Want to cancel my ILP...

Wysie86

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I'm in exactly the same position as new-comer.
Been holding on to the ILP without knowing for 2 years and finally realised it doesn't make any sense.
@new-comer: did you end up cancelling both your savings and ILP? I'm thinking of doing so.

Hi TakoBall, I'm in the exact position as you (2 years), and have decided to cancel my ILP once my Term insurance is in effect. It's a bad mistake I made because I listened to friends, and I think it's better to cut my losses now than never/later.
 

ashao911

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Hi TakoBall, I'm in the exact position as you (2 years), and have decided to cancel my ILP once my Term insurance is in effect. It's a bad mistake I made because I listened to friends, and I think it's better to cut my losses now than never/later.

yes. ILP is bad. Agreed to what you said too:s12:
 

Wysie86

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Yeah. Actually I've been meaning to cancel it a year ago but my friend kinda asked me not to because it'd "make him look bad". But then I realized it's really very stupid to carry on, and I don't think friends should do this kind of things anyway. Only way is to educate ourselves and prevent being fooled again.
 

ochazuke

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cancelled mine some time back. Sum insured only $40k, about 8 years, 9k loss. ILP is really, really bad as an investment vehicle.
 

new-comer

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If your intention is to cancel the ILP entirely, best to head down/call your agent asap ba. Your plan won't lapse from non-payment of premium, it will remain in force until you terminate it or it terminates itself.
And if it's the latter, you won't be able recover anything from it :s22:

Is that so, because I did receive a notice stating that my policy has lapsed actually. I defaulted 3 months of premiums. Thank you, I guess it is at best to terminate it fully.
 

new-comer

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Yeah. Actually I've been meaning to cancel it a year ago but my friend kinda asked me not to because it'd "make him look bad". But then I realized it's really very stupid to carry on, and I don't think friends should do this kind of things anyway. Only way is to educate ourselves and prevent being fooled again.

Don't listen to your friend. Of course, it does make your friend look bad if whatever polices he sold are terminated within a short period of time, but who knows? He might be upset because he is unable to leech the lucrative commissions from this ILP he sold to you?

When it comes to insurance, there is no such thing as "friend" or "relative". Why will they choose to sell you ILPs or endowments instead of those that you really need, a whole life or term life? Think about it.
 

new-comer

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cancelled mine some time back. Sum insured only $40k, about 8 years, 9k loss. ILP is really, really bad as an investment vehicle.

You are lucky, a 9k loss. I know of people having 5-digit losses. What they left/stuck with is just the insurance portion.
 

durianseeds

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What happens when you stop paying premiums is that monthly charges are still being deducted from your ILP's investment value. This value slowly decreases until one day there is not enough left to cover the charges anymore and the plan terminates, hence it terminates itself (that's probably the notice you got). If you had terminated it earlier you could've recovered some money (less any fees incurred). That's my understanding of ILP ah, correct me if I'm wrong.

But anyway glad you have one less worry, and moving forward we're all a bit wiser now :)

Is that so, because I did receive a notice stating that my policy has lapsed actually. I defaulted 3 months of premiums. Thank you, I guess it is at best to terminate it fully.
 

Wysie86

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Don't listen to your friend. Of course, it does make your friend look bad if whatever polices he sold are terminated within a short period of time, but who knows? He might be upset because he is unable to leech the lucrative commissions from this ILP he sold to you?

When it comes to insurance, there is no such thing as "friend" or "relative". Why will they choose to sell you ILPs or endowments instead of those that you really need, a whole life or term life? Think about it.

I agree :). Unfortunately we always realize things a little late, haha. I've already signed up for a term insurance and am looking at a life policy now. Once both are in effect I'll terminate the ILP, at a 8K loss. Oh well.
 

bigpelican

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I agree :). Unfortunately we always realize things a little late, haha. I've already signed up for a term insurance and am looking at a life policy now. Once both are in effect I'll terminate the ILP, at a 8K loss. Oh well.


you terminate now is 8k loss.
if you hold until mature and surrender, is the loss bigger?

i having a ILP for 5 years liao, it mature in another 15 years.
that time dunno about ILP, buy to support friend :S

i dunno terminate now bigger loss or hold until mature bigger loss.
 

new-comer

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What happens when you stop paying premiums is that monthly charges are still being deducted from your ILP's investment value. This value slowly decreases until one day there is not enough left to cover the charges anymore and the plan terminates, hence it terminates itself (that's probably the notice you got). If you had terminated it earlier you could've recovered some money (less any fees incurred). That's my understanding of ILP ah, correct me if I'm wrong.

But anyway glad you have one less worry, and moving forward we're all a bit wiser now :)

Thank you. From what I see, I have been making a loss since day 1 when I bought this policy. No idea why, but anyway I am terminating it soon.
 

new-comer

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I agree :). Unfortunately we always realize things a little late, haha. I've already signed up for a term insurance and am looking at a life policy now. Once both are in effect I'll terminate the ILP, at a 8K loss. Oh well.

