Savings/Life Insurance Isn't Investing: 16 Years for a 0.64% Return

In 30 seconds: A Taiwanese student shared that her husband paid life insurance for 16 years at NT$120k/year, assuming compounding had built up a lot. The agent, not wanting them to surrender it, said “simple interest works out to 4.5%, which is high.” She pushed back — isn’t this supposed to compound? Worked out, the real return was just 0.64% — below a savings account. CLEC’s stance: keep insurance and investing separate; don’t treat savings/investment-linked policies as wealth-building.¹

The sales trick: dressing up returns with “simple interest”

Savings and investment-linked policies are often packaged with a simple-interest figure that looks good (e.g. “4.5%”), while your money is actually paid in year by year and eaten by embedded costs. Restated as a true compound annualized return, it’s often unbelievably low — here, 0.64%: “16 years and I honestly don’t know what we were saving for.”¹

James in one line: the “wealth-building policies” insurance agents push are mostly traps. Protection insurance (pure term life, medical) has its function, but using a policy as an investment/savings vehicle almost guarantees long-term returns far below index funds.

How to allocate after surrendering (a real Q&A)

After surrendering the policy, the student had ~NT$2.5M and family expenses of ~NT$70k/month. She asked how to allocate. James’s reply:¹

• Emergency fund: keep about six months of expenses; put that cash in 00865B (short-term bills), not a savings account.
• Ratios: 80% in 00662 (QQQ) + 20% in 00865B.
• Leverage: a 2× leveraged ETF (like 00631L) is not necessary for her situation — favor a steady allocation first.
• Mindset: “Buy when you have money, never sell” — investing is a marathon.

This is a concrete instance of the Cash Is Air rule: workers keep 6–12 months of cash and put the rest in QQQ.

⚠️ This doesn’t mean all insurance is bad — protection insurance (accident, medical, term life) genuinely transfers risk. What to avoid are high-cost products that bundle savings/investment into a policy. Summarized from a student letter and James’s reply for education only — not investment or insurance advice.

Footnotes

1. CLEC channel, post “Shocking! 16 years of life insurance returned only 0.64%!”, 2026-06-10 (student letter + James’s reply). Converted source: raw/docs/X及YouTube的貼文/0001貼文〖震驚！16年壽險報酬率只有0.64%！〗 2026年6月10日.md. ↩ ↩² ↩³