Which plan should I go for for the long term, assuming my retirement age is 55 and my current age is 24?

Hi anon,

You are right that over time, mortality charges of an ILP will increase. This increase is guaranteed to happen, so if you wish to maintain the same level of coverage, your charges will rise exponentially over time.

This creates an issue whereby your investment returns have trouble in keeping up with your mortality charges as you age. And investment returns are non-guaranteed. There's no way of knowing for sure if your investment returns can offset the rate of increase of the charges. Let that sink in for a moment.

I don't recommend mixing investments with insurance. You might want to speak with an advisor to see what options are available for you at this point.

If you're only 24, usually the increase in insurance cost isn't as high until maybe around early 40s. Some people even buy an ILP at 24 because of the lower charges involved and long term investment horizon.

If you've had it since young, you probably crossed the "painful period". Every policy has a painful period at the start due to high surrender charges. That's why sometimes the "breakeven" period is much much later, like 15 years or something.

Depending on your ILP, some even give bonus allocation of 2-5% units for every year you are paying for your premium. But yes, having said that, it is also good to get something permanent to cover you in your later ages without a continously increasing cost of insurance.