Want to cancel my ILP...

new-comer

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I wrote this thread upon viewing another thread on ILP:
http://forums.hardwarezone.com.sg/money-mind-210/advice-ilp-5175355.html

I am in my early 20s and I am paying over 2000 per year for my ILP and I am considering cancelling it.

To date, I am around 1 year into my ILP and I don't feel like continuing it. It is causing a toll on my finances. And what's more, the so-called "investments" looks weird to me.

I receive a statement on the investment transactions and I see that it is 1 day buy same day sell. Not a single cent gained. I understand that for ILP, unlikely you will make gains but then such transactions, is it actually valid? Kindly correct me if this is actually the "correct standard procedure".

And I have no idea how come my death benefit actually decreased because I am told that whatever gain or losses in the investment will not affect the guaranteed death benefit.

I am totally puzzled.

I also have this savings plan which I am paying over 1700 per year for the next 25 years. I also feel like cancelling this but then considering the fact that I will be able to get back an amount slightly higher than the total premiums I will pay for 25 years, I am not sure if I should cancel or not. If I cancel now, I can roughly get back 1000 iirc.

If I continue these 2 plans, I will be paying ard 4000 per year.

All in all, I feel kind of "misled" into buying these 2 insurance plans. Worse still, these 2 are introduced by my relative via my mother (her cousin). Knowing my mother's attitude, I get more hesitated to cancel either the ILP or cancel both plans.

Help!
 
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valkyrie_xx02

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From what i know ILP usually has zero surrender value for the first year. If you don't think you can commit long term on this plan it maybe better for your to cut losses and terminate it.

I myself am 4 years into my plan and i lose 4-5k if i surrender the policy now. The longer u hold the more painful it gets.
 

new-comer

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From what i know ILP usually has zero surrender value for the first year. If you don't think you can commit long term on this plan it maybe better for your to cut losses and terminate it.

I myself am 4 years into my plan and i lose 4-5k if i surrender the policy now. The longer u hold the more painful it gets.

Yes, I feel like cutting my losses now. The way I see the portfolio is managed, I don't have any trust in it. Like I mentioned, the statements show 1 day buy same day sell for most of the transactions, how is it possible to earn other than bleeding away money for transaction fees? Kindly correct me if I am wrong on this issue.

Also, my guaranteed death benefit actually decreased which I am like, wtf? Any logical reasons for this, because as far as I know, the guaranteed death benefit should not change in value.

Ultimately I am only afraid my mother will make a lot of noise only.
 

oceanicmanta

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My first insurance was signed around your age.
If I had known then what I know now, I would have focused on Term Life, Critical Illness, & Hospitalisation coverage. Keep insurance policy as simple as possible, focused on protection.
IMO, looking at insurance policies as a savings alternative is a very very long term commitment. I would say at least 20 years before you see some returns, & that's not guaranteed.
Given the easy access to investment platforms nowadays, you will have better control over your finances 20 - 30 years down the road.
 

wts2013

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wah, kana con by relative, cancel the ilp one not worth your money, if the market continues to drop, u will lose even more, if u want insurance cover just buy insurance without the investment portion (ILP)

the second one is a savings plan which is ok if u can afford, but 1700 for your age is very high leh,

assess what u need - death, ci, hospitalisattion, etc, just buy those cover, buy from ntuc value for money leh, hahaha

my relative bought ntuc wholelife policy to cover death for 50k sum asssured only pay 888 per year leh, after 30 years getting return of about 5% pa, so buy the right insurance lor
 
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new-comer

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@oceanicmanta,

Thanks for your response. Actually, ever since I came to Money Mind + Stock section to learn more, I begin to learn more and look deeper into financial matters. And since then, I started to ponder a lot on my this ILP and savings plan as I am getting more convinced I am throwing my money away.

wah, kana con by relative, cancel the ilp one not worth your money, if the market continues to drop, u will lose even more, if u want insurance cover just buy insurance without the investment portion (ILP)

the second one is a savings plan which is ok if u can afford, but 1700 for your age is very high leh,

assess what u need - death, ci, hospitalisattion, etc, just buy those cover, buy from ntuc value for money leh, hahaha

my relative bought ntuc wholelife policy to cover death for 50k sum asssured only pay 888 per year leh, after 30 years getting return of about 5% pa, so buy the right insurance lor

The savings plan is fine actually, I can keep it though. But if want to cancel also can, I don't really mind, but the thought of being able to get back slightly higher than the total premiums I will pay for 25 years is kind of stopping me to do so. Kind of contradicting, yeah?

