Newbie Guide: How to Find a Good Agent for Investment & Insurance?

HandsTied

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Of course there are massive costs in the early years - how else is the insurance company going to recoup its loss in the event the policy is terminated early? It is very common to see ILP holders viewing it as an investment product when it is not meant to be one. When seen in that misguided light, the insurer has to take sufficient precaution against early termination.

That said, certain companies have better plans than others, depending if the penalties are front or back ended.

I'm sorry, pray tell - what losses exactly does the insurance company suffer when the plan is terminated early?

Nobody is saying that insurance or investments are free from costs or charges. Costs and charges are inevitable, but massive and hefty upfront charges of an ILP are avoidable.


The charges are inconsequential IF you view it as a life policy for the long term, and have purchased it at an age where your risk of death, TPD, TI and CI (if you have a rider that covers it) is very low, I.E. Early 20s to 30s. As mentioned, most people buy ILPs with an incorrect outlook in the first place, but this is an issue that is dependent on the agents who sold them.

Of course it's inconsequential to you since the more the policyholder puts in, the more you stand to earn.

Of course the premium holidays and coverage adjustment are just gimmicks - they are there as 'bonuses' for the less informed advisers to sell as 'perks'. I never use them as a basis for recommending a product.

Then what is your basis for saying that ILP is good insurance when BTIR gives all of its benefits and keeps costs and charges equitable for the consumer?

That option is possible - if you have sufficient cash flow. Sufficient term coverage of an adequate duration is expensive for young adults who are just starting work, or young families who have high liabilities, since you are essentially paying now to offset the charges you'll incur at a much later date.

:s13: Thanks for the laugh again! I begin to wonder if you're just parodying the usual insurance agent who just peddles products for commissions and incentive trips.

Did you just say that term insurance is expensive, and since we're comparing it to ILP here - MORE expensive than ILP? :s13:

Whatever advantages the Yearly-Renewable Term of an ILP gives over a level term is obliterated by the fact that the policyholder suffers huge upfront charges in the early years of the policy and hence the huge opportunity loss arising from time value of money and compounding effect. In fact, the policyholder is worse off.

In any case, if one believes in the benefit of a Yearly-Renewable Term, then get a Yearly-Renewable Term on its own! QED.

I get the point about risk level, effect and (potentially) better returns, but why liquidity when the purpose of an ILP is not as an investment tool? You are not supposed to withdraw the value in the first place.

The policyholder's liquidity is of course irrelevant to you since you have everything to gain from the policyholder losing his/her liquidity and nothing to lose.

The time taken for your investment to grow to a certain level has to be taken into account as well. It is similar to the break even point for an ILP's fund.

This is akin to saying: There is time taken for someone to drive from Jurong to Tampines. It is similar to the fact that there is time taken for someone to walk from Jurong to Tampines.

Let's assume John has $2,000 for insurance and investments. He picks up a term policy for $200 and puts $1,800 into an investment fund. Peter puts $2,000 into an ILP life plan.

How long does an ILP life plan take to break even at 9% pa? I have a sample quotation that shows 13 years (This is with the insurance portion "maxed out". I'm sure there are advisers who will reduce the insurance portion so the investment part looks more impressive.) At a similar assumed 9% pa return (with it reduced to 7.5% to include expense ratio), a BTIR strategy will take 2 years to "break even", i.e. 2 years x $2,000.

Even if you take liquidity out of the picture, the BTIR strategy will provide a better "cash value" based on simple mathematics. The reason is simple - the BTIR has nearly all of the "premiums" ($1,800 out of John's $2,000 budget) invested, whereas Peter has given most of his first few years' premiums to the agent. Due to the upfront nature of the massive charges as well as the time value of money, the ILP will always be a inferior to the BTIR. Investment returns aside, insurance coverage wise as well.


The other factor to consider is your risk appetite - a risk-inclined person may want to consider the potential upside of the ILP's sum assured based on the NAV being greater than that offered by a traditional policy. The downside is that if he (or she) bases his (or her) protection on that policy alone, there is a sizable risk involving inadequate protection in the event of a market downturn.

I'm comparing between ILP plan vs BTIR. BTIR is superior to ILP plans aside from "whole life cover" - which is a moot point because ILP charges escalates too much in the older years of a policyholder and becomes unsustainable, and BTIR obviates the need of insurance through accumulating enough for self-insurance.

Anyway I need to summarise some points you've made in larger font because they're too hilarious for people to miss:
  1. Term insurance is more expensive than ILP
  2. ILP charges are inconsequential
  3. Liquidity is not important
  4. Akan datang, 0% in first year never mind cause need time for the money to grow mah. Will be as fast as having my money 90% invested right from the first year.
 
