facebookRecommended Investment Linked Policy as replacement for term/life insurance? - Seedly

Anonymous

25 Jul 2020

Insurance

Recommended Investment Linked Policy as replacement for term/life insurance?

Recommended GE smart life advantage policy by agent when i am looking for coverage for CI,TPD and death.I am aged around 21+ and will not earn any income for the next 3-4 year due to studies.
When i mention that the 5% fixed bid spread meant that paying premium using the unit trust is more expensive compared to paying cash.I was told to look at it from the protection side.I was wondering if i miss out on some perspective in which an ILP is more suitable for me than Term insurance.

Discussion (13)

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Lim Chun Long Jimmy

16 Nov 2019

Co-founder at PolicyWoke (Traded Endowment Policies)

Since you will not be earning any income for the next few years, it is better that you choose term plan(s) instead of investment-linked plan(s) to minimise costs and maximise coverage.

Given you circumstances, term plans would be cheaper & more suitable for you.

View 1 replies

Walk away. At your age, term plans will be the cheapest for coverage.

There are a lot of fees involved when it comes to an ILP policy. The bid offer spread is one, monthly fees and management fees are the other common ones. Never mix investment with protection in the same product, and get involved with them separately. Agents like to recommend ILPs cos commissions tend to be higher as compared with a term plan.

And frankly, unit trusts are crap for investment returns. Learn how to invest on your own instead. There's a lot of sharing on this in the Seedly questions section; you may wanna browse through.

Do reach out if you need further help. Cheers

View 3 replies

Brandan Chen

15 Oct 2018

Financial Planner at Manulife Singapore

Do consider the following pointers:

1) You are currently not earning any income. And Life Insurance is mainly for income protection. Hence, consider getting yourself a Integrated Shield Plan (if you have not done so) so that your treatment for CI, Serious accidents would be covered

2) If you still want some form of coverage, consider looking at renewable Term insurance as per what Xiaohui suggested. With that, you can lock in the coverage amount and switch to a whole life plan or Term Insurance in the future when your budget increases.

Unless your agent is proficient in allocating ILP funds and can potentially grow your investments for you (which most agents are not) it is not likely that you can stop paying for this after 10 years while maintaining the coverage.

Soon Xiaohui

14 Oct 2018

Analyst at Common Place

Hello there, as budget is a major concern for you, a term plan is strongly recommended for you.

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