Investment Linked Policies (ILP)
Asked on 16 May 2019
I signed up for the Manulife readybuilder about a year ago. The duration for the premiums to be paid is 10 years. However I now feel like the returns are too low.
I was wondering if there was a way to maybe change the plan to something like Investready as i feel that i can take more risk and for more interest.
If not, should I just cut my losses now while the sunken cost aren't as high? Or should I continue and just get more high risk investments to compensate?
Readybuilder is not an ILP. Its an endowment policy.
It's a lower return product because it's low risk.
If you treat the policy as part of your bond allocation in your portfolio its fine.
Just invest in higher instruments as well.
Don't cancel the policy because you're going to lose money, and you'll probably replace it with a bond investment in the future anyway.
16 May 2019
Ready Builder is an endowment and it rewards you with better returns the longer you hold it.
I would say not to withdraw it and use it as a defensive hedge in your portfolio. If you are a young parent, you can also use it as a savings for your children's education when they need it during their university years.
ReadyBuilder gives you a better return then your savings account. Just treat it as a discipline savings and you will be amazed at how compounding interest works in your favor.
16 May 2019