Newbie Guide: How to Find a Good Agent for Investment & Insurance?

[Rommie2k6]

i was inform by an IFA that standalone CI is very expensive compared to a bundle. Do you have some form of illustration to back your claim?

Yes, go get an IFA to give you quotes from Aviva, AXA, NTUC. Unless you can show me a BI whereby the premium is lower for standalone CI vs term+CI I am not inclined to believe that agent.

 

[Rommie2k6]

Standalone CI is slightly priced higher than bundle pack.

For example, Age 30 male non-smoker, 25 year $100k CI standalone is $336 vs 25 year $100k CI rider is $251.

This is misleading and if your agent says that it may be misrepresentation. Sure the CI rider is cheaper, but can you buy a CI rider without the base policy? No!

 

[Elver]

What is the typical range for monthly premium of Term Life Insurance with CI rider (200K insured)?

Is NTUC LUV a good plan for term insurance?

 

[Accesscode]

Does LUV's premium increase with age, as one falls into the new age band?

 

[Elver]

Does LUV's premium increase with age, as one falls into the new age band?

It does. http://www.income.com.sg/insurance/luv/premium.asp

 

[luckyplate]

The Best Agent Meets the Best customer

Generally , this is what i discover:

There are two type of clients in this world
(1) product centric
(2) People centric

Type 1 compares and buy the best product he can find

Type 2 does not really compare product , but base his needs on trust .
More reliant on others to help them find the right product.

If a recommendation goes bad, type 1 blames it on themselves because they
make the decision base on their own judgement most of the time.

Type 2 people just blame it on their financial planner , but keep quiet and suffer in
silence most of the time.

In the end, my conclusion is there is no such thing as a good financial planner.
It always depends on the product that he is selling is suitable for his clients.

A good FP will try to match his client's needs first and not recommend products that they don't need .

You all know the pros and cons of a term plan and a traditional plan .
But it depends on the appetite of each person .

For a conservative type, traditional plan might be good as it generates cash returns over the years.

For a client with good self investment knowledge, he might wants to keep his insurance cost low while investing the rest of his money somewhere else.

True ILP and whole life generates most of the commission , but as a FP, he has to focus on core products in order to meet his obligations to his company . That's his job and nothing wrong .

 

[freespiritsy]

For term critical illness plan, will it be sufficient to get one that lasts till one turns 65 years old or should I get one that lasts till I turn 70 or 75 yrs? I'd think 99 yrs' a tad too long and I don't think I can live till 99 yrs.

Am asking as (1) the agents I spoke don't have answers for me (2) I wonder the age range pple fall into for critical illness claims?

tk u.

 

[Kheetat]

For term critical illness plan, will it be sufficient to get one that lasts till one turns 65 years old or should I get one that lasts till I turn 70 or 75 yrs? I'd think 99 yrs' a tad too long and I don't think I can live till 99 yrs.

Am asking as (1) the agents I spoke don't have answers for me (2) I wonder the age range pple fall into for critical illness claims?

tk u.

I think it is fair that your agents did not provide you with an answer. Let us rephrase your question. If you think you cannot live up to 99 years, how old do you think you will live up to?

The risk of contracting a critical illness starts climbing around the age of late 30s and starting 40s.

If you cant decide on when to buy till, then consider getting a whole-life. Stop paying premiums at age 60, and you can make a lump sum withdrawal if you want, and get covered for the rest of your life. If you leave without making a claim, then leave the monies to your family.

 

[freespiritsy]

I think it is fair that your agents did not provide you with an answer. Let us rephrase your question. If you think you cannot live up to 99 years, how old do you think you will live up to?

The risk of contracting a critical illness starts climbing around the age of late 30s and starting 40s.

If you cant decide on when to buy till, then consider getting a whole-life. Stop paying premiums at age 60, and you can make a lump sum withdrawal if you want, and get covered for the rest of your life. If you leave without making a claim, then leave the monies to your family.

tks, Kheetat.

based on ur experience, do most of ur clients make critical illness claims before they turn 65 years? i'd think likelihood of one contracting a critical illness after 65 years is slim.

I don't mean to be offensive here but everyone advocates against life insurance due to high commission earned by agents.

 

[HandsTied]

tks, Kheetat.

based on ur experience, do most of ur clients make critical illness claims before they turn 65 years? i'd think likelihood of one contracting a critical illness after 65 years is slim.

