There are single premium ILPs that offer a lower sales charge (~1.5%). And I'm also guessing there are initial bonuses being given to you. Nothing wrong with opting for a single premium ILP, but do take note that 5% is quite a huge chunk. Do ensure you're aware of the portfolio, funds you're buying into.
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28 Aug 2020
For this ILP that you are mentioning about, is it for AIA ILP?
Is this for cash, SRS, or CPF?
2-3% one time charge is fine if there's a portfolio and strategy in place.
1% if you're setting up an RSP.
The policy I believe you have in mind has no ongoing annual fees so in the long run, even at a 5% charge for every purchase, it'll cost less than an ongoing 0.5% charge after about 14-17 years after allowing for 6-8% yoy growth.
The graph below explains this. Blue line is 5% sales charge for every purchase, while orange is 0.5% annual fee with 0 sales charge with 8% p.a growth.