ilp insurance

[dork32]

got a friend that bought this ilp insurance. here is how it works

first year
pay 2000
agent take 1700
left 300 to buy unit trust at 1.05
sell half of unit trust at 1.00 to pay for charges
left $80

second to fourth year
pay 2000
agent take 1000
left 1000 to buy unit trust....

my question is this,
can agent really take so much? even if there are no charges and base on 4% annual growth, it will take 13 years to break even. if I buy reits, it takes me just one month to break even the brokerage.

why should the company buy the unit trust at 1.05 and sell it a few days later at 1.00 to pay charges. why cant it pay straight from the premium paid? at 4% return, it will take more than 1 year to recover the loss.

personal I will never buy this stupid stuff. my young friend was really impressed by the beautiful insurance agent sweet talk. he has already paid for the first year.

how will you advise this friend of mine?

 

[bigmice]

got a friend that bought this ilp insurance. here is how it works

first year
pay 2000
agent take 1700
left 300 to buy unit trust at 1.05
sell half of unit trust at 1.00 to pay for charges
left $80

second to fourth year
pay 2000
agent take 1000
left 1000 to buy unit trust....

my question is this,
can agent really take so much? even if there are no charges and base on 4% annual growth, it will take 13 years to break even. if I buy reits, it takes me just one month to break even the brokerage.

why should the company buy the unit trust at 1.05 and sell it a few days later at 1.00 to pay charges. why cant it pay straight from the premium paid? at 4% return, it will take more than 1 year to recover the loss.

personal I will never buy this stupid stuff. my young friend was really impressed by the beautiful insurance agent sweet talk. he has already paid for the first year.

how will you advise this friend of mine?

1.that should be distribution cost include agengy commission
1st year allocation rate 15%
2nd year allocation rate 50%
3rd year allocation rate 75%
4th year onwards 105%
2. return rate 4% is project, actually big chance lose money
3. this as pure term plan is good, put into cash fund
4. need monitor after 15~20years, because maybe laps

 

[dork32]

thanks for all your comments and advice. I will talk to my friend. He is the one that has to make the decisions.

 

[chopra]

only fools buy such plans. hefty commission.

ilp, life, endowment, kids university plan, savings are essentially the same thing, with different weightage in bonds and equity. pretty marketing to come out with these terminologies, u get it?

agents will ask you to pm and discuss because they dont want you to know the truth. you should read more sticky threads here.

buy term invest the rest.