Advice on ILP

wts2013

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You asked for research and there are many backtest and research for index ETF investing but I know I can't change your mind since you already made it up long ago...
BTIR does have some hype but most of it have substance.

hahaha, moi can share with chiu, when one is at the start of a career, there is only time spent on the career with objective to work hard to earn big salary, no time for other things, once the person can earn high salary, there is no need to invest to make money, that was fundamental for moi, hahaha
 

limster

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See: http://www.investmentmoats.com/budg...ving-plans-endowment-give-you-3-to-5-returns/

Mine is NTUC Living Policy, about 4% return. There is one called NTUC Anticipation, that's probably the 5% he is referring to. Now, cannot get already, so why living in the past.

If you want to live in the past, can talk about buying landed property in the 1980s for $100,000 and selling 20 years later for $1m. 1000% return.
 

wts2013

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See: http://www.investmentmoats.com/budg...ving-plans-endowment-give-you-3-to-5-returns/

Mine is NTUC Living Policy, about 4% return. There is one called NTUC Anticipation, that's probably the 5% he is referring to. Now, cannot get already, so why living in the past.

If you want to live in the past, can talk about buying landed property in the 1980s for $100,000 and selling 20 years later for $1m. 1000% return.

hahaha, buay tahan ah, mai kay kiang lah, wonder who is still living in the past leh, ntuc no longer offer Living Policy leh, the policy moi talking about is still available leh, hahaha, mai ka li kong leh, kay kiang hor, hahaha, ai koon liao, hahaha

btw ntuc still got advertise in the papers how much returns their policies gives, that was the rate they advertise leh, bo kua tio ah, hahaha
 

limster

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hahaha, buay tahan ah, mai kay kiang lah, wonder who is still living in the past leh, ntuc no longer offer Living Policy leh, the policy moi talking about is still available leh, hahaha, mai ka li kong leh, kay kiang hor, hahaha, ai koon liao, hahaha

btw ntuc still got advertise in the papers how much returns their policies gives, that was the rate they advertise leh, bo kua tio ah, hahaha

Since you still haven't named the policy and shown the link to the actual returns despite so many posts, I assume you are trolling rather than wanting to help people choose a good deal.
 

ctzehock

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Hello all,

Thank you all so much for your inputs! Kamsahamnida! I will probably be switching to another policy. Anybody has any recommendations or suggestions? Should I go ahead with the life policy (AIA guaranteed protect plus)?

@wts2013: do you mind sharing with me roughly what wholelife policies are like? If I'm not wrong, the AIA policy I mentioned is a term policy?

@ntucagent: in this case, would the guaranteed protect plus plan be suitable? From what I know, that policy requires me to pay for 12/20 years, and I will be covered until 100. Have not gotten any info from my agent yet.

@ochazuke: I actually have no investment knowledge, and also don't have the funds to invest. So I will probably not be doing any investments in the short term.

@perisher: may I ask, what are BTIRs?

@BunnyE,
Looks like you won't be getting much answer in the middle of their fight so hope that I can help you out here. You are really new to this, so I shall do my best to explain more details.

Whole Life insurance pays a benefit on the death of the insured and also accumulates a cash value. Although it is call whole life, depending on the insurer, it may cover only up to 99 or 100 years old.

Term Life insurance only pays a benefit on the death of the insured. Usually, the cover is up to 65 to 85 years old.

AIA guaranteed protect plus is a whole-life policy. The term life for AIA is the AIA Secure Term Plus (II).

Obviously, the whole life insurance premium is going to be more ex than the term life insurance premium.
For example: Whole life - $300/month, term life - $50/month for the same coverage
So the argument will be on which is better ?

wts2013 thinks whole life is better because of the additional cash value.

perisher and ochazuke think Buy term and invest (BTIR) the rest is better. This means that instead of spending $300/month on whole life. You spend $50/month on the term life and invest the $250 on your own.

Statistically speaking, BTIR will be better as insurer usually charges high fee when they invest on your behalf.
If you don't know how to invest, you may want to consider the POSB Invest-Saver. I won't consider the fee cheap, but it's a good place for beginner to start.
 

Perisher

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hahaha, buay tahan ah, mai kay kiang lah, wonder who is still living in the past leh, ntuc no longer offer Living Policy leh, the policy moi talking about is still available leh, hahaha, mai ka li kong leh, kay kiang hor, hahaha, ai koon liao, hahaha

btw ntuc still got advertise in the papers how much returns their policies gives, that was the rate they advertise leh, bo kua tio ah, hahaha

Ain't helping anyone by doing that. Mind putting the petty differences aside and tell people what that policy is?

