FWD Invest First Plus ILP

ILPs are one of the most misunderstood product in the market so here are some some unpopular truths, insights & opinions that can be helpful;

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• 2 types of ILPs; 1. Pure accumulation or 2. Tagged with whole life insurance. Huge difference between the two and not to get confused. In your example of FWD, it’s the 1st type.
• ILPs have fixed charges, bonuses, benefits (e.g. death benefit) & structures determined by each insurer.
• ILPs are built for long term for a good reason in riding along with the markets to eventual wins over time & also compound interest.
• ILPs are just another investment tool, alongside other unit trusts, ETFs, commodities, Crypto, NFTs etc.
• ILPs stand out positively mostly in bonuses, benefits (e.g. death benefit), management by institutional investors (Privilege access to unique opportunities).
• ILPs stand out negatively mostly in charges (E.g. policy charges, early surrender charges) & flexibility (E.g. 10 years policy). Similarly, all investment tools will take some form of charges & you will be surprised some tools actually charge more.
• ILPs are great for people who wants to do well in investing over a period of time yet not having to manage it by self.

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And the biggest truth;

ILPs gets the most hates from people who either don’t use them plus misunderstands it, or by those who surrendered early along with surrender charges. Meanwhile getting the most love from people who earned big from them.

This is exactly the same with those who invests in the stock market or any other investment or wealth accumulation tool.

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In all accumulation tools the goal is to earn as much as possible while paying the least amount of charges therefore it is understandable that people focus on charges.

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With your question on FWD, it is a very new ILP plan. It is important to know how the charges work because it lasts throughout the policy term as written in the contract. Which is different from some insurers where policy charges ends on the 10th year. This matters a lot as most will keep the plan for a long time due to compound interests. Further, the fund returns matter too. So in terms of comparison it is a decent plan but there are better ones. Feel free to reach out to know more.

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The question to ask is, can ILPs earn monies? The answer is yes, especially in huge amounts if you completed the plan to maturity. If it only loses money then the governments or companies won’t allow to sell them. In fact, many high performing investors use them too because it provides a good secure and safe long term account, inclusive of perpetual bonuses & death benefit.

Nothing new with this kind of ILP plan. The insurance industry has progressed from the traditional insurance-focus ILP to this new style investment-focus ILP (you should notice that the insurance coverage is 105% of policy value).

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Why do you think they entice you with bonus units to take up the ILP? As what @YJ had put it plainly, those bonus units are paid from your own premium to hook you into investing with the ILP, and they can continue earn from the fees.

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Do you notice what are the so-called curated funds in the ILP? They are unit trusts provided by fund houses, so the ILP is just a wrapper around the funds and they charge you an additional layer of fees for that. Except for some funds available only to Accredited Investors, you could invest in most of the funds directly thru unit trust platforms at a lower cost.