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HandsTied

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I repeat - There is no difference* between an ILP life plan and a BTIR strategy except for this simple way the agent is remunerated:

You go through Agent A to buy a $300,000 term insurance for $200 and invest $1,800 into an investment portfolio. Insurance policies typically have a high percentage of the first year premiums paid to the agent (and manager), so some 90% of the $200 is paid as distribution costs.

Sales charges and management fees of investment funds, however, are relatively low at say about 3.5% of the $1,800. Hence, $1737 of the $2,000 budget is invested straight away.

The agent (and manager) earns about $243 in the first year.

OR

You go through Agent B to buy a $300,000 regular premium whole life investment-linked policy (ILP) for $2,000 which is no different from a term insurance and investment funds bundled together. For this "privilege" of bundling the two things together as a single insurance policy, some 90% of the $2,000 is paid as distribution costs to the agent and his manager, leaving $200 to be invested.

As if that wasn't pathetic enough, there's still the cost of insurance to be considered. All $200 is deducted for insurance costs. To add insult to injury, this $200 is used to buy units at a offer price, and is sold at a bid price to pay for insurance charges, adding yet another layer of unnecessary fees to the client.

The agent (and manager) earns $1,800 in the first year.

It is not hard to see why some (or most) agents love to talk about the merits of an ILP to no end when BTIR does everything an ILP does but is much better for the client. While the agents earn some $1,500 more in the first year (not to mention subsequent years), the true cost to the client is much greater because this charge is upfront. The investment is stunted from the beginning and he/she will lose a lot of liquidity.

Moreover, young working adults have a great need for insurance and might not have the budget to do both insurance and investment. $100 can get a young person a rather decent amount of coverage in term insurance. What can an ILP give other than a pathetic payout at $100 a month?

This can be very easily proven with Benefit Illustrations of ILP products. Agents who recommend ILP products can only use half-truths, myths and sometimes outright lies to cloud the judgment of their "clients". In fact, some agents are deluded themselves. I believe the real culprits here are the agency managers who have brainwashed the agents who in turn fool their "clients". I think a more appropriate word for ILP buyers are "suckers", "marks" and/or "victims".

EDIT:
*Realised I was giving too much credit to ILP plans when I said there were little differences. Actually, there a few more ways that an ILP is way inferior to a BTIR strategy aside from being numerically lousier.
 
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chopra

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I repeat - There is no difference* between an ILP life plan and a BTIR strategy except for this simple way the agent is remunerated:

You go through Agent A to buy a $300,000 term insurance for $200 and invest $1,800 into an investment portfolio. Insurance policies typically have a high percentage of the first year premiums paid to the agent (and manager), so some 90% of the $200 is paid as distribution costs.

BTIR strategy can be done either personally or engaging a professional. In your example, you take it that one has to invest it through a professional. But if I were to invest it personally, the distribution costs will be low.
 

Kheetat

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Once again, I see that there is a heated debate between term and ILP.

While I do agree that ILP is meant to be a protection tool, it may still be a better savings tool, compared to endowments, for its potentially higher growth and flexibility in premium payment.

Interestingly, when you discuss about ILP, you request for a BI. When you invest in stocks and share, do you actually get a BI from your remisier or poems?

I was quite taken a back when mentioned that premium holiday and vary insurance coverage is a gimmick. In my work place, premium holiday and making changes to insurance coverage is regularly practiced by out clients and my colleages.

With just $200/mth, I can insure my young clients with 5 times of their annual income. 10 years later, I still can insure my young-turned-old clients with 5 times of their annual income without increasing premiums, even though they have significantly increase their earning capabilities.

When they retire, e.g 60/65, they are self-insured without anymore premium payment. Technically, it will be called Premium Holiday - No fees for that.

ILP is for clients who have risk tolerance and the intention for it is clear. Protection today, Emergency reserve tomorrow.

Once you are in the contract, your life will be protected and structured and whatever life throws you will not affect your retirement.

On the other hand, BTIR is only suitable for individuals who have the discipline to invest regularly and knows what they are doing. And also, my investment-savvy clients do their own investment while getting themselves term plan. What is interesting is that they also have a wholelife plan just in case of rainy days.

p.s. Why does the premium allocation always get the black lights. Just like all other traditional plans, they have certain cost to set up the policy. Why no one mentioned about the $0 cash value in the first 2 years? While ILP still have some forms of cash value in the first 2 years, it is high cost?
 
