Should I withdraw from my great eastern ILP and purchase a term/whole life insurance product instead? - Seedly
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Anonymous

Asked 4w ago

Should I withdraw from my great eastern ILP and purchase a term/whole life insurance product instead?

I'm 29 years old male, own the policy for 8 years now and have made 1 withdrawal. Annual premium around $1800

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Top Contributor (Jun)

Level 5. Genius
Updated 1d ago

Generally, it is dependent on the purpose behind why you purchase the policies. Investment-Linked Policy normally a life insurance plan that constitutes an investment component. Thus, if you are simply seeking coverage, it might be good to withdraw. However, if your policy has been providing a good return on investment, you might want to continue with it.

If you are considering between Life and Term Policy, do check out this article.

If you would like to find out more, do reach out to us and we will follow up with you.​​​

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👍 9

Hey there!

If your great Eastern ILP has been profiting because of good fund allocations and your agent is trusted to monitor your portfolio, you might want to reconsider withdrawing it but ultimately, will need to chat more with you to get to know your needs more though. Some ILPs fall under the category of "protection-based ILP" so you might want to see if the coverage offered by a protection-based ILP is comparable to the one offered by a Life/Term plan. If it's a 100% investment plan, you might want to get a term plan outside.

There are often charges associated with early surrender so you might want to check what are the charges about.

Financial planning is an integral part of life. You can reach me here to find out more.​​​

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P
PillowCase
Level 5. Genius
Answered 2w ago

Generally, life insurance coverage can be split into three life's major event,

  1. Pre-Mature Death

  2. Total & Permanent Disability

  3. Critical Illness

Death Coverage

There are a couple of factors that we need to clarify and plan before we can establish whether there is a need for death coverage if you are single. For example, do you have any dependents? Do you have any liabiltiies?

Based on the latter example, just because you are single doesn't mean that your liabilities will be written off upon death. Therefore, there exists a need for proper estate planning to this end.

More Details:

5 Reasons why You need Life Insurance - Death Coverage

Total & Permanent Disability

Since you are alive and continues to live, there exists a need to be insured.

More Details:

5 Reasons why You need Life Insurance - Total & Permanent Disability Coverage

Critical Illness

Similar to the rationale for Total & Permanent Disability, there exists a need for you to be insured.

More Details:

5 Reasons why You need Life Insurance - Critical Illness

On the whole, these are general guidelines which may or may not work for you. Therefore, you are encouraged to conduct comprehensive financial planning. Through this process, it ensures that we are well-planned ahead in life.

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👍 0

You should just give up the ILP and buy term life :)

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👍 0
Question Poster

4w ago

Hi Charmaine, could you share more on your view, and why? What I'm told is that ILP's insurance coverage becomes worthless at some point, ~72 years old for me. Therefore, at that point i should just withdraw the lump sum and relinquish the insurance plan.
S
SkyFP.com
Level 4. Prodigy
Answered 4w ago

It is most important to recognise your current situation.

Firstly, is to review the current status/performance of the ILP. I hope your planner is able to provide you with a good view of the current market situation as well. The features of the ILP also matters.

Next is to review the coverage you need and the cost of coverage. I do not know the coverage you have through the ILP, or if you can reduce/increase the coverage. You can compare the COI in the ILP vs the cost of term, which I suspect, in the long run the term makes more sense. If so reducing the sum assured in the ILP and increasing coverage using term makes perfect sense.

Do review both aspects to give yourself an idea what to do.

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Hi Anon,

I think at this point in time it would be hard to advise, but if the selected funds in your policy have been profitting and your current agent has been doing good follow-ups with you, I think you should continue. As the policy usually also has whole life coverage for you.

But if you are looking at increasing your coverage and considering affordability then do consider term.

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Not enough context in order to give you responsible advice. Here is what I will suggest you to do:

Firstly, evaluate the fund performance of your current portfolio and determine whether the policy is capable to help you achieve your goals and needs for your future.

If not, determine whether you can make any changes to the policy in order to stay in line with your needs.

If this solves your problem, then you are all good. Above all, do a comprehensive review with your agent to ensure that your policy is in a good condition.

I share quality content on estate planning and financial planning here.

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CH
CH
Level 7. Grand Master
Answered 4w ago

Depends on whether keeping the ILP still make sense. eg is it in profits, what is the coverage and policy terms, does it suit your needs, what is your purpose of insurance, are you comfortable of making own investment,...

don't let your ear soft, and have doubts just from listening to some "buy term invest rest", or some trading course salesmen. everyone has their own agenda. do your own needs analysis. if they don't come up with some catchy slogans, they will not be able to sell you some stuff you may not need.

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