I'm stuck with AIA Lifetime Protector which is not performing. 4 years in it and I'm alr losing 12k. I alr have a plan which covers me 200k for CI & TD. I think this is redundant. Should I cut loss?

I also have an AIA insurance whole life with limited premium payment duration. The non-guaranteed portion of the surrender value is dependent on their PAR funds, and the dividents are declared yearly which are then reinvested. Is this type of policy considered as a ILP?

Hi Dory,

​

AIA Lifetime Protector (AIA LP) is an ILP with both investment and protection elements. However, I would not recommend it for reasons documented here.

​

The question now is a matter of how much coverage you need. Bear in mind that if you are having any amount of CI cover from this plan, then any CI will trigger a payout from both your 200K plan plus this plan. So I would advise against dropping it first if you have coverage from this plan (I suspect you do) just in case anything happens.

​

The key is for you to work out if your current level of coverage from the other plan is sufficient (i.e is $200K sufficient?) If so, then you may consider cutting loss from this plan, but bear in mind that your coverage will drop as you won't be able to claim from the ILP any more. If having more than $200K coverage is important for you, then you may want to look at getting more coverage from another plan that is equivalent to the coverage provided from AIA LP first, before you decide what to do with AIA ILP.

​

The reason why your policy is losing money is because of the allocation of your premiums to the investments, look at the product summary and you should find a table that shows you this. The allocation in the first 2 years is particularly poor and thus it is the reason why you are losing so much.

​

Personally, I would never go near ILPs with a ten foot pole and the same rule applies to my clients, I don't let them go near it either. You will want to think about what you want to do with this plan, so speak with another advisor if you need tailored advice.

​

Lastly, a quick tip to tell if it any plan is an ILP is to look at the surrender value. ILPs never have a guaranteed surrender value.