Try not to advise half-heartedly, either help or don't, otherwise you might just get people confuse and they might end up getting the wrong thing.
If you don't wish to reveal what policy can do what, then don't make a statement that wholelife is good, most of it isn't so you have to be specific.

On another note here are many plans comparison, it does seems NTUC has some of the best policy but unfortunately some is no longer available.
http://www.investmentmoats.com/budg...ving-plans-endowment-give-you-3-to-5-returns/
 

Perisher

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酒干倘卖无.;96648118 said:
Morning perisher..thats early..i'm still following up

Morning. You are pretty early too.:)
 

Perisher

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"@ntucagent: in this case, would the guaranteed protect plus plan be suitable? From what I know, that policy requires me to pay for 12/20 years, and I will be covered until 100. Have not gotten any info from my agent yet. "

Suitable or not will depend on your overall objective and unless we sit down together to do a thorough review, there's no way to know if this plan is suitable.

On a personal level, there are many plans for me to use for planning. But this AIA ILP is definitely not one of them.

In case anyone think I am having sour grapes, I can sell AIA plans as well.

In any case, Would highly recommend against any ILP.
 

reinphd

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TS,

Do not mix insurance with investment. Simply being the first half a decade you'll be paying fees to your agent at an alarming rate and the yearly fund management fee which is exorbitant if you compound it over the decades. And not forgetting the monthly policy fee you have to pay if you do not already know. $5 if am not mistaken because I had the same plan. Get a term plan to say 65 or 75 years old because the basis of having insurance is to cover your loved ones when you pass on. When you're 65 or 75 and if you have done simple investing in the long run (buying etf), your assets will make the death benefit seems like a peanut change.

I quote from a calculation i did some time back:

Hi TS,

I did a calculation with these figures for my ILP (and i just cancelled it after 3 years with a '$3.8k' loss but heck it's worth it.

mine was family protect first (a play of name i guess) and $2k/year

Starting from now, paying a premium of $400-$500/year for a term premium coverage of $100k for death, major CI and TPD till age 75, that leaves me with ($2k-$500=$1.5k) for investment per year.

Supposedly the AIA funds can generate 7% CONSISTENTLY till 65 (which is a generous figure I am freaking giving it), and my own portfolio can generate 7% as well (easily achieveable with index investing, gains and dividends), we will see the break down as such

FOR ILP (I factored in that the 4th - 6th year it will be 100% and 7th to 10th year it will be 102% and 11th year onwards will be 105%):
At age 65, I would have the results:
Insurance premium paid: $32,339 (factoring in the rate of CI,TPD and death multiply by per $1k coverage. I was covered for $100,000 for all)
Investment: $176,503 (every year subtract fund management fee of 1.5%, minus policy fee of $5/month and minus amount deducted for insurance and a 7% growth yearly. I have yet to take into consideration if any other fees are involved)

For quitting now and getting a term to cover the same and doing self investment and at age 65, I would have the results ($500/year for term, $1.5k self-invest in etf with 7% return):
Insurance premium paid: $18,500
Investment: $240,506 (factoring in the charges i use for SCB)


It is a no brainer which is the winner right? hope people who want to buy ilp can see this. Of course if you are damn lazy to not want to do anything other than leaving everything to GIRO, then by all means go ahead with ILP

If you want to control a bit by spending a few minutes once a year to rebalance portfolio, you'll see yourself $70k richer with just the two different approaches

Cheers
 

Perisher

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One man's meat is another man's poison. While we respect your POV, it is important that we keep an open mind and accept diversity from all angles in order not to be limited by our respective blind spots.

Erm, ok, let's say someone sell a very bad tasting food and just so happen there is that rare one person who actually like it, I would still strongly recommend against that bad tasting food. Get the idea?

Open mind yes but am still calling a spade a spade.
 

limster

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One man's meat is another man's poison. While we respect your POV, it is important that we keep an open mind and accept diversity from all angles in order not to be limited by our respective blind spots.


In the end, it depends on the returns that the policy is giving. If the policy can achieve 3-5% CAGR with early breakeven point, I will give it my support. I am holding NTUC Living Policy (breakeven year 7-8) and satisfied with the return so I don't plan to surrender it.

But when I see those policies 20 years+ cannot breakeven at 4% growth to participating fund, and most of them in the end only 2-3% CAGR, I don't see what's there to recommend....
 

bunnyE

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@BunnyE,
Looks like you won't be getting much answer in the middle of their fight so hope that I can help you out here. You are really new to this, so I shall do my best to explain more details.

