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

[HandsTied]

If you invest into ETFs and buy term, there are certain riders in the market that has higher maximum age expiry than the term itself, so tell me where to add these riders?

And what riders are you talking about that's so important one must have it even after retirement?

We have already said many times that the end-goal of BTIR is self-insurance. Self-insurance is much better than any riders because no claim needs to be made, and therefore cannot be denied on medical or legal technicalities. Proper financial planning involves insuring risks that a person cannot undertake.

When one has just started out working, his working career is still long and he does not have much resources. Hence, he requires insurance such that he is able to survive even if he is unable to work, or have to cope with a higher standard of living due to impairment for the rest of his life which can be over 60 years for a young person. Hence, his need for insurance is the greatest at this time.

When one is retired, his liabilities are reduced. Children will be self-sufficient, the he has less years left to live, he is no longer drawing an income and hence income replacement needs are practically zero, and he has accumulated a sum of money to be self-insured. His need for insurance is much lower. If he is self-insured, he can do away with insurance. A medical Shield plan will go a long way to ensure that sudden, high medical expenses are insured, and his self-insurance fund will ensure that he is able to cope with any higher standard of living due to impairment.

I have field-tested ILP vs WL and even after mentioning the charges of ILP, clients still chose ILP as their first place and purchase WL at a later stage. I have highlighted that ILP (Insurance portion) is only meant up to 55yo and to be reduced to zero. And because I clearly told them must reduce, they have WL as their next plan. But why do they still choose ILP first? Why don't just go for WL + ILP (Death Benefit of 110% of premium = 1% charge)? Reason - Too troublesome. And now it's the case of doctor prescribing medicine to patient and patient refuses to eat the medicine, you gonna force a gun at patient?

Your highlighting that ILP should have its coverage reduced to zero further substantiates that the person can just buy a term to age 55, and invest the savings.

Don't keep using the red herring that ILP is more flexible than WL, or people will choose ILP over WL. People will choose ILP because the concept makes sense. What they do not know is that they can just BTIR which is as convenient and nets them greater returns.

This is a "doctor" who has Pill A and B to prescribe. A has the most side-effects and earns the most money for the doctor. B has lower side-effects but earns very little money for the doctor. The "doctor" takes Pill A and compares it to Pill C, and says that his patients wants Pill A over Pill C and proclaims that patients wants Pill A instead of Pills B or C. In the first place, a real doctor is supposed to prescribe proper medication and treatment for his patients. If a drug addict goes to a doctor and asks for medical marijuana, you will be the "doctor" to sell him as much marijuana as he wants as long as you can earn from it. You will even say, "hey what's wrong? I'm relieving that guy of his withdrawal symptoms! Want me to point gun at him to take medication that eases him off drugs meh?" You are a professional - Professional salesman.

This is so not true. Effect of deduction is the same but the distribution costs is actually higher.

This is an outright lie. I can Mathematically prove that you are lying.
Person A has $2,400/yr and puts that to an ILP. Person B has $2,400/yr and buys term invests the rest. Let's assume term plan is around $800/yr for same sum assured.

Year 1
ILP cash value: $100
Premiums grow at 9%: $2,616
Effect of deductions: $2,616 - $100 = $2,516

BTIR "cash value": $1,520 (5% charges)
"Premiums" grow at 9%: $2,616 (inclusive of term plan's premiums)
Effect of deductions: $2,616 - $1,520 = $1,096

$1,096 < $2,516 -> Simple mathematics.

Every year on after that will just see the difference between effect of deductions grow further and further apart because $100 compounded at 9% will always be smaller than $1,520 compounded at 9%. The effect of deductions for ILP is HIGHER than BTIR. Don't lie about effect of deductions being the same. Distribution costs form a significant part of "deductions", so don't pretend you are drawing a higher commission without any effect to the policyholder. Unconscionable.

When you said ease of replicating, have you actually conducted a survey? Do you know customers are already complaining why buying ONE policy they received so many letters? They ask why can't just consolidate everything together? Customers know should diversify investment and on different companies but majority just remain at one preferred choice due to convenience. And to roomie for keep saying I never justify the benefit of ILP to be better than BTIR - I have, it's convenience not the figures people care. Just ask yourself this, why are so many elderly still keeping their money in bank when it is obvious the value is reducing due to inflation? You tell them figures or guaranteed they still don't want because they want ready cash. Likewise, there are those who preferred WL over ILP or term becoz they don't want to lump insurance with investment and not going to go into the hustle of investing for hedging sum assured's value against inflation, just let WL to do its job of hedging against inflation. And in nowhere of my post I condemned BTIR. I am voicing that it is totally bias to say ILP has no advantages. Period[/COLOR]

Don't cock-and-bull about "convenience". Still keeping to your pretense that BTIR is difficult. You think someone will wake up one day and say, wah I got to buy ILP? No - ILPs are promoted and sold, not bought. Laymen will know about the generic concepts of insurance, but they will not know of ILP until some salesperson goes up to them and trumpet the merits of it.

Your analogy is also a red herring, but I'll humour you. BTIR versus ILP is not investment plans versus savings account. It's a 1% 1-year fixed deposit vs a 0.5% 1-year fixed deposit. Even the elderly will know better than to put in the 0.5% one IF they were informed of the 1%. You're just the salesman who will tell them "Auntie this 0.5% Fixed Deposit is good!" without telling them about the 1% one and then saying that they prefer lower interest rates and that too much interest is too inconvenient for them.

The charges table are spread across a few pages and it's very clearly written compared to WL and term where you have no idea how you are being charged. ILP is the most transparent product - this is said by MAS, Moneysense and many authorities.

It's the most transparent insurance cash value product, yes. Cream of the crap. Still useless. The transparency means nothing to the layman because it is transparent but it is technical. I can say that Linux source code is open and transparent. Does that mean the layman without programming skills is able to take the source code and come up with his own Linux distribution bundle?

I can calculate to you exact how the effect of deduction and distribution costs is affecting your premium coming in for ILP products but for anything else, I can't tell you how much are the actual charges because it is not mandate to disclose by LIA or MAS.

Clearly you have difficulty calculating because you have falsely mentioned that effect of deductions is the same as BTIR.

 

[xiaoevil]

Rommie2k6 wrote:

Wasn't that what I also said for the case of BTIR for conservative investor vs WL, that it is a less clear-cut decision? I did list my opinion that BTIR is still better and the reasons why. I leave it up to the consumer to decide for themselves.

If by "better", you are solely referring to the R.O.I. of BTIR then I do agree with you. Of course one would save a lot if there are lesser middleman (such as financial consultants and brokers). You can even choose to invest on SGX through online banking, with DBS it's only as little as $18 per small transaction. However, there are still many who wish to have an agent. And like buying anything else, you should know engaging a consultant means you need to pay for the service. Unfortunately for you, insurance products are designed in such a way that whether or not you engage a consultant's advice, you have to pay for the distribution charges. Deciding for yourself what to purchase for insurance products will not help you to save money. I will elaborate on ILP below.

What do you mean by "saving plans"? Endowment? ILP is the most toxic products because it is BTIR in expensive wrappers where clients bear the full risk of investment under very adverse situations (namely high fees and expenses), and because people who buy ILP are financially uneducated, they will rely on their agents to "manage" for them. That will often end up disastrously (may the agent's fault through excessive churning, may be the expensive fees fault... I cannot pass judgment), and then their cash value can go to zero during their twilight years. If that is not toxic, then what is?

Consumers should google "ILP time-bomb". Many cases have been reported on Tan Kin Lian blog.

If you have actually generated the benefit illustration of Term + Unit Trust vs ILP for say a guy age 20, non-smoker, You would realised that the ILP give higher sum assured but at the expense for lower investment returns for the same premium amount. This is due to ILP (UT) charging only 1% assurance charges and 100% allocation of premium into units, whereas RP-ILP have only 15-20+% allocation of premium into investment of ILP funds. I do not know for other agents how they do it, but I only sell ILP to those younger age group because of budget constraint. Minimum premium for ILP (UT) is $150/month (Yes last time you can do a quarterly $180/3mth but now I can't, at least not with Prudential as per quarterly it is $450/3mth). Then you have to add term. My client's budget is only less than $150 per month, I can't do that. You may ask me to do it by left method, which is to invest $450 every half yearly on the quarterly mode set in the policy (skipping 2 deduction a year out of the 4 deductions), but the problem lies with my clients haven't even cultivated savings habit, end of 6 months may not have the $450. Even though I have been telling many young clients if their surplus is $500/mth, put $200 into financial planning and the rest save in bank first to build emergency funds. But end of the day, I see the $200 working as what it should be but nothing much in the so-called "emergency funds" of my client's.