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lzydata

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With just $200/mth, I can insure my young clients with 5 times of their annual income. 10 years later, I still can insure my young-turned-old clients with 5 times of their annual income without increasing premiums, even though they have significantly increase their earning capabilities.

When they retire, e.g 60/65, they are self-insured without anymore premium payment. Technically, it will be called Premium Holiday - No fees for that.

I don't know what is the numerical figure for 5 times of your clients' annual income or what it covers. But how much would the same coverage cost them every month if they bought term insurance? Or alternatively, how much coverage can they buy with $200/month if they bought term?

Probably the cheapest term insurance in Singapore is SAF insurance by Aviva that covers death, TPD and personal accidents including SAF-related accidents. A SAF regular, NSF, DXO, DSTA staff or NSman can get the maximum $600k coverage for $76.80/month; his dependants (spouse or children) can get it for $60/month. (Those premiums apply up to age 65.) They also have a CI rider at the maximum $300k coverage for $30/month more (for <46 years old, then premiums start rising pretty quickly). So $200/month could buy a young couple $1.2m life/TPD and $600k CI coverage altogether. If that is too much, they could choose to spend only half that and use the remainder for other things like their child's education.

If I guess, I believe whole life insurance costs at least 5 times, maybe 10 times the equivalent in term. Put another way, it means paying thousands of dollars more in distribution costs to the insurer.

I am not opposed to whole life insurance. I think having some coverage for one's entire life is good because term premiums get prohibitive past 50 and especially if a person develops some medical condition later on. But most of the need for insurance comes from a person's 20s to the 50s or so because that is when he has to make sure if anything happens that he and his dependants can survive. By age 50-60 the person and his spouse would be retired or nearly there, and his children would already be finishing up school or working already. Where the need for large coverage is greatest, it should be done with term; where the payout is nice to have but not crucial, like a CI above age 65, then whole life can kick in.

How can people who understand the need for insurance, want insurance and buy insurance still end up underinsured? Because the industry only sells them the expensive policies that profit themselves the most. The insured then has to cut back on the coverage and tell themselves they've done enough, when actually it may not be enough.

If people were actually told about the term option as opposed to whole life or ILPs they can make an informed decision about how much to allocate to what type. Maybe if they are not confident or not interested in finances they will freely consent to the insurance company forcing them to save and investing for them. But if people were all so informed they might realize just how much fees and charges they are paying to the insurance company and what pathetic returns they get with these policies. More would opt for term and the industry would lose out big time, so better they stay ignorant.

In particular, perhaps you can explain the benefit of ILPs as opposed to whole life policies for clients, as they seem to benefit only the insurance agents, companies and fund managers. Mix insurance and investment and you get expensive insurance and a lousy investment. It is also true for whole life, but at least there is a role for it. What is the role of ILPs?
 

HandsTied

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Once again, I see that there is a heated debate between term and ILP.

Once again another agent coming to justify his shortchanging of his clients by selling on the non-existent merits of ILP with half-facts and ignorance.

While I do agree that ILP is meant to be a protection tool, it may still be a better savings tool, compared to endowments, for its potentially higher growth and flexibility in premium payment.

Agent technique: Straw man argument, half-truth.

Nobody is comparing to endowments which similarly shortchanges the client while profiting the agent inequitably. Also, whether you try to market ILP as a protection tool, investment tool, or all-in-one insurance plus investment koyok tool, a BTiR strategy still excels in both adequate insurance and investment for the insured.

Interestingly, when you discuss about ILP, you request for a BI. When you invest in stocks and share, do you actually get a BI from your remisier or poems?

Agent technique: Straw man argument, red herring

Interestingly, whenever the BI of ILPs are requested, no agents want to show it. BI is requested so that opponents of ILP can use hard facts and numbers to ground the argument but ILP agents know they only have mistruths and skewed opinions to defend ILPs.

BTIR does not mean only being able to invest in stocks and shares. It can be in the very ILP fund that your lousy ILP life plan is invested in just so someone can take the two projections printed by the same company to compare.

It is also irrelevant whether stocks and shares have a BI as the charges are transparent and very clear to the investor, as with most investments in the market.

I was quite taken a back when mentioned that premium holiday and vary insurance coverage is a gimmick. In my work place, premium holiday and making changes to insurance coverage is regularly practiced by out clients and my colleages.

Agent technique: Agent's ignorance, company training/culture

"Premium holidays" are a marketing gimmick, full stop. The premiums are still paid for the insurance of the ILP through the insured's own investment funds which are bought at offer price but sold at bid price to fuel the insurance charges. A BTIR person would simply just upkeep just his inexpensive term policy through his liquidable investments or just merely pay the term insurance without suffering a bid-offer penalty. There is no real benefit tangible to the policyholder for taking a premium holiday.

