ILP with 106% invested value. Can i make the most of out it?

Hi, I bought an ILP in year 2008. Have yet to break even the investment value (short of $2000). Been reading the numerous posts on ILP, and it seems that i should drop this policy as the high insurance charges will deplete my invested values in my older years.

Since the ILP stated that there will be 106% invested value (only from year 9 onwards), is it a good option to use the ILP to invest in the funds, and encash the investment before old age (e.g. 50yo) to reduce on insurance charges?

Discussion (4)

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Loh Tat Tian

20 Dec 2019

Founder at PolicyWoke (We Buy Insurance Policies)

I would always advise surrender as the last option to consider. And that should be justified mathematically (fixed investment returns and all).

Do get a few FAs who are willing to work out whether its better to invest directly with Robo-advisors/Financial Advisors or to continue with the ILP (and still may have bid-spread charges). Read through your produect summary and do justification based on the information you have.

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Hariz Arthur Maloy

10 Dec 2019

Independent Financial Advisor at Promiseland Independent

Since you've been holding the ILP for 11 years, you're expected to reduce the insurance coverage and rely on the investment returns to take over the protection needs.

This far into the policy, you've probably paid for most charges and are now getting bonus units everytime you invest. That's a guaranteed 6% extra allocation per premium paid.

So just reduce sum assured one the cash value is sufficient and when the cost of insurance climbs too high usully after 55 to 60.

If you want to do it now, you can get a term plan first. But it may not be cheaper than your ILP's insurance costs.

Do take a look at your product summary for charges and the Cost Of Insurance Table.

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