Whole Life insurance pays a benefit on the death of the insured and also accumulates a cash value. Although it is call whole life, depending on the insurer, it may cover only up to 99 or 100 years old.

Term Life insurance only pays a benefit on the death of the insured. Usually, the cover is up to 65 to 85 years old.

AIA guaranteed protect plus is a whole-life policy. The term life for AIA is the AIA Secure Term Plus (II).

Obviously, the whole life insurance premium is going to be more ex than the term life insurance premium.
For example: Whole life - $300/month, term life - $50/month for the same coverage
So the argument will be on which is better ?

wts2013 thinks whole life is better because of the additional cash value.

perisher and ochazuke think Buy term and invest (BTIR) the rest is better. This means that instead of spending $300/month on whole life. You spend $50/month on the term life and invest the $250 on your own.

Statistically speaking, BTIR will be better as insurer usually charges high fee when they invest on your behalf.
If you don't know how to invest, you may want to consider the POSB Invest-Saver. I won't consider the fee cheap, but it's a good place for beginner to start.

Hi @ctzehock, thank you so much for the detailed explanation! :) I now have a clearer idea on both policies and will try to work something out with my agent tomorrow.

Am I right to then say that a term life policy would have no cash value? For example, if i were to surrender the policy before the cover ends, I would not get anything out of the policy? Whereas under the whole life policy I would be able to get something out of the policy?

I would think that my dad's concern now is with regards to being able to surrender the policy (in case of emergency) and being able to get back some cash. In this case, it would seem that the whole life insurance would be a better choice?

Regarding the POSB Invest Saver you have mentioned, I am aware of it but currently have no funds for it as I am still a full time student :s13:


"@ntucagent: in this case, would the guaranteed protect plus plan be suitable? From what I know, that policy requires me to pay for 12/20 years, and I will be covered until 100. Have not gotten any info from my agent yet. "

Suitable or not will depend on your overall objective and unless we sit down together to do a thorough review, there's no way to know if this plan is suitable.

On a personal level, there are many plans for me to use for planning. But this AIA ILP is definitely not one of them.

In case anyone think I am having sour grapes, I can sell AIA plans as well.

Hi @ntucagent, thank you for your input! Will definitely not be sticking to the AIA ILP!

TS,

Do not mix insurance with investment. Simply being the first half a decade you'll be paying fees to your agent at an alarming rate and the yearly fund management fee which is exorbitant if you compound it over the decades. And not forgetting the monthly policy fee you have to pay if you do not already know. $5 if am not mistaken because I had the same plan. Get a term plan to say 65 or 75 years old because the basis of having insurance is to cover your loved ones when you pass on. When you're 65 or 75 and if you have done simple investing in the long run (buying etf), your assets will make the death benefit seems like a peanut change.

I quote from a calculation i did some time back:

Hi @reinphd, I am unaware of the monthly policy fee and any other fees involved in the policy as the agent did not mention them to me. Only got to know of these fees after reading other threads in hwz!

As I have not much investment knowledge at this point in time (and also no $$ as well :s13:), would you still recommend that I get a term plan?
 

ctzehock

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Hi @ctzehock, thank you so much for the detailed explanation! :) I now have a clearer idea on both policies and will try to work something out with my agent tomorrow.

Am I right to then say that a term life policy would have no cash value? For example, if i were to surrender the policy before the cover ends, I would not get anything out of the policy? Whereas under the whole life policy I would be able to get something out of the policy?

I would think that my dad's concern now is with regards to being able to surrender the policy (in case of emergency) and being able to get back some cash. In this case, it would seem that the whole life insurance would be a better choice?

Regarding the POSB Invest Saver you have mentioned, I am aware of it but currently have no funds for it as I am still a full time student :s13:

Yup, for a term plan, you would not get anything out of the policy. For the whole-life plan, you are not going to get much either in the earlier years. The purpose of the cash value are not for emergency but for retirement. You will be surprised that you may not get any cash if you surrender too early.

If your intention is to get a whole-life plan, you might want to consider talking to your Dad about BTIR. The total amount spent (by your dad) would be the same.

It's more troublesome but will suit his objective more. As for the investment vehicle, he may want to pick something more liquid since it is for emergency.
 

reinphd

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Hi TS,

Your agent ought to be frank with you for all the fees involved. Out of all the agents I've met, only one told me EVERYTHING and that's my cousin. Now you know there are many fees involve, you can make a better judgment. Getting a term plan and invest the difference if you were to get an ILP is a very sound plan. Do read up on shiny things' thread. Insanely long but a thread rich in financial knowledge and wisdom. Good luck

Sent from Samsung SM-G900F using GAGT
 
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