Also, some companies have the cheek to underwrite the insured after he comes back from a premium holiday. Do you know whether your captive company AXA does this? Do you need to check to know? Lucky for you this is an Internet forum and hence you can go check it out so you don't look completely ignorant.

With just $200/mth, I can insure my young clients with 5 times of their annual income. 10 years later, I still can insure my young-turned-old clients with 5 times of their annual income without increasing premiums, even though they have significantly increase their earning capabilities.

Agent technique: Half-truth, poor insurance planning

From the beginning you have already skewed the premiums for insuring your clients up to $200 when it costs less than that to insure them for 5 times. 10 years later you merely shift the premiums more towards insurance rather than investments to "adjust to their increased needs without them paying more". They have already paid more than they needed to from the start.

In fact ILPs and the so-called features are irrelevant here because at $200 budget, the young person can and should settle very properly his insurance needs first instead of doing an all-in-one ILP plan which neither covers him for insurance nor give a return good enough for retirement. 5 times annual salary - do you ILP proponents like to tell jokes? Must be a very humorous bunch since you guys laugh all the way to the bank every time you sell an ILP.

When they retire, e.g 60/65, they are self-insured without anymore premium payment. Technically, it will be called Premium Holiday - No fees for that.

Agent technique: Lies and misrepresentation

Do you even know what "self-insurance" means? What a blatant lie!

There are insurance charges which escalates exponentially.

ILP is for clients who have risk tolerance and the intention for it is clear. Protection today, Emergency reserve tomorrow.

Agent technique: Half-truth

Indeed clients who have high risk tolerance can go for this high risk low return product, and the intention is very clear that the product is meant to enrich the insurer and agent who can earn an inequitable commission and go for incentive trips and enjoy fat bonuses.

No matter how you spin it, BTIR will give better protection today, tomorrow, or 20-30 years from now, or 40-50 years from now. It will also give better cash reserves from the get go. ILP is definitely good for financial freedom - the financial freedom of the agent.

Once you are in the contract, your life will be protected and structured and whatever life throws you will not affect your retirement.

Agent-technique: Misrepresentation, half-truth

BTIR also covers the insured while building a sum of money for self-insurance. ILP covers the insured at a high cost and does not do well in building the insured's ability to self-insure.

Insurance, especially your ILP, DOES NOT protect whatever life throws at you. If you do not meet the contractural definitions, you do not get a payout despite having a legit need for the money.


On the other hand, BTIR is only suitable for individuals who have the discipline to invest regularly and knows what they are doing. And also, my investment-savvy clients do their own investment while getting themselves term plan. What is interesting is that they also have a wholelife plan just in case of rainy days.

Agent technique: Misrepresentation and lies, half-truth

Once again, an ILP is nothing more than a term insurance pegged to investment funds with hefty upfront charges. It is as easy to BTIR as it is to sign up for an ILP. Financially astute people can definitely seek different things to "I", but the everyday folk can simply just get a term policy and subscribe to investment funds. Even better, they can tailor their financial portfolio to their risk tolerance while an ILP usually has a very limited range of funds.

p.s. Why does the premium allocation always get the black lights. Just like all other traditional plans, they have certain cost to set up the policy. Why no one mentioned about the $0 cash value in the first 2 years? While ILP still have some forms of cash value in the first 2 years, it is high cost?

Agent technique: straw man argument, half-truth

There are costs involved for a policy, but a BTiR person only receives such hefty costs on his term policy. An ILP person unnecessarily receives this cost on the whole lot of his premiums.

Also, nobody is comparing ILP to traditional whole life plans. ILP is a term plus investments bundled to shortchange the clients at no real benefit. BTIR is superior for the insured. Of course, inferior in agent remuneration.
 

OddEye

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Summary... ILP is just using investment earnings to cover for premium, that is why they are cheaper than typical life plan (supposing investments are gaining in value). If there is a single greatest benefit I see in ILP, that would be no switching cost. But the worst feature is the increasing dependency on investment performance as you grow older
 

Kheetat

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Once again another agent coming to justify his shortchanging of his clients by selling on the non-existent merits of ILP with half-facts and ignorance.

Agent technique: Straw man argument, half-truth.

Nobody is comparing to endowments which similarly shortchanges the client while profiting the agent inequitably. Also, whether you try to market ILP as a protection tool, investment tool, or all-in-one insurance plus investment koyok tool, a BTiR strategy still excels in both adequate insurance and investment for the insured.



