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Anonymous

04 Aug 2020

โˆ™

General Investing

What are some pure investment plans you would recommend?

I have all insurance covered for my health. Hence I am looking for pure investment plans. Some agents introduced me to ilp but I dont need the coverage. Any advice?

Discussion (14)

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Elijah Lee

06 Jun 2020

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi anon,

There is no need to get a 'plan' to invest. You do however need to have a plan (strategy) of your own. None of my clients invest via ILPs. They either do so via the POEMS platform on their own if they are able to manage, or work with me via advisory methods if they require me to manage due to lack of time, knowledge, etc. Both can work equally fine.

All you need is an investment platform to access the various asset classes such as stocks, UTs, ETF, bonds and you are able to start.

Investing via an ILP (or any sort of policy) would subject you to the constrains of the policy. And even in an ILP which does not have any insurance coverage but gives you bonus 'units', you have to be aware of the costs involved, the lock in, and the

penalties for early withdrawal and termination. All of which makes it rather unattractive in my view.

For me, the idea of investing is for something that's long term, without a specific time bound horizon. An investor would want to have the flexibility to start, stop and restart their investments depending on their individual circumstances. There's no need to commit to a 30 year investment policy to do so.

Go to libbyapp.com and login via your NLB account, and go borrow as many personal finance / value investing books to improve your financial literacy instead of needing to ask anonymous online sources as a mental crutch for piecemeal advices which fluctuate as frequent as the sentiment wavers

Nigel Tan

06 Jun 2020

Executive Senior Financial Planner at Great Eastern Life

You could consider Great Wealth Advantage; pure investment no insurance.

Yes it is an ILP with dollar cost averaging & portfolio fund management services. But there's not insurance charges linked to it.

There's also auto rebalancing features to help realise gains automatically, where units are bought and sold upon hitting certain thresholds. This allow for systematic growth of investment value over time unlike the traditional ILP.

Fund switching is free, no bid offer spread of 5% like before.

Pros

First year - welcome bonus of 5%

10th year onwards - loyalty bonuses of 5% each and every year.

Diversification investments across assets and time periods

100% allocation of premium into units upfront unlike some ILPs that buy in 25% of units y1, 50% units y2, 75% units y3 (but with flexibility to withdraw)

Cons

But there is also the 2.5% annual charge to the policy.

"Forced lock in" of 10 years, like endowment policies with higher surrender charges upfront but able to take premium holidays from the 5th year onwards

https://www.greateasternlife.com/content/dam/gr...

Hey there.

Some questions you might want to ask yourself would be:

What is your investment horizon?

10 years? or?

How long are you wilIng to fund
the plans?

As they have minumum years that you have to pay.
Why are you investing?

For capital growth? For dividend income?

For retirement?

When will you liquidate?

And as mentioned all pure investment plans offered by insurance company are ILPs.

The newer ones in the last few years are without sum assured and the only death benefit or terminal illnesses benefit is your capital plus 1 - 5% more (101% / 105%) or account value depending whichever is higher. โ€‹โ€‹โ€‹

Hi Anon,

Dont get ILP. The only reason those insurance agents introduce ILP to you is because they...

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