For my ILP, "con" might be a word too strong I guess? But then I do feel "misled" anyway. I mean, how is it possible for guaranteed death benefit to decrease in value? And also my transactions are mainly 1 day buy same day sell? I just don't get it.

I have a cheap cheap NTUC insurance actually. No intention of cancelling it. Bought it like more than 5 years ago.
 
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peterchan75

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Sharing my ILP experience. I cash out both recently. I will not mention name of the insurance company.
1. One lump sum payment. Gain about 5% per year for the past 10 years.
2. From another company, yearly premium ILP with crit illness. I lost $8K from investment for the past 12 years. To make it worse, the premium for my crit illness increases every year and it eating up my cash value. Agent told me, the $8k is just a cost of protection. I replace this policy with crit illness non-ILP policy and I paid for fixed number of year and life long protection.

Not all ILP are bad. Just avoid those that hit you with transaction cost. Also, agent plays a part too. Proactive agent that have customers in mind is also important. Like mine.. Mr.... maybe it's time to get out as the market is peaking.
 

wts2013

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Sharing my ILP experience. I cash out both recently. I will not mention name of the insurance company.
1. One lump sum payment. Gain about 5% per year for the past 10 years.
2. From another company, yearly premium ILP with crit illness. I lost $8K from investment for the past 12 years. To make it worse, the premium for my crit illness increases every year and it eating up my cash value. Agent told me, the $8k is just a cost of protection. I replace this policy with crit illness non-ILP policy and I paid for fixed number of year and life long protection.

Not all ILP are bad. Just avoid those that hit you with transaction cost. Also, agent plays a part too. Proactive agent that have customers in mind is also important. Like mine.. Mr.... maybe it's time to get out as the market is peaking.

hahaha, u are right, single premiums are more "investment" type which will likely give u a return as the cost is lower,

regular premiums type (mthly or yrly) is the one where u will lose cos everytime u pay there is a sales charge which will eat your money, at least 5%, so u need to make more than 5% to recover this cost, how to with a down market, so never buy such ILP insurance lor, hahaha

so understand what u are buying lor, hahaha
 
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af7680

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wah, kana con by relative, cancel the ilp one not worth your money, if the market continues to drop, u will lose even more, if u want insurance cover just buy insurance without the investment portion (ILP)

the second one is a savings plan which is ok if u can afford, but 1700 for your age is very high leh,

assess what u need - death, ci, hospitalisattion, etc, just buy those cover, buy from ntuc value for money leh, hahaha

my relative bought ntuc wholelife policy to cover death for 50k sum asssured only pay 888 per year leh, after 30 years getting return of about 5% pa, so buy the right insurance lor

Hi wts2013
I have 3 ILPs - 2 monthly premium paying ones and 1 lump sum payment one. i bought them when i started working also and now its has been more than 10 yrs but still 4-5k loss for monthly paid ones and 3k loss for the other one if I surrender now. really regret on ILP purchases ...
wanna ask for advice if there is any good CI insurance.. when I asked the agent, they all said I need to purchase life insurance and then CI will be rider. so if that is true, in order to have good coverage for CI, I need to buy expensive life insurance again ( I already have 2 Life insurance but CI coverage is little).. If you could share with me, I will really appreciate.
 