Just because it is "approved" financial product, doesn't mean that it's good. In fact the latest CPF restrictions on "approved" unit trust only made matters worse since index funds are no longer included! Yes, I blame MAS partly for this ILP fiasco... but seriously given their lack of standard what do you expect? But I also blame agents for selling ILP knowing that it will do more harm than good for the client (especially during their retirement).

I have always recommended ILP for the younger group if their decision is to get an endowment plan, because even with the high charges, ILP offers potentially higher returns even after the charges, and higher protection. My advise has been constantly telling them to start reducing ILP's sum assured after 40yo as their liabilities decreases, down to zero (if they have no dependents to support) at age 55. Continue to service the policy until retirement age (e.g. 65yo) then do partial withdrawal while continuing investing the rest of the cash in the ILP. You would notice by this strategy, after age 55, there are no longer any assurance charges, only investment and sales charge of the units. and because of the 5% bonus in ILP after the 10th year, during this 55-65 yo period, they are actually not paying a lot of charges compared to those ILP (with 110% death benefit).

I am not sure what this APL feature you are referring to (I did a search on the page but nothing came up). You will have to elaborate on this. To my knowledge there is no hidden risks that is unique to Term but not ILP and WL, with the exception of investment risk but that can be managed.

APL = Auto Premium Loan, commonly referred to as Premium Holiday which Term policy do not carry. Should one get retrenched or hit a financial crisis in his life, he cannot stop paying premium or looses his term coverage. WL and ILP on the other hand allow you to do that by eating into the cash value. Yes, you may say the client can use the value in BTIR to finance the term premium. But the problem is what is that 30 days grace period is actually very short. Due to unforeseen circumstances, client may take more than 30 days to realise he haven't really paid for his term policy. By then it may be too late to reinstate it. Do you know that survey was done in the US during financial crisis that the biggest concern for the elderly was to make sure no matter what living expenses they cut, must always rmb to pay the premium for their medical insurance. Because if they never pay on time, they loose the coverage. This problem applies to all products without cash value, such as term and medical plans.


Unfortunately most people who buy ILP hold it till they are old, and that's when mortality charges eat into their cash value.

Unfortunately they never buy from agents like me who do not treat ILP as Whole life policy. But it is definitely a good plan for a start and can be used for retirement planning. It does not work if one wish to cover for life and make withdrawals on the ILP. Any withdrawals made may risk loosing coverage at old age.

Yes, notice how it exponentially increases for yearly renewable term. Personally, I prefer to have level term because of the predictability in costs and also in planning for future finances. Given the high risks of retrenchment and employment in Singapore, I rather pay more when I am younger and financially more able than when I am old. Renewable term runs the risk of having too expensive premium in the late years (e.g. 55-65).

This is why I always recommend limited pay WL policy first. But for a 20yo male, non-smoker. He has higher sum assured and potential higher returns compared to WL policy in the initial stage. E.g., I need to spend $150 for a 100k WL policy but only $100 for a 100k ILP (this is not to exact figure). The shortfall in insurance can then be complimented by a 10-20yrs term to exercise conversion over to WL/ILP in later stage.

Without showing the details of Mercer's portfolio solution, you have no basis for your claims.

You can check with Mercer lar, I'm still researching on it as compared to what I have been doing. But definitely it is good for those clients whose agents randomly pick a fund to recommend.

If so, why do you even sell ILP? Why not just sell Term and ask clients to invest the rest? Btw, it is untrue that agents cannot manage investment. Again, your limitations as a tied agent does not apply to IFA. I know for a fact that IFA can recommend unit trust. Not sure if they can recommend ETFs listed on stock market though....

IFA can sell unit trust, basically anybody with M8 can sell pure unit trust (those that don't even have 110% death benefit). But out of the company's selection of funds, consultants are not allowed to give recommendation of which funds to invest for the client or how much % to each fund.

 

[HandsTied]

You are twisting my definition of value-adding. When someone with no knowledge of financial planning sits down with me, I am sure he/she has something to gain POSITIVELY. At least to learn about Cash flow management, Debt reducing strategies, cultivating savings habit by setting up new bank savings account, calculating sum assured, education planning for kids, retirement planning, what the difference between medishield and pte shield plan, what's deductibles and co-insurance, etc. You are telling me all these are poison?

Similarly, you twisted Rommie's words.

Even if you "value-add" to them with all kinds of financial strategies and information, you shortchange them many times more by making them buy products that are unnecessarily expensive, underinsure them, and/or leave them inadequately prepared for retirement.

It is never fair when there's bias towards ONE best way for ALL.

No, we are focussed now on BTIR vs ILP. BTIR does practically everything ILP does and saves on the unnecessary charges. This is mathematically substantiated. If there is an ILP that has lower charges than BTIR, then we will endorse this ILP plan. Don't shout "bias" just because your favourite product which nets you high commission is lousier than BTIR.

You are taking my point out of its context when I was mentioning that supposed I recommend BTIR but client do not want it, wants only ILP. And you were asking me that as a doctor I should not give in to what client wants and walk away. So walking away leave the person NO INSURANCE.

Have you always showed them BTIR first before ILP? Knowing your integrity you will say yes even though you and I know that you will not. Anyway, being a tied agent you are also unable to implement a proper BTIR strategy for your client. So don't cock and bull and say that your client doesn't want it when you have never presented a proper BTIR strategy, and cannot do it because of your limitation as a contractual product promoter.

You have no idea the kind of commission from single premium ILP can give, there are trailer commission to it as well. My commission do not become a lot lesser. In fact, the client will be happy to buy more insurance when money is profited. If you understand sales, you would know there are a lot of opportunities to make money, don't have to cause people to be underinsured or squeeze any money out of one.

Again, trying to lie about how much you will get.

ILP remuneration
$500/mth ILP = $6,000 API
1st year comm: $3,300, additional bonus of up to $1,650.
2nd year comm: $1,800, additional bonus of up to $900.
3rd year comm: $600, additional bonus of up to $300

First 3 years remuneration: $5,700 (additional $2850 receivable as bonus, average agent should be able to get at least half. Regardless of whether the agent gets or not, these are all distribution costs)

Production is $6,000 API. 18 such cases will net you a free overseas trip.

BTIR remuneration
$100/mth term = $1,200 API

1st year comm: $600, additional bonus of up to $300
2nd year comm: $300, additional bonus of up to $150
3rd year comm: $120, additional bonus of up to $60

$400/mth ILP 100% = $480 weighted API
1st year comm: $108 sales charge comm, non-bonusable
2nd year comm: $108 sales charge comm... etc

First 3 years remuneration: $1,344, additional $510 bonus.

Production is $1,680. You need to get more than 60 such cases to qualify for your free trip.

Even if you factor in your trailing and level comm from the ILP, your FV of the ILP you have sold is always more because of time-value of money.

And do you know what is the BIGGEST RISK of term insurance? If you forgot to pay your premium, there's no premium holiday or whatsoever. Your policy may not be able to reinstate.

Term plans can be paid by GIRO. Next thing you going to say is that client's bank account going to be zero right? Continue coming up with all kinds of obscure scenarios to justify your ILP.

The BIGGEST RISK of ILP is that you go into "premium holiday" because it's a marketed feature, and the policy goes into non-forfeiture mode and the client will happily just leave it as it is because to him it's a "good feature" and the plan can just lapse because he will "forget" to reinstate it. Or maybe during this time he will develop health complications, and when he reinstates it, he has to undergo health underwriting even though he has been paying mortality charges all this while. Nonsensical.

What's happening in the market does not condone u to disregard ILP's advantages totally.

I know la your commission a lot. I already highlighted it above.

Yawn! I do recommend term plans but in very short period of 10 years that's meant to be converted to WL/ILP, if you must ask.