Depending on individual, since you have a term insurance, you can consider the BTIR method, which is "Buy Term and Invest the Rest". Check out Shiny Things thread for more information and assistance if needed.
 

new-comer

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you terminate now is 8k loss.
if you hold until mature and surrender, is the loss bigger?

i having a ILP for 5 years liao, it mature in another 15 years.
that time dunno about ILP, buy to support friend :S

i dunno terminate now bigger loss or hold until mature bigger loss.

It really depends. I know some people, the longer they hold onto their ILP, the great their losses. I mean, there is a high chance you can't even hit BEP at 20 years into your policy. How scary and bad is that? Why not you check with the insurance company about your investment value?
 

durianseeds

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There are 2 sub-categories of ILPs: ILP as a life insurance type and ILP as a pure investment type. The main difference is that the first type provides a guaranteed sum assured as protection (eg 100k). The second type also gives you a payout benefit, but usually just based on the current value of your ILP (i.e. No guarantee). The next difference is that for ILP as life insurance, your main goal should be protection, NOT investment returns imo. Confusion sets in when clients (and agents) mix up the 2 objectives.

Allocation rates for pure investment ILPs will be much higher (even exceeding 100%) from day one of premium payment. Distribution costs are also different because for the life insurance ILP, part of your monthly premium goes to paying the mortality charges (which increases as you age); basically the cost of that guaranteed sum assured. This alone will give you a hint why the protection and investment returns objectives are conflicting.

WHY people are still buying this product? Of course there are merits, especially if you got it really young. Post is getting long but hope it helps :) if you want a more detailed answer pm me

Hey all, is there any difference btn an ILP and whole life ilp?

Also are distribution costs and allocation rates different? Arent they the same thing
 

Shion

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ILP is a waste of time and money. All the deductions will ultimately eat into your investment "earnings".

FYI market is not doing well at present moment, projected to get worse soon. You sure you want to lock your money inside ILP or have more flexibility with your cash via your own stock trading/investment ?
 
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Shion

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There are 2 sub-categories of ILPs: ILP as a life insurance type and ILP as a pure investment type. The main difference is that the first type provides a guaranteed sum assured as protection (eg 100k). The second type also gives you a payout benefit, but usually just based on the current value of your ILP (i.e. No guarantee). The next difference is that for ILP as life insurance, your main goal should be protection, NOT investment returns imo. Confusion sets in when clients (and agents) mix up the 2 objectives.

Allocation rates for pure investment ILPs will be much higher (even exceeding 100%) from day one of premium payment. Distribution costs are also different because for the life insurance ILP, part of your monthly premium goes to paying the mortality charges (which increases as you age); basically the cost of that guaranteed sum assured. This alone will give you a hint why the protection and investment returns objectives are conflicting.

WHY people are still buying this product? Of course there are merits, especially if you got it really young. Post is getting long but hope it helps :) if you want a more detailed answer pm me

When you are young, get a life policy instead. Cheaper premiums.

Why buy ILP when young ? For what ? No savings, no protections and you want to start investment ?

Buy ILP for what ? Charges are high, from the high insurance charges which increases as we age to management fees and all those other ad-hoc charges which most insurance agents won't tell their clients.

All only tell what "your 8% non-guaranteed returns" or "premium holiday". And whats next ? When something happens, blame the clients for not reading properly
 
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MaoZeDuo

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When you are young, get a life policy instead. Cheaper premiums.

Why buy ILP when young ? For what ? No savings, no protections and you want to start investment ?

Buy ILP for what ? Charges are high, from the high insurance charges which increases as we age to management fees and all those other ad-hoc charges which most insurance agents won't tell their clients.

All only tell what "your 8% non-guaranteed returns" or "premium holiday". And whats next ? When something happens, blame the clients for not reading properly

if u are referring to a wholelife policy... actually its seems more expensive than ilp. because ilp only minimum $100 ma... somemore can add in ci rider without topping up cash (cos deduct units)... makes ilp look cheaper...

but u are right...

the fact is... there is a guaranteed yield in a wholelife plan provided u commit for X years... whereas for ilp... the fees can easily hit 6% on a $100 plan...

6% fees vs non-guaranteed 8% return... well...
 

Shion

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if u are referring to a wholelife policy... actually its seems more expensive than ilp. because ilp only minimum $100 ma... somemore can add in ci rider without topping up cash (cos deduct units)... makes ilp look cheaper...

but u are right...

the fact is... there is a guaranteed yield in a wholelife plan provided u commit for X years... whereas for ilp... the fees can easily hit 6% on a $100 plan...

6% fees vs non-guaranteed 8% return... well...

Well...Take term insurance...Need not worry so much :D
 

Wysie86

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you terminate now is 8k loss.
if you hold until mature and surrender, is the loss bigger?

i having a ILP for 5 years liao, it mature in another 15 years.
that time dunno about ILP, buy to support friend :S

i dunno terminate now bigger loss or hold until mature bigger loss.

No one can predict the future, but I know I'm a lot more comfortable investing the rest on my own, and just getting a cheaper term and life insurance for coverage.

If you hold on for another 15 years, you've to think about not just the losses from putting into the ILP, but the also the losses that you could have otherwise made if you invested on your own.

End of the day it's about your own comfort level as well. I don't feel comfortable having with ILP.
 
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