Are ILPs good?

Hi David,

I think you need to be a bit more specific with your question.

A chopper can be used to prepare meat by a butcher, or to cause harm by a murderer. Whether or not it is good, is subjective and dependent on the purpose (to cook or to kill) of the tool. So, a chopper can be good, and it can be bad. Or, there could be better options overall than the chopper, depending on the intent.

Having said that, my personal stance is that if I want to invest, I will do so without the typical lock ins that an ILP has, (regardless of the other perks or features), and if I want to insure, traditional whole life, term, etc, will probably be better suited to my needs.

Hi David,

ILPs does has its own benefits especially when you compare it to a whole life participating plans. Pretty soon across the industry, all par-plans will have a reduced Illustrated IRR (GE is reducing theirs this coming July), hence ILPs might potentially give you a higher returns compared to a whole life par-plans.

Most people may be concerned with the insurance charges especially when one is of a older age group. However, ILPs actually charges more fairly compared to lets say a 20-yr term whole life plan. This is because ILPs charges according to one's age. Compare that to a 20-yr term whole life plan, the premiums are actually calculated the same way, just that it is divided into a 20-yr payment period with a fixed annual premium. One will not be paying lesser for a whole life plan compared to a ILP. In fact, one is actually overpaying for the premiums at their current age group.

ILPs also has the flexibility to reduce the protection sum assured to 0 after a certain age, thus leaving the ILP as an investment plan when one thinks that he or she does not need the protection anymore.

Of course, like what Glenn Chua mentioned, if you like to separate insurance and investments, you can consider a term plan and invest the rest in other investments.

Feel free to contact me (email at bio) if you are interested to find out about Great Eastern Life's ILP plan.

Cheers.