Of course, better to sell something than nothing. Make him your client and next time can sell your ILP to get your fat commission.

Tell me what status mark can distinguish a REAL financial planners from the fakes? Maybe you guys should write a guide on this instead of praising BTIR.

This guide is specifically for that purpose.

I don't think I have dismiss any companies' products. If my client want to do product comparison - go ahead. Even if I know my company's product at that point in time is the best - go ahead and compare. Because what's best product in the market will never stay the best. Go compare agents instead.

That is if they think of comparing. Otherwise you will just keep mum and sell them whatever earns you money.

So what if the best product in the market never stays best? The logical thing to do is to get the best product at the point of sign up.

 

[HandsTied]

If by "better", you are solely referring to the R.O.I. of BTIR then I do agree with you. Of course one would save a lot if there are lesser middleman (such as financial consultants and brokers). You can even choose to invest on SGX through online banking, with DBS it's only as little as $18 per small transaction. However, there are still many who wish to have an agent. And like buying anything else, you should know engaging a consultant means you need to pay for the service. Unfortunately for you, insurance products are designed in such a way that whether or not you engage a consultant's advice, you have to pay for the distribution charges. Deciding for yourself what to purchase for insurance products will not help you to save money. I will elaborate on ILP below.

Again you are pretending that BTIR cannot be done through an agent.

If you have actually generated the benefit illustration of Term + Unit Trust vs ILP for say a guy age 20, non-smoker, You would realised that the ILP give higher sum assured but at the expense for lower investment returns for the same premium amount. This is due to ILP (UT) charging only 1% assurance charges and 100% allocation of premium into units, whereas RP-ILP have only 15-20+% allocation of premium into investment of ILP funds. I do not know for other agents how they do it, but I only sell ILP to those younger age group because of budget constraint. Minimum premium for ILP (UT) is $150/month (Yes last time you can do a quarterly $180/3mth but now I can't, at least not with Prudential as per quarterly it is $450/3mth). Then you have to add term. My client's budget is only less than $150 per month, I can't do that. You may ask me to do it by left method, which is to invest $450 every half yearly on the quarterly mode set in the policy (skipping 2 deduction a year out of the 4 deductions), but the problem lies with my clients haven't even cultivated savings habit, end of 6 months may not have the $450. Even though I have been telling many young clients if their surplus is $500/mth, put $200 into financial planning and the rest save in bank first to build emergency funds. But end of the day, I see the $200 working as what it should be but nothing much in the so-called "emergency funds" of my client's.

Long paragraph detailing how you are limited by your platform.

I have always recommended ILP for the younger group if their decision is to get an endowment plan, because even with the high charges, ILP offers potentially higher returns even after the charges, and higher protection. My advise has been constantly telling them to start reducing ILP's sum assured after 40yo as their liabilities decreases, down to zero (if they have no dependents to support) at age 55. Continue to service the policy until retirement age (e.g. 65yo) then do partial withdrawal while continuing investing the rest of the cash in the ILP. You would notice by this strategy, after age 55, there are no longer any assurance charges, only investment and sales charge of the units. and because of the 5% bonus in ILP after the 10th year, during this 55-65 yo period, they are actually not paying a lot of charges compared to those ILP (with 110% death benefit).

Yet again talking about the merits of ILP when they are not exclusive to ILPs, and can be done as conveniently as BTIR to greater effect at lower cost.

APL = Auto Premium Loan, commonly referred to as Premium Holiday which Term policy do not carry. Should one get retrenched or hit a financial crisis in his life, he cannot stop paying premium or looses his term coverage. WL and ILP on the other hand allow you to do that by eating into the cash value. Yes, you may say the client can use the value in BTIR to finance the term premium. But the problem is what is that 30 days grace period is actually very short. Due to unforeseen circumstances, client may take more than 30 days to realise he haven't really paid for his term policy. By then it may be too late to reinstate it. Do you know that survey was done in the US during financial crisis that the biggest concern for the elderly was to make sure no matter what living expenses they cut, must always rmb to pay the premium for their medical insurance. Because if they never pay on time, they loose the coverage. This problem applies to all products without cash value, such as term and medical plans.[/qoute]

Eh so should have ILP medical plan right?

GIRO, GIRO, GIRO. Which is why a proper financial planner will ensure that the client has enough emergency cash in his bank. Term insurance is a much lower expense than ILP which one can still pay even if he is out of a job. ILP on the other hand, will be the first thing an insured drops and decides to go on the advertised "premium holiday" and eventually have to incur health underwriting upon reinstating the plan.

Unfortunately they never buy from agents like me who do not treat ILP as Whole life policy. But it is definitely a good plan for a start and can be used for retirement planning. It does not work if one wish to cover for life and make withdrawals on the ILP. Any withdrawals made may risk loosing coverage at old age.

It will be a whole lot more fortunate if they don't buy ILPs in the first place. You already said yourself - you will die right? What happens to the 25-year-old in 30 years if you're gone and he doesn't reduce the assurance charges?


This is why I always recommend limited pay WL policy first. But for a 20yo male, non-smoker. He has higher sum assured and potential higher returns compared to WL policy in the initial stage. E.g., I need to spend $150 for a 100k WL policy but only $100 for a 100k ILP (this is not to exact figure). The shortfall in insurance can then be complimented by a 10-20yrs term to exercise conversion over to WL/ILP in later stage.

Okay got limited payment whole life or not, ILP is still grossly inferior to BTIR for what it does.

IFA can sell unit trust, basically anybody with M8 can sell pure unit trust (those that don't even have 110% death benefit). But out of the company's selection of funds, consultants are not allowed to give recommendation of which funds to invest for the client or how much % to each fund.

Your platform limitation does not affect people who are not tied to your platform.

 

[iAdvisor]

I have always recommended ILP for the younger group if their decision is to get an endowment plan, because even with the high charges, ILP offers potentially higher returns even after the charges, and higher protection. My advise has been constantly telling them to start reducing ILP's sum assured after 40yo as their liabilities decreases, down to zero (if they have no dependents to support) at age 55. Continue to service the policy until retirement age (e.g. 65yo) then do partial withdrawal while continuing investing the rest of the cash in the ILP. You would notice by this strategy, after age 55, there are no longer any assurance charges, only investment and sales charge of the units. and because of the 5% bonus in ILP after the 10th year, during this 55-65 yo period, they are actually not paying a lot of charges compared to those ILP (with 110% death benefit).

Then might as well buy term till 55, and invest the rest. anw, invest the rest doesn't mean really buy and monitor themselves, there alot of pure investment plan.

APL = Auto Premium Loan, commonly referred to as Premium Holiday which Term policy do not carry. Should one get retrenched or hit a financial crisis in his life, he cannot stop paying premium or looses his term coverage. WL and ILP on the other hand allow you to do that by eating into the cash value. Yes, you may say the client can use the value in BTIR to finance the term premium. But the problem is what is that 30 days grace period is actually very short. Due to unforeseen circumstances, client may take more than 30 days to realise he haven't really paid for his term policy. By then it may be too late to reinstate it. Do you know that survey was done in the US during financial crisis that the biggest concern for the elderly was to make sure no matter what living expenses they cut, must always rmb to pay the premium for their medical insurance. Because if they never pay on time, they loose the coverage. This problem applies to all products without cash value, such as term and medical plans.

I think you haven realise how cheap a term plan is, especially if we are talking at 100k, for 55 yrs.

Unfortunately they never buy from agents like me who do not treat ILP as Whole life policy. But it is definitely a good plan for a start and can be used for retirement planning. It does not work if one wish to cover for life and make withdrawals on the ILP. Any withdrawals made may risk loosing coverage at old age.

If a person can only afford a WLP or ILP, ur choice is ILP. since you prepare to reduce the sum assured at 55. What if medical condition strike 1 year later? His budget is on this ILP, reducing the coverage (with medication condition)is going to be stupid, but continue funding this will also dies. How would you help in this case? if u really intend to grow wealth for young client, then BTIR should be a way. if 150 is the budget, $50 for term, $100 for pure investment is even better than ILP. I have an existing case, that this client is almost 50 holding 2 prulink, with a medical condition. She cant terminate the 2 plan, or reduce sum assured, n worst is, she bought the plan with the intention for protection!