Agent technique: Straw man argument, red herring

Interestingly, whenever the BI of ILPs are requested, no agents want to show it. BI is requested so that opponents of ILP can use hard facts and numbers to ground the argument but ILP agents know they only have mistruths and skewed opinions to defend ILPs.

BTIR does not mean only being able to invest in stocks and shares. It can be in the very ILP fund that your lousy ILP life plan is invested in just so someone can take the two projections printed by the same company to compare.

It is also irrelevant whether stocks and shares have a BI as the charges are transparent and very clear to the investor, as with most investments in the market.



Agent technique: Agent's ignorance, company training/culture

"Premium holidays" are a marketing gimmick, full stop. The premiums are still paid for the insurance of the ILP through the insured's own investment funds which are bought at offer price but sold at bid price to fuel the insurance charges. A BTIR person would simply just upkeep just his inexpensive term policy through his liquidable investments or just merely pay the term insurance without suffering a bid-offer penalty. There is no real benefit tangible to the policyholder for taking a premium holiday.

Also, some companies have the cheek to underwrite the insured after he comes back from a premium holiday. Do you know whether your captive company AXA does this? Do you need to check to know? Lucky for you this is an Internet forum and hence you can go check it out so you don't look completely ignorant.



Agent technique: Half-truth, poor insurance planning

From the beginning you have already skewed the premiums for insuring your clients up to $200 when it costs less than that to insure them for 5 times. 10 years later you merely shift the premiums more towards insurance rather than investments to "adjust to their increased needs without them paying more". They have already paid more than they needed to from the start.

In fact ILPs and the so-called features are irrelevant here because at $200 budget, the young person can and should settle very properly his insurance needs first instead of doing an all-in-one ILP plan which neither covers him for insurance nor give a return good enough for retirement. 5 times annual salary - do you ILP proponents like to tell jokes? Must be a very humorous bunch since you guys laugh all the way to the bank every time you sell an ILP.



Agent technique: Lies and misrepresentation

Do you even know what "self-insurance" means? What a blatant lie!

There are insurance charges which escalates exponentially.



Agent technique: Half-truth

Indeed clients who have high risk tolerance can go for this high risk low return product, and the intention is very clear that the product is meant to enrich the insurer and agent who can earn an inequitable commission and go for incentive trips and enjoy fat bonuses.

No matter how you spin it, BTIR will give better protection today, tomorrow, or 20-30 years from now, or 40-50 years from now. It will also give better cash reserves from the get go. ILP is definitely good for financial freedom - the financial freedom of the agent.



Agent-technique: Misrepresentation, half-truth

BTIR also covers the insured while building a sum of money for self-insurance. ILP covers the insured at a high cost and does not do well in building the insured's ability to self-insure.

Insurance, especially your ILP, DOES NOT protect whatever life throws at you. If you do not meet the contractural definitions, you do not get a payout despite having a legit need for the money.




Agent technique: Misrepresentation and lies, half-truth

Once again, an ILP is nothing more than a term insurance pegged to investment funds with hefty upfront charges. It is as easy to BTIR as it is to sign up for an ILP. Financially astute people can definitely seek different things to "I", but the everyday folk can simply just get a term policy and subscribe to investment funds. Even better, they can tailor their financial portfolio to their risk tolerance while an ILP usually has a very limited range of funds.



Agent technique: straw man argument, half-truth

There are costs involved for a policy, but a BTiR person only receives such hefty costs on his term policy. An ILP person unnecessarily receives this cost on the whole lot of his premiums.

Also, nobody is comparing ILP to traditional whole life plans. ILP is a term plus investments bundled to shortchange the clients at no real benefit. BTIR is superior for the insured. Of course, inferior in agent remuneration.


Thank you for taking time to scrutinize my post.

If you have any queries, you may wish to obtain a product summary from your company.

Is ironic for individuals who have easy access to information to be not equip with the relevant knowledge.
 

Kheetat

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I don't know what is the numerical figure for 5 times of your clients' annual income or what it covers. But how much would the same coverage cost them every month if they bought term insurance? Or alternatively, how much coverage can they buy with $200/month if they bought term?

Probably the cheapest term insurance in Singapore is SAF insurance by Aviva that covers death, TPD and personal accidents including SAF-related accidents. A SAF regular, NSF, DXO, DSTA staff or NSman can get the maximum $600k coverage for $76.80/month; his dependants (spouse or children) can get it for $60/month. (Those premiums apply up to age 65.) They also have a CI rider at the maximum $300k coverage for $30/month more (for <46 years old, then premiums start rising pretty quickly). So $200/month could buy a young couple $1.2m life/TPD and $600k CI coverage altogether. If that is too much, they could choose to spend only half that and use the remainder for other things like their child's education.

