Investment Linked Policies (ILP) - Seedly

Investment Linked Policies (ILP)

A mix of investment and insurance coverage

ASK A QUESTION
  • Recent Activity
  • Unanswered
  • Trending

Insurance

Investment Linked Policies (ILP)

Would be good if you are able to seat down with an advisor to look through your policy. It depends on your ILP. Is it heavey on the protection side or is it heavy on the investment side. If it is higher on the protection side, you should be getting quite a good coverage with it if you have started the policy early. If you are buying term and investing the difference, what are the instruments that you want to invest in? These are questions that you have to take into consideration. I have an ILP too and it was done many years ago. It has quite a high coverage and I am still holding onto it. It is already 14 years old now. Policy value almost breakeven but I treat it as a protection policy and I won't be surrendering it any time near.

Investments

Investment Linked Policies (ILP)

Insurance

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.

Insurance

Investment Linked Policies (ILP)

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.

Insurance

Whole Life Insurance

Investment Linked Policies (ILP)

Brandan Chen
Brandan Chen, Financial Planner at Manulife Singapore
Level 5. Genius
Answered on 25 Apr 2019
Same thoughts as Hariz. For WL, you would be getting ECI cover and a fixed premium payment term. However for the ILP which your advisor suggested, you lose ECI cover and it's not guaranteed that you would be able make those returns. The advice provided by your advisor doesn't make sense. What if one is down with ECI? Does your advisor also suggest that you surrender your ILP to meet your expenses?

Investments

Insurance

Savings

Endowment Policies

Investment Linked Policies (ILP)

I think it is better to get a trust worthy insurance agent that is in it for the long term. The agent will take care of you and provide the high touch assistance. Banks are more concern about selling products

Investment Linked Policies (ILP)

Endowment Policies

Savings

Investments

Insurance

Unit Trusts, ETF, Stocks, Bonds, Robo Advisors using UTs or ETFS. If you can't distribute some of the above, take your relevant M8, M8A, M6, M6A papers and partner with iFast, Navigator, FAME, and some Robos that are opening up distribution channels as well.

Insurance

Whole Life Insurance

Investment Linked Policies (ILP)

Your ILP is just another investment vehicle. If your portfolio is sound, there's nothing wrong with withdrawing from it to pay for anything you want. The thing you need to ask yourself now is that do you have enough coverage? The rule of thumb is about 10 X of your income for Death Coverage and 3-5 X of your income for Income Protection Due to Critical Illness. Cancelling any insurance plan early always comes with hefty penalties. And converting it to a paid up policy this early could be an option but i doubt you'll have much coverage left. You should buy a term if you're also planning on investing yourself. A whole life plan can safely provide you 3 to 4% returns after about 20 years. It's a guaranteed asset. While a term plan is just an expense. So make sure you have enough coverage first, and if you don't and need to purchase more coverage, ask yourself if you'll be truly investing the difference and confident in achieving a higher return over the long run. Your age right now and number of dependents will also determine your decision.

Investment Linked Policies (ILP)

Endowment Policies

Comparison

Investments

Insurance

An endowment plan pays you a yearly Reversionary bonuses that once declared, becomes guaranteed from the performance of the participating fund you're investing in. And ILP would mean you're investing into Unit Trusts and your policy will have a fluctuating Net Asset Value. They're typically more flexible and you can achieve much higher returns than endowments at the cost of having no guaranteed amount. You should calculate the non guaranteed amount as part of the policy as it is rare that an insurance company would declare lesser bonuses for the year due to the smoothing of bonuses effect.

Savings

Retirement

Investment Linked Policies (ILP)

Insurance

You have a 40 year time horizon and can invest in the global market to achieve wealth accumulation and higher returns. Your asset strategy will change with your age, slowly moving towards higher guaranteed assets at a later age when you're closer to retirement for capital preservation. Instead of looking for a product to purchase, do some retirement & investment planning. After that, then find products that will fit what you're planning to do and meet your objectives. Also retirement means very different to different people. Some want to live off dividends and coupon payments. A very passive retirement. Some would prefer to do a drawdown retirement to maximize all the wealth they've built over their years. You should speak to a trusted advisor or specialist to figure a path out for your retirement.

Financial Planners

Endowment Policies

Investment Linked Policies (ILP)

Insurance

Kenneth Lou
Kenneth Lou, Co-founder at Seedly
Level 8. Wizard
Updated 3w ago
Hey there friend :) You are not alone. In fact you can consider this reading this: https://blog.seedly.sg/investment-linked-policy-ilp-singaporeans/ We understand the many negativity surrounding an ILP online. Like all of your other insurance policies and investment decisions, below are 5 questions to ask before coming to a conclusion. - What was your intention when getting the policy? Is the policy still on its way to helping you meet that objective? - Can you invest at a lower cost? - Are you able to invest on your own and fetch a higher return? - Are you well-covered or have plans to get insurance coverage after cancelling your ILP? - Does it make sense to carry on with the ILP in terms of cost and its functionality? ” In short, if you are disciplined and know enough to do better financially and in terms of coverage, go ahead and cancel that policy! If not, stick to it.” You have two options: 1) Cancel cut loss and move on "Had a monthly ILP of $200 and the fund was invested in the SG equity market.The policy only gave her a 10% return over 10 years. This was despite the market doing well Straits Times Index (STI) being at a high in early 2017.Should I had terminated it during a market downturn, I might not have broken even. Should I decide to do my own investing I can probably get around 5% yield a year simply by investing in REITs." 2) Make some changes to your existing ILP policy and carry on "I had an ILP for 8 years and the investment results have been negative returns. I would have surrendered it if not for the health insurance component. The decision is partly due to my age, and the premiums to get a brand new health insurance coverage becomes too high.To overcome this, I surrender 90% of the investment after 10 instalments and took the funds out for other uses. So in essence, I still got my insurance policy but paid a small penalty to withdraw the funds out."
Load more questions