If your young client without protection, buys into ILP. and developed diabetic after that. What you prepare to do? Protection should always comes first. As a advisor, you should highlight the need for protection to be done, before anything else.

This is why I always recommend limited pay WL policy first. But for a 20yo male, non-smoker. He has higher sum assured and potential higher returns compared to WL policy in the initial stage. E.g., I need to spend $150 for a 100k WL policy but only $100 for a 100k ILP (this is not to exact figure). The shortfall in insurance can then be complimented by a 10-20yrs term to exercise conversion over to WL/ILP in later stage.

Your product are expensive. I can give my client 250k life coverage at less than 100 mthly, age 20, male. 25 yrs limited payment. I dun mean to compare product but I think the argument that ILP is better than WLP, i think is just crap.

IFA can sell unit trust, basically anybody with M8 can sell pure unit trust (those that don't even have 110% death benefit). But out of the company's selection of funds, consultants are not allowed to give recommendation of which funds to invest for the client or how much % to each fund.

We are allowed to advise on M8. If client is risk adverse but choose a high risk fund, are we not responsible to advise that its not suitable? is this consider recommendation? We can advise but at our own risk. check out more.

 

[xiaoevil]

HandsTied wrote:

And what riders are you talking about that's so important one must have it even after retirement?

There are many riders such as early stage CI, CI, and other riders. But I shall illustrate on CI coverage. If one starts BTIR at 50yo, will he reach self-insured by 65? Does the investment portion keep up to the term insurance in such a short period? Without a WL or ILP plan, your CI can only carry you to 70yo or some companies allowed up to later age - I don't know, but the problem is term don't provide WL coverage. My question is, is BTIR applicable to anyone at all stages of life? The insurance industry has limitation on Term insurance. I know that there are those Whole Life term for High Net worth but CI rider cannot be added on to it. You can say this is the product gap or because insurance companies want to make money. Hey, they are not charity business. If you want to fault them, there are many business that you can fault too.

We have already said many times that the end-goal of BTIR is self-insurance. Self-insurance is much better than any riders because no claim needs to be made, and therefore cannot be denied on medical or legal technicalities. Proper financial planning involves insuring risks that a person cannot undertake.

But before one reaches self-insured, you do need the riders such as CI, Disability income, waiver of premium on CI, etc.

When one has just started out working, his working career is still long and he does not have much resources. Hence, he requires insurance such that he is able to survive even if he is unable to work, or have to cope with a higher standard of living due to impairment for the rest of his life which can be over 60 years for a young person. Hence, his need for insurance is the greatest at this time.
Agree, but it is very hard to use BTIR for the older group because WL Limited payment is just a little bit more over term insurance but covers for life.


When one is retired, his liabilities are reduced. Children will be self-sufficient, the he has less years left to live, he is no longer drawing an income and hence income replacement needs are practically zero, and he has accumulated a sum of money to be self-insured. His need for insurance is much lower. If he is self-insured, he can do away with insurance. A medical Shield plan will go a long way to ensure that sudden, high medical expenses are insured, and his self-insurance fund will ensure that he is able to cope with any higher standard of living due to impairment.

Your highlighting that ILP should have its coverage reduced to zero further substantiates that the person can just buy a term to age 55, and invest the savings.

Don't keep using the red herring that ILP is more flexible than WL, or people will choose ILP over WL. People will choose ILP because the concept makes sense. What they do not know is that they can just BTIR which is as convenient and nets them greater returns.

Income replacement need is practically zero only when proper retirement planning has been done and fulfilled.
And at many times, budget is a constraint. BTIR will give me the death benefit amount but I still need more coverage from now till after 65 or even 70, where the term cannot cover me anymore. Even with money I gained from BTIR, I cannot purchase more insurance at such old age. Insurance is leveraged dollar which the market do not provide term beyond a certain age.


This is a "doctor" who has Pill A and B to prescribe. A has the most side-effects and earns the most money for the doctor. B has lower side-effects but earns very little money for the doctor. The "doctor" takes Pill A and compares it to Pill C, and says that his patients wants Pill A over Pill C and proclaims that patients wants Pill A instead of Pills B or C. In the first place, a real doctor is supposed to prescribe proper medication and treatment for his patients. If a drug addict goes to a doctor and asks for medical marijuana, you will be the "doctor" to sell him as much marijuana as he wants as long as you can earn from it. You will even say, "hey what's wrong? I'm relieving that guy of his withdrawal symptoms! Want me to point gun at him to take medication that eases him off drugs meh?" You are a professional - Professional salesman.

Let me show you what's the stand I take through your analogy:
This is a "doctor" who has Pill A and B to prescribe to patientswith different medical conditions background. A has the most side-effects and earns the most money for the doctorbut is best suitable for patients with medical conditions. B has lower side-effects but earns very little money for the doctor but is suitable for patients with no medical conditions.

The "doctor" takes Pill A and compares it to Pill C, and says that his patients wants Pill A over Pill C and proclaims that patients wants Pill A instead of Pills B or C. In the first place, a real doctor is supposed to prescribe proper medication and treatment for his patients. If a drug addict goes to a doctor and asks for medical marijuana, you will be the "doctor" to sell him as much marijuana as he wants as long as you can earn from it. You will even say, "hey what's wrong? I'm relieving that guy of his withdrawal symptoms! Want me to point gun at him to take medication that eases him off drugs meh?" You are a professional - Professional salesman.
This is totally off the point I'm trying to show.


This is an outright lie. I can Mathematically prove that you are lying.
Person A has $2,400/yr and puts that to an ILP. Person B has $2,400/yr and buys term invests the rest. Let's assume term plan is around $800/yr for same sum assured.

Year 1
ILP cash value: $100
Premiums grow at 9%: $2,616
Effect of deductions: $2,616 - $100 = $2,516

BTIR "cash value": $1,520 (5% charges)
"Premiums" grow at 9%: $2,616 (inclusive of term plan's premiums)
Effect of deductions: $2,616 - $1,520 = $1,096

$1,096 < $2,516 -> Simple mathematics.

Every year on after that will just see the difference between effect of deductions grow further and further apart because $100 compounded at 9% will always be smaller than $1,520 compounded at 9%. The effect of deductions for ILP is HIGHER than BTIR. Don't lie about effect of deductions being the same. Distribution costs form a significant part of "deductions", so don't pretend you are drawing a higher commission without any effect to the policyholder. Unconscionable.

Yawn~ k lar. Since you all want quotation I will quote but without pictures. You can get it from me at my office if you want.

Assume: ANB 24yo Male, Non-smoker + ROI 9%.
ILP $3,600 per year @ 612,000 Death/TPD.
vs
Term $1,601.91 per year @ 612,000 Death/TPD + Investment in ILP Funds at $2000 per year
*The 110% death benefit won't give you more sum assured if you units gain is more than 110% of your total recurring premium

At Age 55yo, 41 years later:

ILP gives $612,000 Death Benefit + $275,500 Cash value.
BTIR gives: $612,000 Death Benefit + $225,900 Cash value.


Let's Assume another one: ANB 55yo Male, Non-smoker + ROI 9%.
ILP $3,600 per year @ 111,500 Death/TPD.
vs
Term $1,261.07 @ 111,500 Death/TPD + Investment in ILP Funds at $2340 per year

At Age 65yo, 10 years later:
ILP gives $111,500 Death Benefit + $22,600 Cash Value.
BTIR gives you $111,500 Death Benefit + $33,800 Cash Value.


My conclusion is ILP is good for young people.
Btw, you have to compare apple to apple. I've used products from my company with same investment and sales charges for the ILP funds. One can go on to ETFs and other sources to get better returns But for customer convenience, assume he/she only get products from me which the only investments are unit trust and ILP funds.

And 1 more thing to highlight, riders is what differentiate your entire portfolio from BTIR solution.
Do you know I can add very cheap rider call Crisis Waiver from Prudential to waived off ALL FUTURE premiums upon CI? If I were to do it the BTIR way, I can only waive the term premium and not the investment part if it is not combined into 1 plan.

And there are riders such as disability income which gives you 10% of your disability sum assured every year till 65yo.
So imagine I purchase a 100k policy and this rider and strike disability the next day due to accident. I receive 100k + 10k * 40yrs (assuming i'm 24yo now) = 500k disability payout. And this rider is SO CHEAP.

