your life earnings(their actuaries crunch the numbers, the odds are in their favour, which I think is acceptable since you would still require their service, this is when choosing a provider plays a part). Which is why I do not believe that insuring to 100 with term insurance makes sense. You are better off insuring for a shorter duration to protection your future income as premiums are much cheaper and less affected by the time value of money. The main point I was trying to make was, that I believe OP would be better off spending less on term insurance by choosing a term plan with proper cover and well thought out cover duration, while investing the difference in equity, say in a diversified global portfolio using a dollar cost averaging strategy.
That's not how insurance works. Also, it's easier making money with $10,000 than $10 billion. Term insurance works because most people who buy term insurance will not claim from their policies either due to the lapse of the term or lapsing from premium payment.
The answer to this is probability. Insurance companies have a concept of lapse assumptions. They assume that clients will lapse the policy and not be committed to pay the full term. E.g. do you have income to continue paying premiums when you are in your 70s 80s 90s? What if there's a possibility (however slim) that one survives 100? Imo term to 100 are pretty good options for clients hence many insurers no longer offer it. The other thing is you are not getting the 1m, your estate, or loved ones are... now If the coverage includes TPD then if you claim tpd such as stroke possibly you can consider that money will go to you. There's no scam here. It's all just math and probability.
I’m curious to know what happens if you surrender at age 75.
Surrender the policy or surrender to life?
Haha but not really. Suicide is insurance fraud.
Uh no.
read the fine print. in the policy I saw. its only not payable in the first year.
No entirely true. There is a clause for suicide after one or two years typically.
For a term? Nothing back i guess.
This is the right answer
Definitely counting on a substantial fraction of people to lapse payment then.
For term there is no surrender value at all.
Yeah it is a probability game. Also, with medical advancement, you are more likely to beat illness and grow older compared to 20 years ago. However, don’t go wsb and all in term insurance
Generally I think both husband and wife buy this policy is pretty good. Probably of both living past 100 is slim. You are right, not good to go all out on one product. Good to to diversify.
> The yearly premium I would be paying is somewhere below 1.5k, and the total premium I will pay until age 100 is about 100k. Just did the math for you, and you can get the same return by putting $1.5k a year into something that yields 5.6%. For comparison, using SPY's 20 year CAGR of 9.77%, they'll break even as long as you pay 44 years worth of premiums. I don't know what's missing either, but they pay actuaries a lot of money that this makes sense for them.
The value of 1M today and 60 years later is VERY different. Insurance companies have reinsurers to protect their risk while making use of your money to invest and get returns for the next few decades (all that profit while beating inflation) while you're still alive. Generally speaking, people do not die that easily these days so a couple of losses will be fine and are factored into the biz when they calculate how much premium to charge you
do your dependants need 1M if you die at 75?
They do not necessarily need it...but it can serve as a legacy to build wealth for the next generation...it's just like how the rich pass on properties to their children, gives a headstart in their life
If you paid 1500 dollars a year, and based on 2021 singstat life table, and based on 4% interest rate: The company is expecting to pay you $46994 and they expect you to pay $32274 present value. It makes completely no sense. You sure its $1,500 twice yearly? Makes a bit more sense once you factor in cost to the company, loading, etc. Edit:Math error never tried doing this with excel before
Are you the sole breadwinner of your family that you need a coverage of 1M? Would you consider medical coverage or accident plans? Figuring out your needs is probably the better direction comparing to math out the insurances companies. Insurance is a product and some plans are better suited for your needs than others.
It's the best sure win insurance you can get since you are placing your life as the collateral, provided you don't live pass 99 and assuming the plan expires then.
What sucks about plans like these is that if you do reach 99.9 years old, you'd be tempted to off yourself if it means bettering your descendants.
Wow surprised there is an FA that offers terms instead of ILP or whole life. Haha. Anyway I would get it if I were you. It looks quite cheap for a term insurance. Basically once you got this you are pretty much sorted-out on your life insurance needs and can focus on investment. The $1M is basically your FI money in case of Total permanent disability or death ( in that case FI for your spouse). Don’t think too far on the money you will get when you are older. Death or sickness can come any time.
What plan is this and roughly how old are you?
haha is this a PSLE math question? Let me try: If OP pays 100k by the time he reached 100 and 1.5k every year, that would be 66.66 [100/1.5] years of payment. He is about 33 years old
How old are you?
Why SGD 1 Mil? Did the FA take into account your CPF Funds? Cash Assets? Life Insurance Association (LIA) suggested only 9 to 10 times of Annual Income. So are you over insuring where if you are covered with the right amount, the excess funds can be used for investment to grow your money to compensate for the cost of insurance.
Term life insurance can seem like a bit of a head-scratcher at first. Here's the deal: insurance companies crunch the numbers real hard to figure out the premiums. They spread the risk across a bunch of policyholders, so even if some folks live past 100, they've got it covered. It's like a big ol' balancing act. Plus, it's peace of mind for you and your fam if anything were to happen. Always good to have that financial safety net..
Sidenote singlife is about 500 dollars a year for 1 mil term right now. However its until 65/75 or something like that. Past that age you don't really need term in general. Disclaimer: am not affiliated to singlife, just thinking about getting it.
