Asked by Anonymous
People who buy ILP is either they don't know about the plans or they know what the plans can give to them.
Why people still buy ILP.
1) Flexibility (increase/decrease coverage wo medical underwriting at milestones, premium holiday, these can be very importance for self employed, free lancer)
2) This is not the only protection plans that they have, usually they will have a base plans, when their loans, responsibility does not require that much coverage, they have the option to decrease or surrender the plan.
1) They are not informed of the various cost by their agents (because they are looking at the "big" picture").
2) They looked at it like an insurance product (with the 4% and 8% returns and is convinced).
3) They did their own calculation and found that ILP is slightly better (very rare instances but there are situations it is), since they want to depend on others for investing.
4) Or they just sign and never read the terms and conditions fees etc.
Because they are sold to them by the sales agents.
Don't they see the mortality charges increase with age, high Surrender Cost, Platform Fee, and tons of other fee together mortality charges?
most consumers dont even know all these things and the seller will not want to be transparent with it.
they are misled by the sellers.
ilps are rubbish products, low coverage and non-guaranteed returns for ridculous high premiums.
Protection ILPs that charge only the Net Sum at Risk insurance coverage actually can be a more cost effective BTIR alternative as you pay Cost Of Insurance on the Sum Assured when younger, and it is also a road to self insurance.
You pay lesser insurance when your investment is doing well, but still protect your downside if markets tank and the life assured passes away, you just have to make sure you cancel or reduce the sum assured to 0 when you're in your 60s or so.
Also, ILPs allow you to get both protection and investment with a low starting premium.
I'm not advocating everyone to get it or that I would even recommend the policy, but ILPs have their uses and is not a 'bad' policy per se.