I refer to the letters by Mary Perkins and Caveat M . Readers should not confuse the insurance part of an insurance policy with its investment part.

Basic insurance, either term insurance or whole life is exactly that - if you die before the term, your survivors will get the insured sum.

On the other hand, the 'endowment' type policies comes with a 'profit-sharing' rider where there is a surrender value. That is the investment part of insurance. As has been pointed out, the returns from this 'investment' is always dismal.

To attract potential customers, insurance companies resort to tables showing 'benefits' which promise a lot. However, if you read the fine print carefully, a section of the benefits will be what is called 'non-guaranteed' benefits.

And a small statement saying these un-guaranteed benefits have never been paid, and only anticipated based on a better performance of the company. As far as I know, after all these years, these anticipated benefits remain just that - anticipated!

So it is unrealistic to expect higher returns from insurance compared to other guaranteed instruments like fixed deposits in banks. The only potential benefit from the investment component of insurance is the forced saving and the tax deductions on premiums.

Otherwise, the best policy is the term policy, to cover your commitments to your family in case you die prematurely. The premium is low, and you may get better returns from your own investment with the balance of the premium.

But at the end of the term, say when you reach 65, the policy lapses and you get nothing back. But by then your financial commitments are over, and if have saved and invested wisely, you should be secured for your golden years. More so than if you have used an endowment-only type insurance policy.