If I guess, I believe whole life insurance costs at least 5 times, maybe 10 times the equivalent in term. Put another way, it means paying thousands of dollars more in distribution costs to the insurer.

I am not opposed to whole life insurance. I think having some coverage for one's entire life is good because term premiums get prohibitive past 50 and especially if a person develops some medical condition later on. But most of the need for insurance comes from a person's 20s to the 50s or so because that is when he has to make sure if anything happens that he and his dependants can survive. By age 50-60 the person and his spouse would be retired or nearly there, and his children would already be finishing up school or working already. Where the need for large coverage is greatest, it should be done with term; where the payout is nice to have but not crucial, like a CI above age 65, then whole life can kick in.

How can people who understand the need for insurance, want insurance and buy insurance still end up underinsured? Because the industry only sells them the expensive policies that profit themselves the most. The insured then has to cut back on the coverage and tell themselves they've done enough, when actually it may not be enough.

If people were actually told about the term option as opposed to whole life or ILPs they can make an informed decision about how much to allocate to what type. Maybe if they are not confident or not interested in finances they will freely consent to the insurance company forcing them to save and investing for them. But if people were all so informed they might realize just how much fees and charges they are paying to the insurance company and what pathetic returns they get with these policies. More would opt for term and the industry would lose out big time, so better they stay ignorant.

In particular, perhaps you can explain the benefit of ILPs as opposed to whole life policies for clients, as they seem to benefit only the insurance agents, companies and fund managers. Mix insurance and investment and you get expensive insurance and a lousy investment. It is also true for whole life, but at least there is a role for it. What is the role of ILPs?

Both ILP and whole life aims to provide coverage till age 99, with or without critical illness coverage.

The difference is how the premiums are treated. For whole life, insurers promised to give you coverage in exchange with premiums. As the premiums are higher then the actual cost of insurance fee in the early years, the extra premiums are invested by the insurer and they will declare some non-guaranteed bonuses to policy owner annually. And because of the guaranteed cash values, the policy has limited flexibility. Any changes made to the policy usually comes with some forms of penalty.

Whereas for ILP, there are no guaranteed component in it. Therefore, policy owner can do any changes he want at any given time, health underwriting will be required for any increment of sum assured. Similarly, the premiums are higher than the actual cost of insurance fees in the early years. However, the extra premiums are invested by the policy owner. He may choose to mix any allocation of equities and bonds. The cash value accumulates when there are more units and higher fund prices. He can choose to make changes, such as premium payment, sum assured, premium holiday, fund switches without administrative fees. As insurance fee only applies when there is a sum at risk, he may choose to be self-insured and take a long premium holiday.
 

HandsTied

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Thank you for taking time to scrutinize my post.

If you have any queries, you may wish to obtain a product summary from your company.

Is ironic for individuals who have easy access to information to be not equip with the relevant knowledge.

No need to thank me - it is a good thing to make sure that half-truths and lies from unscrupulous agents like you are addressed.

Is it ironic because I answered a question that you couldn't answer? You think it's ironic because you believe me to be an industry practitioner, but I have since left and am not longer tied to a captive company where I have to con and shortchange my clients like you do for a living. What's ironic is that a self-proclaimed "financial planner" like you can't even get the basics of insurance planning correct. Oh wait, that's the standard these days because any fool with O Levels and a few dumb-easy MCQ papers can call himself a "financial planner".

I like to believe in the good of people and I'll assume that you generally mean well doe your clients. For their sake, ignore sales commissions, production targets and your managers and go look through at the crap you are selling them versus the alternatives in market. Unfortunately I also think I know the answer - with the kind of commissions you are earning, I doubt you'd make a fair assessment despite all facts, logic, numbers and conscience against you and your high commission products.
 

Accesscode

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Can't help but suspect 2 forum posters here are the same one person.
Same agenda, same rebuttals.
 

HandsTied

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Summary... ILP is just using investment earnings to cover for premium, that is why they are cheaper than typical life plan (supposing investments are gaining in value). If there is a single greatest benefit I see in ILP, that would be no switching cost. But the worst feature is the increasing dependency on investment performance as you grow older

There is no real benefit to an ILP life plan at all.

If a burger costs $2 and a drink cost $2, getting an ILP plan is like getting a meal with the same burger and drink for $6. It does not make sense at all.

