I've just sat with a Discovery Broker to discuss adding more to a retirement policy. I currently have a Liberty RA but should adjust it slightly due to change in income. So I suggested that I take out a Discovery Invest plan to cover the difference. He responded that because I am on Diamond Vitality I should take advantage of their system and not only take out an investment plan (and move my current RA to them) but a life insurance policy. The life insurance policy has these kickbacks to the investment plan and the investment plan has lower premiums because of my vitality status. And for a while I thought it sounded really good (there seemed to be a 43% increase on investment return on retirement), but I must be honest, I don't really understand the implications. And this worries me. While I understand a broker is the expert in the product, they are also a sales person. I'd like a few more perspectives on the Discovery suite.
Because everything is enmeshed it is hard to understand what exactly the pros and cons are. The addition of the life insurance, which I am not entirely sold on, means I am spending nearly R900 a month more, than I would have if I didn't get it. But I'm surely not saving R900 a month my other policies so this feels like one of those "buy two of these things to save X" marketing ploys as you don't actually need two. How are the benefits of the system so great as to be better than me taking that R900 a month and just investing it somewhere (I'm not a fan of insurance - total grudge purchase)?
Because everything is enmeshed it is hard to understand what exactly the pros and cons are. The addition of the life insurance, which I am not entirely sold on, means I am spending nearly R900 a month more, than I would have if I didn't get it. But I'm surely not saving R900 a month my other policies so this feels like one of those "buy two of these things to save X" marketing ploys as you don't actually need two. How are the benefits of the system so great as to be better than me taking that R900 a month and just investing it somewhere (I'm not a fan of insurance - total grudge purchase)?