Investment Linked Policies (ILP)
Asked by Anonymous
Asked on 03 May 2019
Premium holiday: you may temporarily suspend your regular premium payments by applying for a premium holiday after the Minimum Contribution Period, as long as the value of the Accumulation Units Account of the policy is sufficient to cover the relevant policy charges due. With no premium contribution during premium holiday, the account value of your Pulsar II policy will be significantly reduced due to fees and charges, which are still deductible during premium holiday, and your entitlement to loyalty bonuses may also be affected.
So basically after paying your premiums for a certain period of time, you can exercise the option to stop paying premiums. However, fees and charges will continue to apply, so what AXA will do is to sell the units you bought to service the premiums. In this manner, the value of your AXA Pulsar plan will fall signifcantly, and you may not get the loyalty bonuses too.
It is not wise to do premium holiday for most ILPs, at least until 10 years have passed. For details, require the product summary and fees to really look into it.
06 May 2019