I don't mean to be offensive here but everyone advocates against life insurance due to high commission earned by agents.

I'm not medical professional, but I think it's safe to say that the chance of getting illness is higher when one gets older. Health deteriorates as a person ages! Why do you think it's harder to get a critical illness after 65 years old?

That said, the amount of insurance cover required when one is older and retired is typically lower than that of a young man. Most medical expenses can be taken care of by a good private shield plan that is guaranteed renewable for life. It is best to have a sum of money for alternative therapies, cope with higher standard of living as a result of illnesses etc. This sum of money should ideally be an amount that one has accumulated during his working years through prudent saving and investing.

Part of this sum of money can be from critical illness cover from a limited pay whole life plan for those who are not confident of buying term and investing the rest.

A young person's priority should still be ensuring that he/she has sufficient coverage with inexpensive term policies first. No point thinking about wasting your budget to cover over 65 if you end up not having enough should you kena something tomorrow.

And also, for whole life limited pay insurance, or just about any other forms of insurance for that matter, one can look for the plan that gives him the most value (most value being maximising the plan's benefits such as coverage and even insurer's reputation while minimizing the costs). As such, it's best for value-conscious people to compare across the board, and avoid leaving your finances to a tied agent who has a serious clash of interest with you as he contractually represents his insurer's interest first.

 

[freespiritsy]

I'm not medical professional, but I think it's safe to say that the chance of getting illness is higher when one gets older. Health deteriorates as a person ages! Why do you think it's harder to get a critical illness after 65 years old?

That said, the amount of insurance cover required when one is older and retired is typically lower than that of a young man. Most medical expenses can be taken care of by a good private shield plan that is guaranteed renewable for life. It is best to have a sum of money for alternative therapies, cope with higher standard of living as a result of illnesses etc. This sum of money should ideally be an amount that one has accumulated during his working years through prudent saving and investing.

Part of this sum of money can be from critical illness cover from a limited pay whole life plan for those who are not confident of buying term and investing the rest.

A young person's priority should still be ensuring that he/she has sufficient coverage with inexpensive term policies first. No point thinking about wasting your budget to cover over 65 if you end up not having enough should you kena something tomorrow.

And also, for whole life limited pay insurance, or just about any other forms of insurance for that matter, one can look for the plan that gives him the most value (most value being maximising the plan's benefits such as coverage and even insurer's reputation while minimizing the costs). As such, it's best for value-conscious people to compare across the board, and avoid leaving your finances to a tied agent who has a serious clash of interest with you as he contractually represents his insurer's interest first.

food for thought - tks!

 

[Kheetat]

tks, Kheetat.

based on ur experience, do most of ur clients make critical illness claims before they turn 65 years? i'd think likelihood of one contracting a critical illness after 65 years is slim.

I don't mean to be offensive here but everyone advocates against life insurance due to high commission earned by agents.

Hi freespiritsy,

I'm sure it is a personal choice whether to get covered after 65 years old. You might think that the chances are slim and you might not want to, but maybe not your children, if you have any.

My parents are in their mid 50s, and soon, they will be retiring soon. The do not have many insurance besides the old shield plans. We are concern about their coverage as they do not have their own retirement savings and if anything happens to them, a financial crisis will kick in.

I'm trying hard to find cost effective ways to keep this from happening and please enlighten me on what are the options that I have that does not call for unreasonable premiums. If they had some forms of protection, at least I wont be that worried.

Life insurance is a long term thing. You may choose to permanently transfer the risk to an insurer, or keep the risk within the family. That dollars might not be straining your budget, but it can affect your next generation.

Well, of course, if you are single and no dependents, then thats another area of discussion.

 

[freespiritsy]

Hi freespiritsy,

I'm sure it is a personal choice whether to get covered after 65 years old. You might think that the chances are slim and you might not want to, but maybe not your children, if you have any.

My parents are in their mid 50s, and soon, they will be retiring soon. The do not have many insurance besides the old shield plans. We are concern about their coverage as they do not have their own retirement savings and if anything happens to them, a financial crisis will kick in.

I'm trying hard to find cost effective ways to keep this from happening and please enlighten me on what are the options that I have that does not call for unreasonable premiums. If they had some forms of protection, at least I wont be that worried.

Life insurance is a long term thing. You may choose to permanently transfer the risk to an insurer, or keep the risk within the family. That dollars might not be straining your budget, but it can affect your next generation.