wts2013

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Hi wts2013
I have 3 ILPs - 2 monthly premium paying ones and 1 lump sum payment one. i bought them when i started working also and now its has been more than 10 yrs but still 4-5k loss for monthly paid ones and 3k loss for the other one if I surrender now. really regret on ILP purchases ...
wanna ask for advice if there is any good CI insurance.. when I asked the agent, they all said I need to purchase life insurance and then CI will be rider. so if that is true, in order to have good coverage for CI, I need to buy expensive life insurance again ( I already have 2 Life insurance but CI coverage is little).. If you could share with me, I will really appreciate.

oops, moi no expert leh, moi got ntuc living policy which covers ci only, no longer offered by ntuc, just did internet search, now ntuc offer vivocare which only cover ci, u can call them to find out more lor
 

new-comer

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Hi all, thanks for many response. Hopefully can get more along the way.

But for now, what is actually "the most ideal" solution?
1) Maintain both ILP and savings --> Payment per year of over $4k
2) Cancel ILP, keep the savings --> Will free up over $2k every year
3) Cancel ILP, cancel the savings --> Will free up over $4k every year + Get back around $1k surrender value for savings

Also have to ensure my mother don't make a lot of noises. As per mentioned, these 2 plans were introduced by my relative via my mother (her cousin).
 

limster

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my relative bought ntuc wholelife policy to cover death for 50k sum asssured only pay 888 per year leh, after 30 years getting return of about 5% pa, so buy the right insurance lor

This must be the NTUC Living Policy that is discussed in other threads. Breakeven after 7-8 years, and pretty good return. I think mine is 4%+, probably depends on entry date.

But nowadays cannot find policies that breakeven after 7-8 years. If got, pls share....
 

naro

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Sharing my ILP experience. I cash out both recently. I will not mention name of the insurance company.
1. One lump sum payment. Gain about 5% per year for the past 10 years.
2. From another company, yearly premium ILP with crit illness. I lost $8K from investment for the past 12 years. To make it worse, the premium for my crit illness increases every year and it eating up my cash value. Agent told me, the $8k is just a cost of protection. I replace this policy with crit illness non-ILP policy and I paid for fixed number of year and life long protection.

Not all ILP are bad. Just avoid those that hit you with transaction cost. Also, agent plays a part too. Proactive agent that have customers in mind is also important. Like mine.. Mr.... maybe it's time to get out as the market is peaking.
Agree with you. I had 1 single premium and 2 regular premium ILPs.

Surrendered the single premium ILP and made profit.

Partial surrender the 2 regular premium ILPs and left with a small number of units to make sure I still have the insurance coverage. Made a decent profit for both for the partial surrender and awaiting to deploy the cash. As I only did a partial surrender, my insurance coverage is still intact and I will continue to make the monthly premium payments.
 

NiteX2

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Pretty sick of hearing so many stories of people buying ILPs, be it through close friends or relatives. I have yet to sell a single ILP in my 3+ years in the industry.

To TS, option 2 will be the better one to go with in my opinion. Just take the savings plan as forced savings on your part. It's only barely $150/mth. If it's anticipated endowment, even better for you, since you will be able to cash out part of the savings when you have needs for it down the road, eg marriage, house reno etc.

As for your question why there's same day buy and same day sell, it's because part of the amount that you pay goes into investments which explains the buy in part. For the sell part, it's to cover for things like policy fees and insurance charges (note: insurance charges increase with age). Depending on your policy, there may be a spread between the buy in and sell out price.

For your death benefit question, there's usually 2 components. First one is the guaranteed death benefit which is what you are covered for when you took up the plan. This amount will not change. The other amount is simply the value of your investments which will fluctuate based on market conditions.

To all, stop harping on old plans which give good returns of 4% and up, these plans are gone and probably will not be back unless interest rates in US goes back to the same levels in the past. Savings account in banks used to give good interest returns in the past as well. Go with the times :s13:
 

naro

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Hi wts2013
I have 3 ILPs - 2 monthly premium paying ones and 1 lump sum payment one. i bought them when i started working also and now its has been more than 10 yrs but still 4-5k loss for monthly paid ones and 3k loss for the other one if I surrender now. really regret on ILP purchases ...
wanna ask for advice if there is any good CI insurance.. when I asked the agent, they all said I need to purchase life insurance and then CI will be rider. so if that is true, in order to have good coverage for CI, I need to buy expensive life insurance again ( I already have 2 Life insurance but CI coverage is little).. If you could share with me, I will really appreciate.
Buy a term and get a CI rider.
 