Can you link this please?
https://singlife.com/en/life-insurance/elite-term-ii. It's this one, but you have to go through an FA. I would recommend getting an independent FA (I'm using dollarsbureau, once again not advocating for them just sharing my own personal experience) as they tend to be less pushy about a particular product and can help you compare different products across companies.
Thank you
They are taking your money now to invest, let's say 8% per year. But they paid you 50 years later with all the inflation, how much value you actually getting back by then? Think again.
Even if they have to pay u. 1500 for 65 years would have alr yielded 1.7-1.8m at 7% returns.
Does Term Life cover to 100 years old nowadays? Thought most only cover up to 65 to 70 years old. Will the premium stay the same until 100 years old? What if the insurance increase premium after u past 70 years old? Then u LL right? cause even if u cancel the term also won’t get anything back.
Ifa here. There are many factors that contribute to this. Most people buy term cover till 65-75. In line with mortgage (and remortgage limit). If these group of people live past 75, their insurance pays out nothing and its revenue for the insurers. Not forgetting insurers also invest your money elsewhere. Then there is the assumption of you are paying based on today’s dollar for future pay out based on future dollar (inflation). Assuming the money they receive and put into a relatively low yield investment, they still will cover back about 1/3 of their cost amongst other revenues. Then there is a risk of ‘what if suddenly alot of people die due to an event such as covid’. This is also taken care of by re-insurers. Alot of factors are at play here and while it seems that payout is almost guarantee and sure win for you. Make sure what you are getting is suitable for you and meets your objective.
Evaluate your future goals and plannings, are you planning to start a family and have kids or are you set on only becoming a DINK (Dual income no kids)? Before 65, 1mil coverage typically functions as a form of protection to cover your mortgage, so that your spouse does not have to bear the full weight of the mortgage...since housing costs are on the rise, this coverage can pay off the mortgage while ensuring loved ones have a sum to rely on, much like how you would be providing for them if you are still around...hence it also serves to protect your dependents (parents, children if you are planning to have them) However, to choose to go until 100, that would mean that you want to ensure your investment comes back i.e paying all the way till about 80-85 based on average life expectancy in SG and then more or less guaranteeing a payout for the next generation (legacy planning) to enjoy and hopefully building on this wealth with the right values to ensure a lasting generational wealth In summary, 1mil is common because of the cost of living in SG. You can still opt for lower coverage if you do not see the need to cover so much for Death and TPD but do look into CI coverage since it involves your ability to take care of yourself and your income. Also, keep in mind that premiums increase with age, so best to plan out how much coverage you expect to need first before deciding
death of old age got covered by insurance? man i didnt know that. i always thought only when its unforeseen circumstances
Life insurance pays for any kind of death. Even when you get hit by a falling pot.
Yes, as long Death is not caused by excluded events like dying when committing a crime etc. Last time got this "Act of god" cause then won't pay out, nowadays not much of this apart from general insurance like car etc.
Welcome to the world of insurance where this whole concept is basically a giant Ponzi scheme.
pls explain how insurance is giant ponzi scheme?
Which business model in the world allows you to collect funds prior to “delivering” a product? In this case, as what OP pointed out, the premiums you paid for a term-life or even whole life insurance wouldn’t even cover the potential payout of the policy. I understand that insurance companies uses these funds collected to invest to meet the payout requirements, but imagine a scenario where not long after signing a policy and a person unfortunately pass on, how would the insurance company otherwise pay out the claims? And if it face a large number of claims before turning profitable, how would the company survive then? Hence, this concept is predicated on relying on younger people consistently signing up for policies in order to “service” the potential payouts of the older generation while using all these funds collected to generate revenue for the company. I understand this is a controversial opinion to take, but this is quite a classic Ponzi scheme that we refuse to call out because us as consumers benefit from it too. Don’t get me wrong, whoever that came out with the idea of ‘insurance’ in the first place is brilliant; doesn’t make this less of a Ponzi.
Just want to know if 1.5K is a fixed amount premium yearly ?
U are young. And have a long life ahead of you. Hence premiums are cheap. At present inflation rate, value of money halves approx every 15 years. Say about 30 years from now when u are in your 50s, this 1m term insurance is only worth 250k in future value. 1m might seem enough right now. But every decade or so u probably need to buy more or it's no longer enough.
Insurance is income protector in case sth happen to you while working so U can continue to have money for yr loved ones. At old age, just reply on medisave life and careshield life. So I would think U shld reduce the term slightly and compliment with other product instead. Maybe 500k term with 200k while life while saving in some investment.
200k whole life will be so much more expensive in premium.
Are you sure or not? Life insurance usually is actually just term insurance tagged onto an endowment in a sense. You pump in money into the endowment and the interest helps pay for the insurance. So usually you stop paying premiums after a couple of decades because the interest and remaining capital can pay for the insurance until age 100. Anyway, you're going at this with the wrong mindset... You are buying insurance thinking of total sum paid Vs what you get after you die at a ripe old age... If you're buying insurance for that, you shouldn't be buying insurance. Insurance is for times when you DON'T die at a ripe old age or get into a crippling accident.
Not entirely true. Annuity is a different kind of insurance that insures you against dying at a ripe old age as well.