Can BTIR waive any investment premium? No.


Don't cock-and-bull about "convenience". Still keeping to your pretense that BTIR is difficult. You think someone will wake up one day and say, wah I got to buy ILP? No - ILPs are promoted and sold, not bought. Laymen will know about the generic concepts of insurance, but they will not know of ILP until some salesperson goes up to them and trumpet the merits of it.

Explained to you the technical aspect and the benefit of riders such as waiver of future premiums that BTIR will not enjoy.


Your analogy is also a red herring, but I'll humour you. BTIR versus ILP is not investment plans versus savings account. It's a 1% 1-year fixed deposit vs a 0.5% 1-year fixed deposit. Even the elderly will know better than to put in the 0.5% one IF they were informed of the 1%. You're just the salesman who will tell them "Auntie this 0.5% Fixed Deposit is good!" without telling them about the 1% one and then saying that they prefer lower interest rates and that too much interest is too inconvenient for them.

Already explained to you ILP is the 1% for young people but 0.5% for old people.


It's the most transparent insurance cash value product, yes. Cream of the crap. Still useless. The transparency means nothing to the layman because it is transparent but it is technical. I can say that Linux source code is open and transparent. Does that mean the layman without programming skills is able to take the source code and come up with his own Linux distribution bundle?

Already explained above the benefit of riders. Obviously you do not know your product info well and don't 100% believe in insurance.

Clearly you have difficulty calculating because you have falsely mentioned that effect of deductions is the same as BTIR.[/QUOTE]

Calculated for you already. I was just lazy to show since you guys are not my clients - what for? But have shown u so stop complaining from now.

 

[xiaoevil]

I believe with the calculations and all the things you guys asked for. All of you can find the reply from my above reply to HandsTied on the benefits of riders on ILP/WL vs BTIR.

Lazy to reply all.

 

[iAdvisor]

I believe with the calculations and all the things you guys asked for. All of you can find the reply from my above reply to HandsTied on the benefits of riders on ILP/WL vs BTIR.

Lazy to reply all.

You have point out some of the pitfal I feel about BTIR, but advantage of having insurance should be with WLP and not ILP. And also, please do not put 'ILP/WLP' as they are not the same. Its misleading as this 2 product is cater to 2 very different need.

Your project with ILP vs term + investment, I think its crap.
3600 for 600k++, you are allocating a large amount of amount into the protection and not investment, at 55 (should be 31 not 41 yrs) its questionable if can achieve the mention cash value.

For the term plan, i guess you are using term for life, you should be using term till 55 or 60. the cost should be around 4 times lesser. But if u already base on 55/60, then again, just expensive product. Even at 2000 yearly for 31years, compunded at 9%pa, should also be 299150.43.

And lastly, i do not know how you prep to plan for a youngster without proper protection to go for ILP. As I have pointed out, many chances that you will be stuck in situation not being able to reduce the coverage. I do not know how are you going to live on, and serve others... I seen so many of my client who bought into ILP and developed medical condition and become a hard decision whether to reduce coverage or terminate the plan. both way will not benefit the client... think hard again...

 

[HandsTied]

HandsTied wrote:
There are many riders such as early stage CI, CI, and other riders. But I shall illustrate on CI coverage. If one starts BTIR at 50yo, will he reach self-insured by 65? Does the investment portion keep up to the term insurance in such a short period? Without a WL or ILP plan, your CI can only carry you to 70yo or some companies allowed up to later age - I don't know, but the problem is term don't provide WL coverage. My question is, is BTIR applicable to anyone at all stages of life? The insurance industry has limitation on Term insurance. I know that there are those Whole Life term for High Net worth but CI rider cannot be added on to it. You can say this is the product gap or because insurance companies want to make money. Hey, they are not charity business. If you want to fault them, there are many business that you can fault too.

Let me be clear we are talking about ILP VS BTIR and how BTIR is superior to ILP. Is your ILP suitable for the 50-year-old? No. Is BTIR suitable if one starts at 50? This is debatable as there are term plans that can cover him for the next 25 years which can be sufficient time, but let's just assume it's no. He would probably be better off with a whole life policy. This does not detract from the fact that BTIR is superior to ILP

But before one reaches self-insured, you do need the riders such as CI, Disability income, waiver of premium on CI, etc.

That is what the term policy is for.

Agree, but it is very hard to use BTIR for the older group because WL Limited payment is just a little bit more over term insurance but covers for life.

We can debate whether BTIR is suitable for older group, but let's assume it's not. Is ILP suitable? Also no. Use WL Limited then. Does this detract from the fact that BTIR is superior to ILP? No.

Income replacement need is practically zero only when proper retirement planning has been done and fulfilled.
And at many times, budget is a constraint. BTIR will give me the death benefit amount but I still need more coverage from now till after 65 or even 70, where the term cannot cover me anymore. Even with money I gained from BTIR, I cannot purchase more insurance at such old age. Insurance is leveraged dollar which the market do not provide term beyond a certain age.

And are you saying that ILP can give that coverage after 65 or even 70? No. It is not meant to be kept in older age.

The money gained from BTIR is meant for self-insurance. Why would one need to purchase insurance if he is financially ready to absorb such risks? Even if you insist coverage is important after one has amassed a sum of money and has retired, ILP is unsuitable for this regard.

Let me show you what's the stand I take through your analogy:
This is a "doctor" who has Pill A and B to prescribe to patients[/COLOR]with different medical conditions background. A has the most side-effects and earns the most money for the doctorbut is best suitable for patients with medical conditions. B has lower side-effects but earns very little money for the doctor but is suitable for patients with no medical conditions.

Whatever you want to say, ILP is a term plus investments (purpose: provide coverage and investments) plus unnecessary charges (side effects). BTIR is term plus investments (purpose: provide coverage and investments) with standard charges.

This is totally off the point I'm trying to show.

I'm sure.

Yawn~ k lar. Since you all want quotation I will quote but without pictures. You can get it from me at my office if you want.

Assume: ANB 24yo Male, Non-smoker + ROI 9%.
ILP $3,600 per year @ 612,000 Death/TPD.
vs
Term $1,601.91 per year @ 612,000 Death/TPD + Investment in ILP Funds at $2000 per year
*The 110% death benefit won't give you more sum assured if you units gain is more than 110% of your total recurring premium

At Age 55yo, 41 years later:

ILP gives $612,000 Death Benefit + $275,500 Cash value.
BTIR gives: $612,000 Death Benefit + $225,900 Cash value.


Let's Assume another one: ANB 55yo Male, Non-smoker + ROI 9%.
ILP $3,600 per year @ 111,500 Death/TPD.
vs
Term $1,261.07 @ 111,500 Death/TPD + Investment in ILP Funds at $2340 per year

At Age 65yo, 10 years later:
ILP gives $111,500 Death Benefit + $22,600 Cash Value.
BTIR gives you $111,500 Death Benefit + $33,800 Cash Value.


My conclusion is ILP is good for young people.
Btw, you have to compare apple to apple. I've used products from my company with same investment and sales charges for the ILP funds. One can go on to ETFs and other sources to get better returns But for customer convenience, assume he/she only get products from me which the only investments are unit trust and ILP funds.

Thanks for showing everyone that you are unable to do proper BTIR. Your term plan is crazy expensive! Poisoned apple to poisoned apple comparison indeed. A client meeting you is really damn convenient - some may say that too much money is a worrisome affair and you have helped your clients lighten their burdens by lightening their wallets! It's something that I have just recently said, some term plans are really lousy.

A non-tied agent at least is able to offer a cost-effective term plan and unit trusts to his clients with the same convenience.

And 1 more thing to highlight, riders is what differentiate your entire portfolio from BTIR solution.
Do you know I can add very cheap rider call Crisis Waiver from Prudential to waived off ALL FUTURE premiums upon CI? If I were to do it the BTIR way, I can only waive the term premium and not the investment part if it is not combined into 1 plan.

Crisis Waiver is just a repackaged form of term policy now used to "insure your premiums". One can use decreasing term insurance to the same effect except the payout is in lump sum. Waivering off investment costs is another gimmick "feature" that has to be paid for anyway. A proper BTIR strategy will net the insured much better payout that obviates the need for the continued RSP investments.

