Why now rush to buy savings insurance?

If you want to save money and consider buying savings insurance, it may be time to make a decision because next year it is likely that many savings plans will change because they will enter a low interest period.

Low interest, a result of reducing government interest to stimulate the economy, results in lower interest on savings or regular deposits, so people are more likely to put money out to spend or invest in other, better-yielding assets.

The advantage is that commercial banks will start announcing interest reductions (MLR, MOR, MRR). If we plan to refinance our homes or apply for new loans, this is a good time because we will get cheaper interest.

But for other business people, including insurers, it also makes less of a return on savings premiums that we can pay, which is why many companies have to start adjusting.

To explain, life insurance companies invest more than 80% of the premiums we pay into safe assets (yes, insurance companies do not directly invest the premiums we pay in income), especially government bonds.

As interest decreases, market returns fall, preventing insurers from issuing products that guarantee high returns as in the past. New policies that come out in the latter years have reduced yields from the old days. To prevent Negative Spread is to make less money from investing than the interest that promises customers.

The most famous example happened in the 1980s in Japan in the high interest era. Insurers sold policies that guaranteed a return of 4-6%. Many went bankrupt when the bubble burst and interest fell to near 0%.

However, based on the above information, buying savings insurance during this period is still useful in terms of protecting mortality risk that no product can do or buy for "tax relief," it is still worth it. If you base 20-30% of the tax, the actual return will come from the tax money returned, not the interest on the insurance. This is where the insurance is still valuable.

Or, if you can take some risks, you should consider Unit-Linked (Investment Insurance) that divides money into global debt funds or stocks for the opportunity to generate higher returns than Thai bonds with lower interest, with life coverage, or to focus on other funds, depending on our financial purpose.# Savings insurance # Accumulated insurance # Tax-deductible life insurance