facebookMy insurance friend showed me a $3000/month Investment-linked plan, how do I know if it's a good plan for me? - Seedly

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My insurance friend showed me a $3000/month Investment-linked plan, how do I know if it's a good plan for me?

I’m fine with paying his commission, but what’s with the 5% sales charge excluding the 1.5% management fee and $5 monthly maintenance?
Is there a cheaper way to invest under insurance?

Discussion (7)

What are your thoughts?

Elijah Lee

Elijah Lee

21 Jan 2020

Level 18·Independent Financial Advisor at Phillip Securities (Jurong East)

Hi Sora X,

I'll just make my stand very clear here, I don't recommend investing via an insurance policy.

When you invest via a policy, you become bound by the T&Cs of that policy. Now, I don't know what plan you were shown, but I am pretty certain that the fees will add up and eat into your returns, regardless of any 'start up bonus' or the like. You'll probably also face a lock in period of sorts, but without more details I am unable to comment. Personally, I feel that the need to liquidate as I wish is important in investing, as long as I can accept the market value at the time of liquidation.

There are better ways to invest. You can do so on your own terms, or get an advisor to manage for you (note: this is not the same as commiting to a policy)

Think about it this way (again, in general terms, since I don't have details): If you're going to be asked to commit $3000/mth, but won't get any committment from the insurer in terms of guarantees, then why are you giving your guarantee to the insurer that you'll commit that amount of premium? Insurance is about guarantees, and promise by the insurer to uphold the guarantee when the time comes.

Loh Tat Tian

Loh Tat Tian

20 Jan 2020

Level 11·Founder at PolicyWoke (We Buy Insurance Policies)

Why would you want to invest under insurance... unless you are fine with the fees adding it up. and you expect (rightly or wrongly so) for your friend to monitor the investment fo you.

I do not recommend traditional ILP (where 30% premium allocation for first 3 years and slowly builds up to 105% after 10 years). That premium allocation takes more than pure term + investment imho. I did it for my baby and it shows this (at least for 1 of the ILPs). Hence not worth imho.

For your policy, can't comment because no FACTS and FIGUREs to fall back on...

Why not check out:
https://www.moneyowl.com.sg/home

It’s not a linked investment-insurance portfo...

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