1. Why Life Insurance Isn't Great (Thread)

Was responding to a post on @ImcocoMash's TL & was asked to do this thread (thanks Nenekazi). I'll explain why "Life Insurance" is probably a bad saving. My first job 3 jobs were in this field 2002-2006 in Zimbabwe. So I got an idea.

2. Before taking it consider the following factors well:

1. Economy outlook
2. Inflation outlook
3. Political outlook
4. Health outlook
5. Financial outlook

What do you think the economy is going to be like in 10-15 years? Where do you see inflation? How is politics shaping?

3. Economy - if you hear alarm bells of economy becoming worse by the day then pay close attention. In it was soon after expropriation without compensation. Exchange rate had tanked & production was slowing down in industry but life wasn't still terrible, just discomfort.

4. Inflation, here you need a policy that matches inflation growth in premiums & sum insured. BUT there's a problem, wages grow slower than inflation due to higher unemployment. So longterm to beat inflation insurance will eat into your disposable income, not a great thing.

5. If politicians who are likely to be future leaders show signs of acting like Mugabe or ZANUPF then be rest assured they'll harm economy & inflation, this is why I believe Malema/ANC need to rethink land policy. Without a savings base SA relies heavily on FDI, kill the goose?

6. Insurance companies are great at predicting your health, if you're going to die early you'll be charged heavily for it. Live longer you pay less. Use them to gauge your life expectancy, decline the cover & use their expertise to plan your life. You get expert help to plan

7. Insurance companies hold all cards to pay/decline cover, remember the dead body taken to @OldMutualSA? Now if you're dead many things not disclosed can cause claim to be declined, it's your fault you forgot to disclose diabetes, you're dead & you can't argue it out anywhere.

8. So what must you do? Save the quoted insurance premium monthly or less because you don't charge commission & admin fees, you can buy ETFs as a start i.e. do what the insurance company was going to do with your money. You can automate a debit order for an ETF, you're set!

9. Reduce risk of death, drive slower, quit smoking, exercise (even at home), eat well. If you do it for 10 years what you'd have put away will amaze you. Now think of expanding like buying a rental property for cash, Insurance companies do it, buy property with your money.

10. Put rental income into ETFs add bonds or shares, should be a lot more than what you put away at first round. Give it 5 years a second property or offshore investments (US/EU ETFs) @EasyEquities can help in that regard, teach this art to your kids, friends, rich circle growth.