Well, of course, if you are single and no dependents, then thats another area of discussion.

tks, Kheetat. I hear u. I recognize where protection is concerned, $ will have to spent for the peace of mind but I will like to get a cost-effective term plan if possible. I don't need the investment portion of insurance be it ILP or life plan as I'm an investor myself.

I know it's expensive for old people to buy insurance so people should try to make it a point to get coverage when they are young - lesson learnt for me too as I in the past couldn't bother to find out more about insurance due to disinterest n lack of time due to work but honestly, no excuses there. I also regret not getting insurance for my mum n dad. Currently, my mum is my dependent and I'm married with no children.

I do have other queries on insurance which I will post separately. I noticed u have done ur fair bit of replies to other queries in this forum and the info were informative indeed. tks!

 

[HandsTied]

Indeed, one's personal financial decisions can affect his dependents. Relying on whole life insurance policies becomes a conundrum for the insured and the family!

Someone who can spend X amount of money to buy Y amount of coverage in whole life policies will find that Y amount is insufficient. This is simply because whole life policy is just expensive for every dollar insured! Let me illustrate with the hypothetical example of John who's 25 years old with a child and his wife.

Possible Scenario 1
If John earns about $2,500 and spends $300 to get about $200,000 in coverage, the amount can barely make for 7 years of income replacement should he die, be disabled or be critically ill. Similarly, if John earns $5,000, he might be able to budget $600 to get $400,000 in coverage, but this amount can also only make for less than 7 years of income replacement.

Result: Inadequate insurance protection as whole life policies are expensive for each dollar insured. Pitiful family should John die prematurely.

Possible Scenario 2
In order to overcome this, John might think of increasing the premiums he pays towards a whole life protection plan. His commission-earning agent is more than likely to oblige. He now pays $600 towards a whole life policy that insures $400,000, which can last more than 13 years. With good management of the payout, the family is able to replace John's $2,500 monthly salary in its entirety if they can receive 7.5% returns per annum on the payout. Realistically if they get some 4-5%, they can probably last until the kid grows up and is independent.

However, if 75% of his income goes towards expenses and he has 25% left for insurance, savings and investments, he would have committed almost all of this 25% into the whole life plan, and have $25 a month for his retirement savings. Even if we take him to be a good saver and spends only 60% of his income, he would only have a bout $400 a month to save and invest for his retirement, which means he either has to retire at a much older age, or just decrease the quality of his retirement lifestyle. He can lapse the plan for money, but that means losing his insurance cover, never mind the relatively poor returns of a whole life plan.

Result: Adequate whole life coverage, but not enough money for retirement at a reasonable quality and age. Poor child who has to support John if he reaches an old age without claiming.

Choose Between Being Able to Retire or Being Properly Insured
So, the only things that you can hope for if you're insured solely with a whole life limited pay are 1) you buy little whole life insurance and hope nothing happens to you, or 2) you buy lots of whole life insurance and hope that something happens to you.

Choose Both!
However, there is a strategy that has been described and explained, "buy term invest the rest", which allows you to:

• have adequate life insurance coverage during your working period with an inexpensive term policy
• have sufficient retirement funds for a comfortable lifestyle at a reasonable age of retirement
• have the best insurance "product" of all after retirement - SELF-INSURANCE

Which reminds me of the 3rd scenario whereby one has whole life coverage and yet cannot claim because the medical condition does not satisfy the contractual terms.

Result: Bought insurance, need to have income replacement but cannot claim due to claims requirements not being met. Poor John and his family.

Self-insurance makes YOU the claims officer. No denial of claims, no waiting time, no potentially tedious claims process etc. People who pick whole life coverage as their main policy end up with inadequate resources for self-insurance and thus have to rely on the whole life policy should anything happen - an ironic, self-fulfilling trap! You buy whole life insurance thinking that you cannot self-insure yourself in the later parts of your life and end up not being able to self-insure because you bought whole life insurance!

I think the mathematics of BTIR has been detailed quite enough and it's shown that not only is it more advantageous to an individual, it also numerically superior be it in terms of preparing one for retirement or self-insurance, so one can read earlier posts about that. But of course, not everyone can effectively do BTIR, which is why some (maybe most) people may opt for a small limited pay whole life insurance as a fallback, but BTIR should still be the main strategy behind one's financial portfolio in order to be able to achieve both insuring oneself and being able to retire properly.