The so-called switching cost is available in other products, namely single premium/recurring single premium ILP that is made for investments.

One can simply buy the burger and drink separately for $2. In fact, one can even buy a burger from the fast food restaurant and drink from a bubble tea if he so desires.

This is the simple truth that financial salespeople will not admit as they pocket fat commissions by bundling the two together. They will use all kinds of red herrings, misdirections and lies to justify their product. They will tell you that the burger is very delicious and the drink is very sweet, but the truth of the matter remains - there is no real benefit from getting the meal bundled if it costs more than the separate components, which is the exact case when it comes to ILP life plans.
 

HandsTied

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Can't help but suspect 2 forum posters here are the same one person.
Same agenda, same rebuttals.

Since I saw in other threads that you are also pro-ILP, I assume that you are referring to me and some other forum poster that is against ILP.

The only agenda I have is to refute lies and half-truth. I wouldn't mind sharing this good agenda if someone else has it. Same rebuttals should be expected since the facts remain the same.

Going by your logic, you and all the other pro ILP people are also the same person. Anyway, a simple check with the moderator will suffice. To make it even simpler to track, the mod can easily see that I'm posting from overseas now.

What is your agenda? Want to make more people here in this forum your clients for ILP right? Unconscionable.
 
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Cashcow

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How you guys doing in your sales?

Insurance agents shld be quite busy meeting clients and settling claims for clients. You spend time arguing over whose views are the most ethical and most beneficial for the clients is in my opinion, pointless as every of our clients got their own stories to tell.

BTIR is good but it is also not perfect. Pls go research on your own.
ILP is not totally rubbish. There are a few gems out of the different ilp from all the companies.

The correct manner is to keep an open mind and to take in all views instead of try to argue that BTIR/ILP is the best and others are just nonsense. Pls remember, this industry has been here before you are born. It is always reforming itself to suit the market.
 

Kheetat

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No need to thank me - it is a good thing to make sure that half-truths and lies from unscrupulous agents like you are addressed.

Is it ironic because I answered a question that you couldn't answer? You think it's ironic because you believe me to be an industry practitioner, but I have since left and am not longer tied to a captive company where I have to con and shortchange my clients like you do for a living. What's ironic is that a self-proclaimed "financial planner" like you can't even get the basics of insurance planning correct. Oh wait, that's the standard these days because any fool with O Levels and a few dumb-easy MCQ papers can call himself a "financial planner".

I like to believe in the good of people and I'll assume that you generally mean well doe your clients. For their sake, ignore sales commissions, production targets and your managers and go look through at the crap you are selling them versus the alternatives in market. Unfortunately I also think I know the answer - with the kind of commissions you are earning, I doubt you'd make a fair assessment despite all facts, logic, numbers and conscience against you and your high commission products.

If you had not notice, it is ironic because we have access to the same product information and yet, being a broker which allows you to distribute many insurers, has zero knowledge about the products in the market. I may not have the so-called luxury of all companies, but I least I know my work.

By generalizing all agents to be unethical just because he is for ILP is so not intelligent.

May I suggest you to do your homework, and go for more product trainings before we continue on this ground anymore.
 

HandsTied

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If you had not notice, it is ironic because we have access to the same product information and yet, being a broker which allows you to distribute many insurers, has zero knowledge about the products in the market. I may not have the so-called luxury of all companies, but I least I know my work.

By generalizing all agents to be unethical just because he is for ILP is so not intelligent.

May I suggest you to do your homework, and go for more product trainings before we continue on this ground anymore.

Again you assume wrongly - I'm not a broker or IFA/FA either. What's ironic is that you claim you know your work but you don't even know what is self-insurance or how regular premium ILP is simply a packaged plan that offers no real benefit to the insured. Then again I doubt you're that stupid. On the other hand I think you must be very creative to come up with all kinds of excuses to justify and sell regular premium ILP.

It's not generalizing when it is fact. Regular premium ILP bundles investments and insurance together delivering poorer value and giving no real benefit. If there is a regular premium ILP plan that is as good as or better than a BTIR strategy - show it. You can't because it is indisputable that regular premium ILP cannot possibly beat a BTIR strategy be it in terms of insurance coverage, investment returns or flexibility.

Seriously, do show me an ILP product that even comes close to a BTIR strategy. I will be the first to buy it, and even recommend all my friends and family to take it up. You may even reach MDRT through my referrals and I alone. :s13:

Now yet another ironic point - you asking me to do my homework when you can't substantiate your arguments. I'm sure you go for plenty of product trainings that teach you to sell, sell, sell and that the products is damn super - damn good for clients and still pay you and your manager fat and obscene commissions. You're either naive or just plain lying to yourself. Amazing how people can even try to dispute logic.
 
