facebookShould i get a saving plan insurance or Investment-Linked Policy for my retirement? I am 25 years old. And i want to set a monthly sum. But I cant decide which is better? - Seedly

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Anonymous

09 Mar 2021

Insurance

Should i get a saving plan insurance or Investment-Linked Policy for my retirement? I am 25 years old. And i want to set a monthly sum. But I cant decide which is better?

Discussion (8)

What are your thoughts?

Why not have both. Both are very different instruments and can serve different purposes

JeffreyLeeZQ

JeffreyLeeZQ

09 Mar 2021

Level 9·Writer at Jeffreyleezq.com

You can consider Dollar Cost Averaging into Passive Index ETFs, or if you want less effort you can also consider the likes of Robo-Investors or Regular Savings Plans, though there will be a wrap fee / management fee for the latter two.

But why not consider doing it yourself since you have a long time horizon before retirement?

I personally feel that any of the aforementioned would easily be a better choice than a saving plan or ILP, though it ultimately depends on your risk-appetite and comfort level.

All the best.

- Jeffrey (jeffreyleezq.com)​​​

If you can self read up and do you own investments, you should not even buy these policies!

These policies are for people who are lazy/don’t have time to read up & manage their own finances! :)

If you can do investments urself, you will save alot of money ((no need to pay your agent high amount of fees)) 🥲

William W. Archery

William W. Archery

09 Mar 2021

Level 3·Financial Consultant at Financial Alliance Pte Ltd

Hey there! In my humble opinon, whether you should get a savings plan or ILP is fully up to your risk appetite and of course, how much you'd want to get in the long run. Seems like I'm digressig now but lets say the returns for bonds are averaged at %4 and returns for equity is averaged at %8. Lets keep this at the back of our minds.

So talking about savings plan. Usually the par funds may be invested in lets say 80% bonds and 20% Equity. So since we are investing more into bonds, our returns over the years may be closer to %4, depending on the company, it may be slightly more. This is relatively safe, but returns are not superbly high compared to other methods of financial growth!

In comparison, ILPs are more flexible whereby we can change the composition of our portfolio from maybe a selection of 1000 funds provided by the company to suit our needs and risk portfolio at different times. Of course, depending on your composition, your investments may reap higher returns, but may also incur higher risks! Other things to take note is if the ILP has a life insurance portion linked to it as well (some company have, some don't! do check before buying!), usually if that is the case, the insurance portion may eat into your investment portions and may cause issues in financing down the road so do be mindful.

Lastly, you didn't express interest in this but it might also be something you'd eventually be interested in getting one day, which will be Unit Trusts. Essentially they work like ILPs, but they are more flexible as they dont have lock in periods and you can chose from many more funds not limited by the insurance companies.

But of course, speak to your financial consultant before making this decision! Some FCs feel more strongly bout certain methods than others, but ultimately it is up to you. Do also note that not all FCs can provide you with Unit Trust solutions. Hope my thoughts help, thanks for reading! :)

Neither. Cost is too high, especially for ILPs. In today's world, you have products and service prov...

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