I have been using insurance agent. He recommends ilp and medical critical insurance as insurance cover. Is that enough. Is it right?

Hi, I always find it fishy for agents who recommends ILP first because that's the least recommended policy from community and gives high commission for the agent (more incentive to sell this plan).

​

You may want to check for second opinion to see what other agents (try to find multi channel agent; since direct agent representatives are supposed to only recommend the policies under their company) but multi channel agent or "IFA" as we layman says have access to multiple companies policy.. understand, do a comparison to see what cover your needs better before committing.

​

Policies you may want to consider:

• Hospitalization & Rider is a must since hospital bills are huge and unexpected expenses.

• Personal accident for any accidental incidences.. It will pay out at least some for death, permenant disabilities etc.

• Critical illnesses because they happens and you'd need caregiver etc.

​

If you really need for investment I'd think the best is go for pure investment plan but I've also heard that ILP is good for people who have little to spare for a separate insurance + investment plan. Note that ILP first 10years? The contribution doesn't go into the investment portion. You're paying for everything else and later after 10 years then your investment starts working but there are still fees involved which still eats into your investments so ILP just doesn't sound like the ideal plan anytime...

To answer your question, you have to be very specific about what needs are you trying to cover.

​

1) Coverage amount - (calculated based on dependents and for yourself, or even liabilities)

2) Plans and Budget - Do you wish to cover your possible liabilities now (but pay now) or get addtional coverage later on (pay later but usually higher premium)? Your age and life milestone (just married, just had children, just bought a house) matters a lot.

3) For ILPs, are you investment savvy, or wish to passively invest? Can you stomach and be discipline to not withdraw all your investment if market is doing badly?

4) Also, the length of coverage for your insurance needs do matter (whole life? or just for a specific term?). The concept of buy term, invest the rest (BTIR) works if you just require a minimum term coverage till age 65.

5) What is the ROI (return of investment) required?

6) ILPs do have a small advantage (compared to term / whole life) due to lower cost of insurance (COI) for younger years, and becomes increasing / exponentially more expensive as time goes by (especially near age 40 and above). You may also seek to reduce the insurance coverage to a minimum once you hit 40s etc.

7) You also need at least 10 years to breakeven or achieve a modest 4% return (at 13 years) compared to premiums paid.

​

In fact, the wealthier you are, the more you will appreciate insurance as it is also a from of wealth protection (if done properly).

​

I would recommend to really understand since your money is hard-earned, and as many mentioned, nobody is badly affected (except yourself).

​

If you wish to, you may drop me a text or email through https://www.facebook.com/tattian.loh

ilp is a big no no

​

do not mix insurance with investment, period.

​

lmao at agents recommending ilp as insurance cover, really is in for the commissions nia

Erm, what do you want? What did you tell him?