Want to cancel my ILP...

wts2013

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hahaha, if chiu think chiu are getting value for money by paying less with term, and u lose less money (term insurance premiums) to the insurer, and can make that money back by investing it yourself, good for u.

if chiu dun like the idea of insurer losing your money from chiu when u buy ILP, and wld lose more than compared to term insurance, hahaha then chiu feel happier losing it yourself thru term and hope to make it back from investing yourself, good for u

moi only want my money back, no want cheap n lose 100% (term insurance) since insurance is pian chiak one leh, if moi got money still can invest and earn even more money leh. Insurer give me back my money, they work hard for me with guaranteed return, chiu have to work hard to earn from chiu investment leh, hahaha

to each his own, some more u no buy insurance one right cos u dun believe in insurance in the first place, only got hospitalisation insurance hor, then hahaha

no ILP ok, hahaha
 
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limster

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

The part of my insurance payment that goes towards the agent's BMW and the insurer's profits is also money that is unnecessarily paid and lost.

I have no problem with paying money to make money, like the IBKR $10 monthly activity fee. But the problem is that the ILPs charges are unnecessary.

I think you're probably trolling the ILP haters and not really giving a balanced view or the pros and cons of ILP.
 

fitlies

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Now I even feel like cancelling away my savings plan as well :(

Sharing my journey here - I had an ILP previously, but terminated a few months into the plan after I got some form of enlightenment by doing up my homework; timely in some sense but perhaps I do wish I didn't enter ILP at all.

So I had WL, Endowment and PA plans which I thought was "the right thing to do". But once again, as my curiosity arose and financial literacy increase, I cancelled my WL and went to buy term instead.

Disclaimer: there's no one size fits all decision. You have to weigh your own pros and cons, and then move forward with a decision that is able to convince you and proclaim the justification without any hesitation, if you were to ask your future self why you decided to stick to/cancel any of your existing plans.

My reason? My new term plan gives 10x more on death and TPD coverage, and 3x more for CI, as compared to my WL, at a monthly premium that's 15% lower (that's my justification for cancelling WL and taking up term). So the decision was pretty straight forward. I have already calculated and ascertained prior that I am comfortable with that final amount of coverage, given my circumstances, but of course I was also made known that I am able to have a lower coverage that comes with lower premiums as well.

As for my Endowment, I decided to keep it running despite having second thoughts that I felt that I was "wasting my money". Upon maturity, I am able to cash out this amount which will assist me in my finances at that future stage of my life. It also concurrently act as a form of forced savings from my disposable income (my justification). So I am good with that.

Granted I could have used these monthly premiums to invest in X instrument, that can yield a 4% p.a. return, but given my lack of knowledge in that field, I felt it was only wise to stick to this form of forced savings; pretty much like a scaled-down version of CPF and upscaled version of FD/SSB. Sorry I digress.
 

new-comer

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Later I will upload the figures for my ILP and my savings plan, maybe that will be easier for comprehension purposes.
 

new-comer

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What do you guys think?

Savings
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ILP
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makav31i

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I did my calculation for BTIR and Whole Life Insurance.

My calculation is based on the assumption that a person got $150/month to spend, the returns on investment is 5% yearly.

If the person buy term insurance at $50 a month and invest $100, he would take at least 15 years to outperform buying Whole Life insurance at $150/month...That have not taken into account if the surrender value of the whole life insurance have appreciated... If it did, it would take a few more years before BTIR can match the returns....

I am not denying that if you BTIR for at least 17 years, you would have outperform buying Whole Life insurance... Maybe something to consider, maybe you all can do your own calculations...
 
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coolgalos

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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's CI term policy as well.... It does not necessarily have to be attached as a rider to Life insurance!
 

Shiny Things

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I did my calculation for BTIR and Whole Life Insurance.

My calculation is based on the assumption that a person got $150/month to spend, the returns on investment is 5% yearly.

If the person buy term insurance at $50 a month and invest $100, he would take at least 15 years to outperform buying Whole Life insurance at $150/month...That have not taken into account if the surrender value of the whole life insurance have appreciated... If it did, it would take a few more years before BTIR can match the returns....

I am not denying that if you BTIR for at least 17 years, you would have outperform buying Whole Life insurance... Maybe something to consider, maybe you all can do your own calculations...

Yeah, but you've missed a big thing there: the term life for $50 a month is going to have a hell of a lot more coverage than the whole-life for $150 a month - probably about 3x more coverage. The equivalent term-life cover for a $150/mo whole-life policy is going to be about $15 a month.

And I'd love to see your work. I can't get those numbers to tie out. I figure if you BTIR you're going to be ahead pretty much immediately, because the first couple years of whole-life premiums will get chewed up in fees.
 
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new-comer

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20 years cannot breakeven despite 4% annual return, i will avoid.

Judging by this, there is actually a chance I might not even break even after 20 years :eek:

Indeed learned a lot after doing some research and reading informative posts in this forum.

Kudo to all!
 

Perisher

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I did my calculation for BTIR and Whole Life Insurance.

My calculation is based on the assumption that a person got $150/month to spend, the returns on investment is 5% yearly.

If the person buy term insurance at $50 a month and invest $100, he would take at least 15 years to outperform buying Whole Life insurance at $150/month...That have not taken into account if the surrender value of the whole life insurance have appreciated... If it did, it would take a few more years before BTIR can match the returns....

I am not denying that if you BTIR for at least 17 years, you would have outperform buying Whole Life insurance... Maybe something to consider, maybe you all can do your own calculations...

I was thinking the same thing as Shiny Things... You can't compare a $50 term to a $150 wholelife when the coverage have a vast difference. Use a wholelife plan that have the same coverage as the $50 term life and the premium would be much more than $150.
 

blurblur123

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I did my calculation for BTIR and Whole Life Insurance.

My calculation is based on the assumption that a person got $150/month to spend, the returns on investment is 5% yearly.

If the person buy term insurance at $50 a month and invest $100, he would take at least 15 years to outperform buying Whole Life insurance at $150/month...That have not taken into account if the surrender value of the whole life insurance have appreciated... If it did, it would take a few more years before BTIR can match the returns....

I am not denying that if you BTIR for at least 17 years, you would have outperform buying Whole Life insurance... Maybe something to consider, maybe you all can do your own calculations...

Show yr calculation then we can have a discussion.
 

reinphd

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Any opinions? Cheers

I had an ILP i cancelled a few months back and I did a detailed calculation using excel. I quote from my old post:

Hi TS,

It will never be worth it.

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

This is my first great contribution and hope it is useful

Cheers
 

makav31i

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later when I reached home, I would put it up at Google docs let you all see...new calculation will take 4 years for btir...
 
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