And there are riders such as disability income which gives you 10% of your disability sum assured every year till 65yo.
So imagine I purchase a 100k policy and this rider and strike disability the next day due to accident. I receive 100k + 10k * 40yrs (assuming i'm 24yo now) = 500k disability payout. And this rider is SO CHEAP.

It is misrepresentation to label this rider as Disability Income. Disability Income is a definition for a certain type of product that only two companies currently carry. You obviously do not know about this, otherwise you will not be bragging about your rider. This has been elaborated before (either in this forum or sgfunds).

In any case, this rider expires after a certain age, so what is your point?

Can BTIR waive any investment premium? No.

Rightfully so, thus saving the premium cost for a risk that does not need to be hedged away.

Explained to you the technical aspect and the benefit of riders such as waiver of future premiums that BTIR will not enjoy.

The benefits that the salesperson will enjoy by promoting such unnecessary riders? I know the joy of having a lot more upfront commissions la.

Already explained to you ILP is the 1% for young people but 0.5% for old people.

Oh yeah, thanks for the explanation that either way, be it ILP or BTIR with you, your client is shortchanged.

Already explained above the benefit of riders. Obviously you do not know your product info well and don't 100% believe in insurance.

Let me see - there is someone who thinks that financial advisers cannot give financial advice on investments, someone who naively thinks that whatever his Principal says is the only thing in the market, someone who thinks that his disability rider is Disability Income Insurance, and someone who trumpets the necessity of unnecessary/inconsequential riders like premium waiver.

I believe 100% in insurance that benefits the insured practically.

Calculated for you already. I was just lazy to show since you guys are not my clients - what for? But have shown u so stop complaining from now.

No la be your client what for? Be shortchanged and give you my money and be underinsured for it? No thanks.

 

[jack81]

To xiaoevil: Can you please clarify on the below?

True, provided one has the time to manage his investment regularly. Survey studies have shown that majority of the consumers do not remember what they purchased after a year for long term products like insurance, investment and savings. Majority of my clients just want the convenience of someone that would be monitoring their entire financial portfolio regularly and this person is from some reputable stable company - namely the Big 4 (Prudential, Great Easter, AIA & NTUC Income)

不讲还可以，一讲就生气... Big 4..... What's the big deal about this?

Do you mean that other agents from the other companies other then your so called Big 4 are less competent?

I'm not putting words in your mouth or statement or watever. I'm outright asking you to clarify it. Simple.

Remember Ms Theresa Tan? I provide the link for you -- http://health.asiaone.com/Health/News/Story/A1Story20100831-234887.html

She had 3 policies with Prudential but her claim for DCIS was rejected. Funny thing was her family's medical history was made known to her agents. Agents from Prudential.

So tell me, if according to you agents from your so called Big 4 (some reputable stable company) are like the above.. i'm glad I'm from a small company.

 

[xiaoevil]

iAdvisor wrote:

You have point out some of the pitfal I feel about BTIR, but advantage of having insurance should be with WLP and not ILP. And also, please do not put 'ILP/WLP' as they are not the same. Its misleading as this 2 product is cater to 2 very different need.

I putting ILP/WL together to compare against BTIR in terms of the riders and extensive cover it offers compared to BTIR. Of course WL would be better for a TRUE whole life coverage.

Your project with ILP vs term + investment, I think its crap.
3600 for 600k++, you are allocating a large amount of amount into the protection and not investment, at 55 (should be 31 not 41 yrs) its questionable if can achieve the mention cash value.

It is not crap because I removed all riders for both ILP and term, just the very basic Death/TPD benefit.
The investment is both the same funds and same projection but in different products. It is based on 55yo, which is 31years later. Sorry for the typo. But the values still stand.

For the term plan, i guess you are using term for life, you should be using term till 55 or 60. the cost should be around 4 times lesser. But if u already base on 55/60, then again, just expensive product. Even at 2000 yearly for 31years, compunded at 9%pa, should also be 299150.43.
the term i used will expires at age 65. the figures that i've provided are all assumed at 9% ROI AFTER charges.


And lastly, i do not know how you prep to plan for a youngster without proper protection to go for ILP. As I have pointed out, many chances that you will be stuck in situation not being able to reduce the coverage. I do not know how are you going to live on, and serve others... I seen so many of my client who bought into ILP and developed medical condition and become a hard decision whether to reduce coverage or terminate the plan. both way will not benefit the client... think hard again...[/QUOTE]

What kind of medical conditions are you referring to? This policy is meant for a few purposes only. If you develop conditions not covered in any insurance products on market, you have to use emergency funds. If you get retrenched, you have to use emergency funds. If you this If you that, insurance don't cover everything but it transfer some of your risk to insurance companies.If you clients are not aware of the limitations of the portfolio he has, please warn him. I have always highlighted the very important limitations of insurance products and this has been made compulsory this year by MAS. Please check with your company what is needed to be disclosed. I do not need to wait for MAS to tell me what to do and I'm already doing it.

 

[xiaoevil]

To xiaoevil: Can you please clarify on the below?




不讲还可以，一讲就生气... Big 4..... What's the big deal about this?

Do you mean that other agents from the other companies other then your so called Big 4 are less competent?

I'm not putting words in your mouth or statement or watever. I'm outright asking you to clarify it. Simple.

Remember Ms Theresa Tan? I provide the link for you -- http://health.asiaone.com/Health/News/Story/A1Story20100831-234887.html

She had 3 policies with Prudential but her claim for DCIS was rejected. Funny thing was her family's medical history was made known to her agents. Agents from Prudential.

So tell me, if according to you agents from your so called Big 4 (some reputable stable company) are like the above.. i'm glad I'm from a small company.

I do not mean other agents are less competent but it is unlikely you will see one day these big 4 companies (who owns in combination about 70% of the market share) to tell you - Sorry, I am going to discontinued the entire line of Hospitalisation product. Go find someone else to insure you.

For Theresa case, it just plain complacency on the client and negligence of the agent. Period.

 

[xiaoevil]

HandsTied wrote:

Let me be clear we are talking about ILP VS BTIR and how BTIR is superior to ILP. Is your ILP suitable for the 50-year-old? No. Is BTIR suitable if one starts at 50? This is debatable as there are term plans that can cover him for the next 25 years which can be sufficient time, but let's just assume it's no. He would probably be better off with a whole life policy. This does not detract from the fact that BTIR is superior to ILP

That is what the term policy is for.

We can debate whether BTIR is suitable for older group, but let's assume it's not. Is ILP suitable? Also no. Use WL Limited then. Does this detract from the fact that BTIR is superior to ILP? No.

I have not mentioned any strategy to be superior in all situations. If there is one strategy that can be constantly applied to all situations, then this product can be purchased off the shelves, no need for consultant.

And are you saying that ILP can give that coverage after 65 or even 70? No. It is not meant to be kept in older age.

I've already said ILP to be covered until 55yo with reducing sum assured before 55.

The money gained from BTIR is meant for self-insurance. Why would one need to purchase insurance if he is financially ready to absorb such risks? Even if you insist coverage is important after one has amassed a sum of money and has retired, ILP is unsuitable for this regard.

Whatever you want to say, ILP is a term plus investments (purpose: provide coverage and investments) plus unnecessary charges (side effects). BTIR is term plus investments (purpose: provide coverage and investments) with standard charges.

I'm sure.

Thanks for showing everyone that you are unable to do proper BTIR. Your term plan is crazy expensive! Poisoned apple to poisoned apple comparison indeed. A client meeting you is really damn convenient - some may say that too much money is a worrisome affair and you have helped your clients lighten their burdens by lightening their wallets! It's something that I have just recently said, some term plans are really lousy.

I think you just can't comprehend the whole calculation I've done. The figures may be expensive compared to other companies but I'm not comparing company A way of BTIR to company B of ILP. I have taken products only from 1 company to make a fair illustration.

A non-tied agent at least is able to offer a cost-effective term plan and unit trusts to his clients with the same convenience.

A true convenience won't even be a non-tied agent but one who is a broker and a planner.

Crisis Waiver is just a repackaged form of term policy now used to "insure your premiums". One can use decreasing term insurance to the same effect except the payout is in lump sum. Waivering off investment costs is another gimmick "feature" that has to be paid for anyway. A proper BTIR strategy will net the insured much better payout that obviates the need for the continued RSP investments.