 

[genie47]

food for thought - tks!

Another food for thought with all these talk of CI and the cost of it.

Since we are the apex predator if you count us as "animals" to begin with, only 3 things can kill us.

Cardiac arrest
You know those people who died naturally in their sleep. How wonderful. Nobody will say it but their heart stopped just like that. That is what they mean by passed away peacefully. Your heart didn't stop while you are on the MRT train but in bed hopefully not while having sex.

Cancer
'Nuff said. Don't let the statistics scare you. It is not that cancer is more common now. In the past people died coughing out blood and then dropped dead after a long period of prolonged ill-health. Now it gets reported thanks to medical advances in detection. Of course there is smoking, excessive alcohol etc. I can safely say cancer incidences have remained the same.

Trauma
People are in denial over this. BTW, denial is not a river in Egypt. There are wars, terrorism and killer litter. No I don't mean getting that accident insurance plan will help you. Actually that shield plan is you main defence not the accident insurance plan. Don't let the cold callers fool you. You can fork out some payment for breaking your arm. What you need which I find the insurers not really going into it is that disability income. Face it, trauma that results in not having to work for some time is a bummer.

Trauma that results in death? Well, you life insurance took car of that. Congratulations to your dependents!

 

[Majestic12]

Indeed, one's personal financial decisions can affect his dependents. Relying on whole life insurance policies becomes a conundrum for the insured and the family!

Someone who can spend X amount of money to buy Y amount of coverage in whole life policies will find that Y amount is insufficient. This is simply because whole life policy is just expensive for every dollar insured! Let me illustrate with the hypothetical example of John who's 25 years old with a child and his wife.

Possible Scenario 1
If John earns about $2,500 and spends $300 to get about $200,000 in coverage, the amount can barely make for 7 years of income replacement should he die, be disabled or be critically ill. Similarly, if John earns $5,000, he might be able to budget $600 to get $400,000 in coverage, but this amount can also only make for less than 7 years of income replacement.

Result: Inadequate insurance protection as whole life policies are expensive for each dollar insured. Pitiful family should John die prematurely.

Possible Scenario 2
In order to overcome this, John might think of increasing the premiums he pays towards a whole life protection plan. His commission-earning agent is more than likely to oblige. He now pays $600 towards a whole life policy that insures $400,000, which can last more than 13 years. With good management of the payout, the family is able to replace John's $2,500 monthly salary in its entirety if they can receive 7.5% returns per annum on the payout. Realistically if they get some 4-5%, they can probably last until the kid grows up and is independent.

However, if 75% of his income goes towards expenses and he has 25% left for insurance, savings and investments, he would have committed almost all of this 25% into the whole life plan, and have $25 a month for his retirement savings. Even if we take him to be a good saver and spends only 60% of his income, he would only have a bout $400 a month to save and invest for his retirement, which means he either has to retire at a much older age, or just decrease the quality of his retirement lifestyle. He can lapse the plan for money, but that means losing his insurance cover, never mind the relatively poor returns of a whole life plan.

Result: Adequate whole life coverage, but not enough money for retirement at a reasonable quality and age. Poor child who has to support John if he reaches an old age without claiming.

Choose Between Being Able to Retire or Being Properly Insured
So, the only things that you can hope for if you're insured solely with a whole life limited pay are 1) you buy little whole life insurance and hope nothing happens to you, or 2) you buy lots of whole life insurance and hope that something happens to you.

Choose Both!
However, there is a strategy that has been described and explained, "buy term invest the rest", which allows you to:

• have adequate life insurance coverage during your working period with an inexpensive term policy
• have sufficient retirement funds for a comfortable lifestyle at a reasonable age of retirement
• have the best insurance "product" of all after retirement - SELF-INSURANCE

Which reminds me of the 3rd scenario whereby one has whole life coverage and yet cannot claim because the medical condition does not satisfy the contractual terms.

Result: Bought insurance, need to have income replacement but cannot claim due to claims requirements not being met. Poor John and his family.

Self-insurance makes YOU the claims officer. No denial of claims, no waiting time, no potentially tedious claims process etc. People who pick whole life coverage as their main policy end up with inadequate resources for self-insurance and thus have to rely on the whole life policy should anything happen - an ironic, self-fulfilling trap! You buy whole life insurance thinking that you cannot self-insure yourself in the later parts of your life and end up not being able to self-insure because you bought whole life insurance!

