My insurance agent just approached me to get a life term insurance. Should I go for package that include investment or just the Term Product? Any advice?
I know how to invest but just wondering how do you guys go about with this. Do you diversify your investment with insurance company?
Hey there! A term plan is definitely an option for you, in terms of affordability etc. The cash flow will be great for wealth accumulation. Also, some term plans are convertible to life plans during the plan tenure so ultimately, it's making reviews and adjustments to your insurance portfolio gradually with life-stage changes.
There are different Investment-Linked Policy (ILPS) everywhere, with ILPS focusing on protection needs to ILPS that are focused on investments so do check with a trusted advisor. You might want to look at how each insurer's ILP funds are doing at their websites to gauge how their investmenets have been doing (noting past performance is not a guarantee for future gain) to get an idea.
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You have to do your own opportunity cost and benefit analysis.
i am currently paying for a term to 99 coverage of $1mil, but regreted slightly because if i did not, i would have more liquidity to play around with (especially if you can invest and get 5% returns annually and above). But that is better than a whole life plan simply because the coverage is important now (i have a child and housing loan).
If you are buying an ILP, to diversify, i think thats a fallacy because you should diversify so that you reduce unsystematic risk (risk pertaining to a certain economy, sector etc), not diversify to products that invest in the same industry, companies, sector, country etc etc.
Unless you are diversifying the money you would put into funds (you want to diversify your investment between different fund managers who manage and invest differently), then it may make sense.
I don't advise mixing investment with insurance. The way you state 'life term insurance...
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