So are you saying if I'm getting a $3600/year ILP and I'm diagnosed with CI the next year and waived my premium my entire life, with me adjusting the sum assured of Death/TPD to zero at age 55 - the total premium of I should be paying from now (now 24yo) to my retirement (65yo) is $144,000, and with the Cash Value in the ILP is actually less than the amount I get from BTIR?

It is misrepresentation to label this rider as Disability Income. Disability Income is a definition for a certain type of product that only two companies currently carry. You obviously do not know about this, otherwise you will not be bragging about your rider. This has been elaborated before (either in this forum or sgfunds).

Disability Income to what I was referring to carries the same definition as TPD benefit. If you are referring to reduced in quality of life or temporary disability for an insurance payout - don't worry, more companies will be offering that soon. The disability income i was referring to was to increase your TPD benefit in a cheaper way when budget is a constraint.

In any case, this rider expires after a certain age, so what is your point?

TPD and this rider both expires at age 65, same for all insurance companies. even term. What matters is the CI coverage that can continue for life but terminated due to the term plan max age attained.


Rightfully so, thus saving the premium cost for a risk that does not need to be hedged away.

Go calculate the increase in premium of crisis waiver between term and ILP and this increment, which waive off your need to invest in a crisis, is not benefiting to customers. You are asking someone who is diagnosed with CI to continue investing, even after 1 year from purchased of BTIR.

The benefits that the salesperson will enjoy by promoting such unnecessary riders? I know the joy of having a lot more upfront commissions la.

Unnecessary? I think not. A lot of commission from these riders? No, WL and basic ILP i earn more. Why ask my clients put riders? Just get basic, got money then keep increasing the premium for the basic coverage la. That would earn me the most commission but that's not what i'm doing.


Oh yeah, thanks for the explanation that either way, be it ILP or BTIR with you, your client is shortchanged.

I will not even recommend BTIR to my clients. If my clients insist on ILP and goes to you, you probably screw their lives with no riders added.

Let me see - there is someone who thinks that financial advisers cannot give financial advice on investments, someone who naively thinks that whatever his Principal says is the only thing in the market, someone who thinks that his disability rider is Disability Income Insurance, and someone who trumpets the necessity of unnecessary/inconsequential riders like premium waiver.

I believe 100% in insurance that benefits the insured practically.

K, plan for your clients this way. My way suits common people. Your way suit, well.. just yourself.

No la be your client what for? Be shortchanged and give you my money and be underinsured for it? No thanks.[/QUOTE]

I won't be taking you either.

 

[Rommie2k6]

If by "better", you are solely referring to the R.O.I. of BTIR then I do agree with you. Of course one would save a lot if there are lesser middleman (such as financial consultants and brokers). You can even choose to invest on SGX through online banking, with DBS it's only as little as $18 per small transaction. However, there are still many who wish to have an agent. And like buying anything else, you should know engaging a consultant means you need to pay for the service. Unfortunately for you, insurance products are designed in such a way that whether or not you engage a consultant's advice, you have to pay for the distribution charges. Deciding for yourself what to purchase for insurance products will not help you to save money. I will elaborate on ILP below.

For the case of conservative BTIR vs WL, I never said the ROI was better. I said it was a 50-50 shot because the returns are same within a reasonable uncertainty level. My push for BTIR nevertheless, so to speak is because of ease of self-insurance, transparency and easy-to-understand compared to ILP.

If you have actually generated the benefit illustration of Term + Unit Trust vs ILP for say a guy age 20, non-smoker, You would realised that the ILP give higher sum assured but at the expense for lower investment returns for the same premium amount.... etc

And if I get a yearly renewable Term, I would also have the same low-cost insurance premium... I thought I've went through this before?

I have always recommended ILP for the younger group if their decision is to get an endowment plan, because even with the high charges, ILP offers potentially higher returns even after the charges, and higher protection. My advise has been constantly telling them to start reducing ILP's sum assured after 40yo as their liabilities decreases, down to zero (if they have no dependents to support) at age 55. Continue to service the policy until retirement age (e.g. 65yo) then do partial withdrawal while continuing investing the rest of the cash in the ILP. You would notice by this strategy, after age 55, there are no longer any assurance charges, only investment and sales charge of the units. and because of the 5% bonus in ILP after the 10th year, during this 55-65 yo period, they are actually not paying a lot of charges compared to those ILP (with 110% death benefit).

First problem... why you encourage your clients to lose their CI coverage at old age *when they need it the most*? Seriously... what kind of advice is that?

The model you described can also be replicated with BTIR using a decreasing-sum term insurance + investing the rest. Again... we come back to square one. BTIR can do whatever your ILP can but better at a lower cost!

APL = Auto Premium Loan, commonly referred to as Premium Holiday which Term policy do not carry. Should one get retrenched or hit a financial crisis in his life, he cannot stop paying premium or looses his term coverage. WL and ILP on the other hand allow you to do that by eating into the cash value. Yes, you may say the client can use the value in BTIR to finance the term premium. But the problem is what is that 30 days grace period is actually very short. Due to unforeseen circumstances, client may take more than 30 days to realise he haven't really paid for his term policy. By then it may be too late to reinstate it...

Not this premium holiday BS. Firstly, the risks of not paying premium is exaggerated with proper financial planning. That's what emergency fund is for, and also factor in insurance premium into emergency fund and treat it as a base necessary expense like food. Secondly, I can also do premium holiday on BTIR where I sell off part of my portfolio to raise money needed for insurance premium. Lastly, client forgetting to pay premium is another excuse you agents like to use to instill fear in consumers. Have you heard of GIRO? And how hard is it to check that premium has been payed and cleared ONCE per year?

This is why I always recommend limited pay WL policy first. But for a 20yo male, non-smoker. He has higher sum assured and potential higher returns compared to WL policy in the initial stage. E.g., I need to spend $150 for a 100k WL policy but only $100 for a 100k ILP (this is not to exact figure). The shortfall in insurance can then be complimented by a 10-20yrs term to exercise conversion over to WL/ILP in later stage.

If you are saying you sell something like $50k WL and $250k Term to your clients, then I admit it is "not so bad". However, I recall some comments on Prudential having expensive term plans.

You can check with Mercer lar, I'm still researching on it as compared to what I have been doing. But definitely it is good for those clients whose agents randomly pick a fund to recommend.

Gosh... if you can't even design a simple portfolio then I wonder what kind of training Prudential has provided (besides teaching how to sell). I remember seeing an email in my inbox about a 30-day "internship" at Prudential after which the interns become licensed Prudential agents. Now I regret not going for the fun of it to see what kind of training they provide...

IFA can sell unit trust, basically anybody with M8 can sell pure unit trust (those that don't even have 110% death benefit). But out of the company's selection of funds, consultants are not allowed to give recommendation of which funds to invest for the client or how much % to each fund.

Let's see so now you admit that IFA can sell unit trust, but they cannot give recommendation. What kind of BS regulation is this? Is this true?

 

[Rommie2k6]

Yawn~ k lar. Since you all want quotation I will quote but without pictures. You can get it from me at my office if you want.

Assume: ANB 24yo Male, Non-smoker + ROI 9%.
ILP $3,600 per year @ 612,000 Death/TPD.
vs
Term $1,601.91 per year @ 612,000 Death/TPD + Investment in ILP Funds at $2000 per year
*The 110% death benefit won't give you more sum assured if you units gain is more than 110% of your total recurring premium

At Age 55yo, 41 years later:

ILP gives $612,000 Death Benefit + $275,500 Cash value.
BTIR gives: $612,000 Death Benefit + $225,900 Cash value.


Let's Assume another one: ANB 55yo Male, Non-smoker + ROI 9%.
ILP $3,600 per year @ 111,500 Death/TPD.
vs
Term $1,261.07 @ 111,500 Death/TPD + Investment in ILP Funds at $2340 per year

At Age 65yo, 10 years later:
ILP gives $111,500 Death Benefit + $22,600 Cash Value.
BTIR gives you $111,500 Death Benefit + $33,800 Cash Value.

