Case Study 1

Case Study 1 by CF Lieu - Certified Financial Planner Malaysia

Back in 2013, before I engaged CF to conduct a thorough fee-based financial plan for myself and family, I was paying RM 6,290 annual premium for my 2 insurance policies.

Rm 5,800 was a G* company policy bought from O* Bank in 2011, which was an insurance savings plan (endowment), for a paltry Basic sum assured of RM 20k. Another RM 490 was for my standalone medical card bought in 2005.

Upon CF detailed analysis, the so-called savings plan guaranteed return was actually no better than FD rate.

CF dissected the policy itself and showed me the real picture of the endowment plan – which can be summed up in 1 word – meager – from both the returns and coverage standpoint. It was “neither here nor there” for the costs vs returns & coverage. I realized that:

  • If I need the guaranteed return of 3%, I better put into FD which does not have a “lock in period” before I can cash out, as compared to the endowment plan surrender value
  • If I need to grow my money, I better put it into unit trusts or stocks which can match the non-guaranteed, projected return of the endowment policy, but without “lock in period” of the endowment plan.

CF – “lock in period” is a layman term representing the number of years to pay the premiums for the insurance policy before surrendering it for the final accumulated cash value. If surrender early before the “lock in period”, it means you literally “lose money” as the surrender value will very likely be much lesser than the cumulative premiums paid.

“It was a mistake to have bought this in the first place” – CF didn’t minced his words.

I can only conclude that the sales pitch was too good and the banker misrepresented the ROI (return of investment) figures to me from day 1. And I am definitely not the only one as these plans apparently were “widely sold” at that time, and still is, not limited to any 1 insurance company.

Here comes the kicker: CF showed me how I could actually increased my BASIC sum assured more than TEN fold, add in a RM 100k critical illness coverage plus upgrade my outdated medical card for a combined annual premium of RM 4,000.

The point here, as highlighted by CF, is to maximize protection using minimal costs, and channel the difference into wealth accumulation instead.

How much saved?
RM 6,290 – RM 4,000 = RM 2,290

Unbelievable isn’t it? How is it possible? Increased coverage at lowered costs? I wouldn’t believe it if CF hadn’t done it for me.

Now I see the value of fee-based financial planning, and insurance restructuring is just one part of it.

The only pain point is that I surrendered the endowment plan. Some monetary losses there, but it’s ok, you win some, you lose some.

My wife’s policies

Her policies are more ok -as in, no major restructuring needed. The only thing was that one of her policy – we requested for a reduction in annual premium while keeping the coverage unchanged, as advised by CF.

Specifically, we saved another 1,200 year from this exercise. Yes it is possible, for those who didn’t know this.

My son’s education policy

It wasn’t even remotely related to any education savings goal, although it is marked as H* Takaful Education Plan. Didn’t believe it until CF explained the black and whites of the insurance policy. It was just a normal investment-linked policy with sum assured of RM 216k, costing 3,600 annually.

That was gross misrepresentation at its best. There wasn’t any proper fact-finding or proper disclosure done when I bought the policy from the bank.

And it dawned upon me after CF highlighted: “How can your son’s Life coverage is 10 times more than yours, when you are the main income earner and your son isn’t?”

I surrendered it. Done.


Remember when I said I replaced my then insurance policies with a more suitable policies for myself at a much lower costs? The thing is, I followed CF’s advice but I bought the policy from a relative who happen to carry the product CF was recommending.

There were no hard feelings.

No high pressure sales tactics.

No conflict of interests by stating I must get the product from CF.

In a nutshell…the quantifiable results…
Myself – saved 2,290/year. More than ten fold increased & better coverage
Wife – saved 1,200/year. Coverage unchanged
Child – saved 3,600/year. Total saved = RM 7,090/year.

Resources which I could channel to other uses. Ecstatic, my wife and I are, to say the least.

Bear in mind this is recurring annually- meaning, would have forked out these if we didn’t engage CF.

Fees paid for the financial plan? Only one third of the annual savings – one time.

One of the wisest and best decision I’ve made so far to engage CF who showed us much clarity over our overall personal finances.

What we like

The advisory approach by CF was structured and no fluff– he simplified it without missing the important points, yet not too much information to digest for a non-financial background person.

CF is really easy to work with and is prepared to give me + my wife time to discuss ideas, address concerns and solve problems.

I can safely say we have never experienced such comprehensive, integrated advisory approach, and we’ve since set our standards high.

Working with CF has really been a breath of fresh air. He has been most professional and efficient in all their services rendered.
I vouch for CF and have no qualms in recommending to friends or relatives who need an independent adviser to make a positive quantifiable impact to their personal finances.
To date, we still keep in touch regularly and CF has further assisted us in other aspects such as investment and estate planning.
John Paul Wang