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skai_11

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hi,

is there any website or any way i can check exactly how many and what insurance/invesment plans i had signed up for?

thanks
 

lzydata

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Whereas for ILP, there are no guaranteed component in it. Therefore, policy owner can do any changes he want at any given time, health underwriting will be required for any increment of sum assured. Similarly, the premiums are higher than the actual cost of insurance fees in the early years. However, the extra premiums are invested by the policy owner. He may choose to mix any allocation of equities and bonds. The cash value accumulates when there are more units and higher fund prices. He can choose to make changes, such as premium payment, sum assured, premium holiday, fund switches without administrative fees. As insurance fee only applies when there is a sum at risk, he may choose to be self-insured and take a long premium holiday.

From your sales pitch it seems like the main selling point of ILP is the Burger King slogan, Have It Your Way. Pay as much or as little premiums as you like, and be your own fund manager! Invest with whatever allocation and in whatever funds you choose, and whenever you change your mind you can switch for free.

It all sounds wonderful. You are flattering people and selling them hope. But ILPs will be disastrous for most of them.

Let's face it, most people are no good at investing. Instead of reading books and doing one's homework, they act on superstition, sales pitches, tips or whims of fancy. Nobody reads the prospectus. They chase performance, so they end up selling a stock/fund just when it is about to outperform so they can buy another stock/fund just when it is about to underperform. Most have no idea what performance they should expect and how much they are paying in fees and charges. They look at a 9% p.a. return projection in their policy and think that is easy to achieve, no sweat. They do not see how it will take years just to reach the total amount of premiums they pay out, because they either don't read the policy documents or don't understand them, and certainly the agent is not about to tell the client just how much commission he and his company is making out of the deal.

Maybe you are careful and honest enough to sell ILPs only to people who are knowledgeable about insurance and investing, as opposed to people who cannot tell the difference between a stock and a bond. Good for you! But even with the best investors, the game is rigged against them. The game is rigged because with the high distribution cost of the ILP, the 3% initial sales charges for all the funds and the >1% annual management fees, it's quite unlikely that any ILP investor will do well unless in roaring bull markets. Funds as a whole are the market, so the average return for a fund is the market return minus fees - with their fees so high, the result is poor performance. In such a context, free switching is a sad joke and an excuse for more trading and more disappointment.

So it is almost guaranteed that people will get poor investment returns through them. As if that is not bad enough, the worse thing is that under an ILP a person's investment performance and the state of the markets at the time directly affects how much insurance he gets. What is the point of insurance? 100 people pay premiums and pool their money so that when the 1 random unlucky guy dies or contracts a serious illness, he and his family are not destitute. But with ILPs, if that unlucky guy did well as an investor and the markets were kind to him, he gets more. What about the triply unlucky guy - lousy in investing, unlucky in health, and has to claim at the bottom of the market? He gets less, maybe only the pathetic basic benefit. What is it, 10 times the annual premium? ($200/mth -> $24,000 payout). Completely inadequate for his needs, and a small fraction of what he would have gotten with a term or even whole life plan.

I believe if ILPs are explained to people like this they will see the point: this is not insurance, or at least, this is not how I want my insurance to work.
 

jack81

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So it is almost guaranteed that people will get poor investment returns through them. As if that is not bad enough, the worse thing is that under an ILP a person's investment performance and the state of the markets at the time directly affects how much insurance he gets. What is the point of insurance? 100 people pay premiums and pool their money so that when the 1 random unlucky guy dies or contracts a serious illness, he and his family are not destitute. But with ILPs, if that unlucky guy did well as an investor and the markets were kind to him, he gets more. What about the triply unlucky guy - lousy in investing, unlucky in health, and has to claim at the bottom of the market? He gets less, maybe only the pathetic basic benefit. What is it, 10 times the annual premium? ($200/mth -> $24,000 payout). Completely inadequate for his needs, and a small fraction of what he would have gotten with a term or even whole life plan.

I believe if ILPs are explained to people like this they will see the point: this is not insurance, or at least, this is not how I want my insurance to work.

I only wish to clarify on the comment in bold. One can get reasonable coverage from an ILP.

Male age 30, can get a triple indemnity of 200K death, 200K CI and 200K TPD with a monthly premium of $200.

Please do not go on to compare to a term plan and the monthly premium. I'm simply saying the payout of ILP is not as low as 10 times the annual premium.
 
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