NiteX2

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Hi wts2013
I have 3 ILPs - 2 monthly premium paying ones and 1 lump sum payment one. i bought them when i started working also and now its has been more than 10 yrs but still 4-5k loss for monthly paid ones and 3k loss for the other one if I surrender now. really regret on ILP purchases ...
wanna ask for advice if there is any good CI insurance.. when I asked the agent, they all said I need to purchase life insurance and then CI will be rider. so if that is true, in order to have good coverage for CI, I need to buy expensive life insurance again ( I already have 2 Life insurance but CI coverage is little).. If you could share with me, I will really appreciate.

There are standalone CI plans available in the market. You have to ask yourself if that's what you prefer though, since one would not be able to claim anything from the plan if a person pass away without suffering from any CIs. Cost wise, it may or may not be cheaper, depending on your profile and the coverage term.

To wts2013, vivocare covers death/tpd/early CI. If you are talking about late stage CI, Vivolife should be the correct plan with death and tpd coverage as well.
 

wts2013

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moi have shared in other threads, now share again lor.

Insurance is piah chiak one, moi never buy insurance which moi cannot get money back if moi still alive.

If moi still alive and well, get money back is an option for retirement. Moi have death insurance which will mature 60 plus so can get money back if no dependents, then use for retirement. Got multiple CI policies bought more as income increases, can terminate and get money back if healthy when old, use for retirement, maybe keep one just in case. Got ntuc income enhanced shield with rider for 100% cover, so no need worry no money to pay.

All with ntuc income, all policies with sum assured which auto increases over the years, so no need to buy more, eg 50k when bought can increase to 100k many years later.

Dun look at the returns these insurance can give u, cos primary purpose is insurance, if when u retire and want to cash out and found it pays average of 4-5% interest, its a bonus lor, hahaha

If u buy term, all your money down the drain if u still alive hor, hahaha
 

Perisher

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If u buy term, all your money down the drain if u still alive hor, hahaha

That's because you didn't invest the rest. Don't mislead with a sweeping statement. Buying term is always paired with invest the rest.
 

wts2013

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That's because you didn't invest the rest. Don't mislead with a sweeping statement. Buying term is always paired with invest the rest.

hahaha, it is no better than ILP, 100% paid is lost, dun try to console chiu, hahah
 

Shiny Things

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That's because you didn't invest the rest. Don't mislead with a sweeping statement. Buying term is always paired with invest the rest.

Yep, this is right. If you buy term instead of whole-life, you pay 90%-95% less for the same amount of coverage. That's money that you can invest in stocks and bonds, and it's money that you'll get back when you retire (or earlier, if you need it).

The big trick of whole-life insurance is that they do exactly the same thing, they just don't tell you about it. They take your money, invest it (mostly in bonds, not in stocks, so you get less growth), and then give it back to you when you retire or when you claim on the policy, minus a truckload of fees.

Whole-life insurance is worse than just investing it yourself, but they can't tell you that. There's a whole sales industry dedicated to persuading you that you're dumb, that you can't be trusted with your own money, that you're going to get hit by a bus on the way to work tomorrow morning and that you're a terrible person who won't leave any money for your children. It's all a sales trick, designed to sell you a higher-margin product (whole life and ILPs) instead of a better, cheaper product (term life).

----------

I know I've said this before, but whole-life insurance (and investment-linked insurance) was invented as a tax dodge. People in the UK (I think) realised that if you left money to your kids in the form of an "insurance payment", instead of as an inheritance, it wouldn't get slugged by death duties. Singapore has no death duties - all it has is the couple-thousand-dollar costs of executing the will.

And with no death duties, what's the point of whole-life insurance?

Exactly.
 
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