I think the mathematics of BTIR has been detailed quite enough and it's shown that not only is it more advantageous to an individual, it also numerically superior be it in terms of preparing one for retirement or self-insurance, so one can read earlier posts about that. But of course, not everyone can effectively do BTIR, which is why some (maybe most) people may opt for a small limited pay whole life insurance as a fallback, but BTIR should still be the main strategy behind one's financial portfolio in order to be able to achieve both insuring oneself and being able to retire properly.

Decent argument, but there is tunnel vision in it.

---

Buy Term and Invest The Rest (BTITR) is a term coined by Wall Street back in the 90s owing to the increasingly lower returns on the cash value of Whole Life Policies due to the increasingly lower interest rates. In advocating this principle, countless people were encouraged to buy the simplest form of insurance and put the rest of their money with financial professionals who were invest the difference for them.

The problem is that in an ever increasing volatile economic climate, your overall risk is elevated because systemic risk in a portfolio, which cannot be removed, is increasing. This means that you will need to be even more well diversified and make even better returns to sustain the variance over time.

This then brings you to the following question: How confident are you that you will be able to beat the market consistently in order to make up for the difference? The other folks in the market are sure as hell not sleeping on the job! BTITR is not as simple as it sounds, especially when you do the math and calculate your Rate of Return (RoR) necessary to break even. We're not even talking about making a profit.

---

I used to subscribe to BTITR myself as well, until an in-depth discussion with a good friend in the industry (FYI, I am in it as well) and some extra thought made me realise that I had been looking at the insurance spectrum through a straw.

Term Plans, Whole Life Policies, Endowment Plans, and ILPs are simply tools for the finance professional. A macro overview has to be taken to evaluate the client's needs and budget before a proper recommendation can be made.

This is where it is extremely important that your adviser does not suffer from tunnel vision. If all you have is a hammer in your toolbox, every problem looks like a nail.

The truth of the matter is that you do not have to rely on only one type of plan for maximal coverage and minimum cost.

For instance, ILPs are actually a very good insurance product - provided you do not view it as an investment. This is a HUGE perspective that a lot of financial planners do not disclose to the client. Your ILP was never meant to be an investment product in the first place! Why buy an ILP when you can buy a Unit Trust if you want to invest?

The Net Asset Value (NAV) of the product is meant to cover your needs in your later years, and surrendering it for its cash value does not make sense as it essentially means that you will be stripped of your protection. However, the risk factor here is that in the event the market hits a recession, your NAV will be adversely affected.

This is where the other policies come into play.

Assuming you had spread your budget across a $100k Whole Life Plan and a $200k Term Life Plan (till age 85), you would still have some level of protection in your golden years in the event a catastrophe wrecks the financial markets (again). This is only an illustration for simplicity's sake.

Just as asset class diversification is the key to reducing your overall portfolio risk in investments, spreading your protection across different types of plans enables you to reduce your reliance on any one plan for protection.

Of course, how the plans are formulated and their structure is very largely dependent on your risk appetite. I am personally risk-inclined. Someone more risk-adverse would want to consider a different protection composition, such as a higher sum assured for a Whole Life Policy, which may however in turn mean that the individual has less money for building his wealth.

---

Other considerations:

- Term Plans look cheap... Until you consider the fact that coverage beyond 62 becomes increasingly expensive. For my own personal coverage at a level of $500k till age 85, I have to pay $400 every month. This is before the inclusion of riders. While this is semi-affordable at my current income level, it does not make monetary sense to put aside this chunk of money for term insurance when it is cheaper to purchase an ILP at my current age bracket for protection and devote the cost savings to investments.

- It doesn't make sense purchasing Term Plans till age 65 only for the sole purpose of it being cheap, if it is your only form of coverage. This is what a lot of people do because it appears cheap on paper. The problem is that in doing so, you are taking on a huge and unnecessary risk. What then after it expires? Rely on your investments to foot the medical bills? Wouldn't you rather leave your assets for your dependents? What if the market crashes or the economy goes into a double-dip recession? Or worse, a Black Swan event happens (again) that throws the global financial markets into turmoil (again). The odds are small but the impact is ridiculous. Beware of tunnel vision.

- I used to think that ILPs were rubbish owing to the ridiculous charges. I now believe that they have their own place in the building of a protection portfolio in addition to Whole Life, Term Life, and depending on your needs, Endowment Plans. Your planner may need to mix and match the policies to maximise your protection within the specified budget.

- Insurance is extremely important. Please take it up now if you lack coverage. All you need is one single event to throw your financial situation into the depths of monetary hell. The risk is very small, but the impact is very real. I love taking risks, and even then I wouldn't run this risk as the downside of it occurring, its impact, is enormous. If you have dependents, then your downside will be even greater than mine.

- Very few people like insurance as they see it as an expense - although prevention is better than cure, this is an area that many people will find it very difficult to follow logically.

 

[HandsTied]

For instance, ILPs are actually a very good insurance product - provided you do not view it as an investment...

Thanks for the laugh!

Do share with us the Benefit Illustration of this wonderful ILP insurance plan.

 

[Majestic12]

My apologies, I shouldn't have used the phrase "very good" as it implied a higher standing for ILPs. Every tool has its place.

---

I would recommend you look at AXA's BI - they have one of the better ILPs around.

However, the BI is exactly that - an illustration. Consideration has to be given to the degree of protection that you are receiving for the premium you are paying. The projected 5% and 9% figures are just that - a projection. The plan should be looked at on a general level rather than a specific level - namely, the risk-varied protection it offers in return for a certain premium.

 

[HandsTied]

My apologies, I shouldn't have used the phrase "very good" as it implied a higher standing for ILPs. Every tool has its place.

Now I'll give it to you if you're talking about a whole life (limited pay) plan since those plans make sense in some functionality it provides even though it theoretically "loses" to BTIR in terms of numerical sensibility.

An ILP life plan though is simply a yearly-renewable term insurance (or level-term which AXA offers as an option) pegged on to an investment fund. In turn, the policyowner suffers massively disadvantageous asset allocation in the early years of the policy to give high commissions to the agent and his/her managers with no real benefit to the policyowner. So-called "premium holidays" and "coverage adjustment" are marketing gimmicks.

Instead, a person can just buy term insurance, and put the rest into an investment fund. Same risk level, same effect, better returns and liquidity due to no massive upfront charges. QED.

 

[Majestic12]

Now I'll give it to you if you're talking about a whole life (limited pay) plan since those plans make sense in some functionality it provides even though it theoretically "loses" to BTIR in terms of numerical sensibility.

An ILP life plan though is simply a yearly-renewable term insurance (or level-term which AXA offers as an option) pegged on to an investment fund. In turn, the policyowner suffers massively disadvantageous asset allocation in the early years of the policy to give high commissions to the agent and his/her managers with no real benefit to the policyowner. So-called "premium holidays" and "coverage adjustment" are marketing gimmicks.

Instead, a person can just buy term insurance, and put the rest into an investment fund. Same risk level, same effect, better returns and liquidity due to no massive upfront charges. QED.

Of course there are massive costs in the early years - how else is the insurance company going to recoup its loss in the event the policy is terminated early? It is very common to see ILP holders viewing it as an investment product when it is not meant to be one. When seen in that misguided light, the insurer has to take sufficient precaution against early termination.

That said, certain companies have better plans than others, depending if the penalties are front or back ended.

The charges are inconsequential IF you view it as a life policy for the long term, and have purchased it at an age where your risk of death, TPD, TI and CI (if you have a rider that covers it) is very low, I.E. Early 20s to 30s. As mentioned, most people buy ILPs with an incorrect outlook in the first place, but this is an issue that is dependent on the agents who sold them.

Of course the premium holidays and coverage adjustment are just gimmicks - they are there as 'bonuses' for the less informed advisers to sell as 'perks'. I never use them as a basis for recommending a product.

That option is possible - if you have sufficient cash flow. Sufficient term coverage of an adequate duration is expensive for young adults who are just starting work, or young families who have high liabilities, since you are essentially paying now to offset the charges you'll incur at a much later date.

I get the point about risk level, effect and (potentially) better returns, but why liquidity when the purpose of an ILP is not as an investment tool? You are not supposed to withdraw the value in the first place.

The time taken for your investment to grow to a certain level has to be taken into account as well. It is similar to the break even point for an ILP's fund.

The other factor to consider is your risk appetite - a risk-inclined person may want to consider the potential upside of the ILP's sum assured based on the NAV being greater than that offered by a traditional policy. The downside is that if he (or she) bases his (or her) protection on that policy alone, there is a sizable risk involving inadequate protection in the event of a market downturn.