I believe HandsTied already said you are quoting an expensive Term plan, which incidentally provides a good lesson to learn here. I've also noticed your Term plan (no CI) for the 1st example is $266/yr per $100k sum insured. In comparison, the quote I have for myself (also similar statistics) is $150/yr per $100k sum insured for an Aviva Term plan. For effective BTIR, one needs to source for the more competitive term policies and more competitive investment products. It is true that if you buy an expensive term plan and invest in high-expense ILP, you will fail.

The above BTIR plan is poorly constructed because:
1) BTIR involves using more competitive term plans like that from Aviva, AXA, NTUC.
2) Nobody will "ITR" in ILP-UT, instead more cost effective investment options like UT and ETF should be used. This would mean that if the ILP and BTIR are invested in the same stuff, we can expect BTIR returns to outperform ILP by ~1.0% due to the difference in expenses. This was not reflected in the above calculations.
3) Projections of 9% is unrealistically high.

And there are riders such as disability income which gives you 10% of your disability sum assured every year till 65yo.
So imagine I purchase a 100k policy and this rider and strike disability the next day due to accident. I receive 100k + 10k * 40yrs (assuming i'm 24yo now) = 500k disability payout. And this rider is SO CHEAP.

Oh please... use a proper disability income insurance instead of some half-baked rider. Btw, actual DI insurance is also VERY CHEAP (only slightly more than the cost of a Private Shield plan for young people). Standard DI insurance also payout 60-70% of last declared salary till age 65.

 

[xiaoevil]

Rommie2k6 wrote:

For the case of conservative BTIR vs WL, I never said the ROI was better. I said it was a 50-50 shot because the returns are same within a reasonable uncertainty level. My push for BTIR nevertheless, so to speak is because of ease of self-insurance, transparency and easy-to-understand compared to ILP.

I would agree with you that WL is not transparent but it is easier to understand than ILP or BTIR. transparency = more details = harder to understand for common consumers.

And if I get a yearly renewable Term, I would also have the same low-cost insurance premium... I thought I've went through this before?

If you get a yearly renewable term, you would achieve a even higher premium cost for long term coverage. It will be even more expensive than the one I calculated based on leveled term.

First problem... why you encourage your clients to lose their CI coverage at old age *when they need it the most*? Seriously... what kind of advice is that?

I believed I've said it many times that ILP is meant to compliment WL. It's like fixed wages (WL) + variable wages (ILP).

The model you described can also be replicated with BTIR using a decreasing-sum term insurance + investing the rest. Again... we come back to square one. BTIR can do whatever your ILP can but better at a lower cost!

You are creating way too many policies, and each policy you create it comes attached with high distribution cost. I earn lesser commission for premium waiver compared to decreasing term. Thanks for feeding my pocket.

Not this premium holiday BS. Firstly, the risks of not paying premium is exaggerated with proper financial planning. That's what emergency fund is for, and also factor in insurance premium into emergency fund and treat it as a base necessary expense like food. Secondly, I can also do premium holiday on BTIR where I sell off part of my portfolio to raise money needed for insurance premium. Lastly, client forgetting to pay premium is another excuse you agents like to use to instill fear in consumers. Have you heard of GIRO? And how hard is it to check that premium has been payed and cleared ONCE per year?

Are you serious about everything goes according to plan? What if the emergency savings run out to? Financial plan is a guideline, that's why it need to be regularly reviewed at least once a year. You are telling me that there is no chance of cash running out.
It is true that you ended up having many backup plan which lead to higher costs. So if anyone who strongly believe they do not need so many layer of protection, feel free to go on this BTIR.

If you are saying you sell something like $50k WL and $250k Term to your clients, then I admit it is "not so bad". However, I recall some comments on Prudential having expensive term plans.

My comparison of term + RSP-ILP vs WL-ILP are both based on Prudential rates. So even if the term is expensive compared to other companies, so is the rates in the WL-ILP, yet I have shown you the younger ppl benefit more on WL-ILP. If you are gonna bring in ETFs or other forms of investment then you CANNOT compare to ILP because you are comparing returns of a bonds to returns of an equity. That's not apple to apple comparison. Anybody smart enough should be able to see this.

Gosh... if you can't even design a simple portfolio then I wonder what kind of training Prudential has provided (besides teaching how to sell). I remember seeing an email in my inbox about a 30-day "internship" at Prudential after which the interns become licensed Prudential agents. Now I regret not going for the fun of it to see what kind of training they provide...

30 day or whatever Prudential train its agent, I have no comments. Do you seriously think my knowledge came only from Prudential?

Let's see so now you admit that IFA can sell unit trust, but they cannot give recommendation. What kind of BS regulation is this? Is this true?[/QUOTE]

There's a difference between an ILP fund and Unit Trust, one has 110% Death Benefit and one don't. To sell a pure unit trust, one would required to have M8. Anybody can take the exam for M8 - personal banker, tied agent or IFA. But none can advise which funds to invest into and how much to allocate to different funds. I believe this is the best explanation I've given for dummies.
And for the benefit of everyone, I will get an official reply for MAS and post at a later date.

 

[xiaoevil]

Rommie2k6 wrote:

I believe HandsTied already said you are quoting an expensive Term plan, which incidentally provides a good lesson to learn here. I've also noticed your Term plan (no CI) for the 1st example is $266/yr per $100k sum insured. In comparison, the quote I have for myself (also similar statistics) is $150/yr per $100k sum insured for an Aviva Term plan. For effective BTIR, one needs to source for the more competitive term policies and more competitive investment products. It is true that if you buy an expensive term plan and invest in high-expense ILP, you will fail.

The above BTIR plan is poorly constructed because:
1) BTIR involves using more competitive term plans like that from Aviva, AXA, NTUC.
2) Nobody will "ITR" in ILP-UT, instead more cost effective investment options like UT and ETF should be used. This would mean that if the ILP and BTIR are invested in the same stuff, we can expect BTIR returns to outperform ILP by ~1.0% due to the difference in expenses. This was not reflected in the above calculations.
3) Projections of 9% is unrealistically high.

If you are comparing ILP against BTIR that invest it other type of investment - it is clearly a wrong way to compare. You are telling people to obtain the list of shares in an ILP fund and invest into it on their own to minimise the charges for investment manager.

Oh please... use a proper disability income insurance instead of some half-baked rider. Btw, actual DI insurance is also VERY CHEAP (only slightly more than the cost of a Private Shield plan for young people). Standard DI insurance also payout 60-70% of last declared salary till age 65.

Yes it is also very cheap, and my point is not about cheap or comparing riders benefits. I realised you guys like to interpret my meaning differently. I was showing that there are riders that are cheap and benefit people a lot, and they can be added on for a life time. You are telling people to take away something that is $5-$10/mth, $60-$120/year, $3000-$6000/50years which can give you benefits a lot higher than this total premium, to throw into investment instead. If you have this mentality, you shouldn't even spend much on insurance.

And I'm talking about future value of your $5-$10/month. Do you know how small $6000 is 50 years later?

 

[Rommie2k6]

I would agree with you that WL is not transparent but it is easier to understand than ILP or BTIR. transparency = more details = harder to understand for common consumers.

I guess maybe for people like you a bit more details give you a headache eh? For many WL policy, you don't even know what the par fund is invested in because they don't release that information! How does a consumer make an informed judgment as to whether the projections can be realistically honored or is just plain BS? In BTIR everything is laid out on the table. That is why it is easier to understand.

If you get a yearly renewable term, you would achieve a even higher premium cost for long term coverage. It will be even more expensive than the one I calculated based on leveled term.

You were selling the fact that ILP is cheap for younger people, and that is because it is a yearly renewable term + investment in an expensive wrapper. Don't back away from your original claim, I am countering point for point.

I believed I've said it many times that ILP is meant to compliment WL. It's like fixed wages (WL) + variable wages (ILP).

Replace ILP with BTIR and I can come to an agreement that a small WL portion and a large BTIR portion may be suitable for some consumers. Especially those with financial "mental block" and have a fetish for guarantee. As I've said so many times, ILP has no place in one's portfolio.

You are creating way too many policies, and each policy you create it comes attached with high distribution cost. I earn lesser commission for premium waiver compared to decreasing term. Thanks for feeding my pocket.

When I refer to term plans it is always known that I am referring to the more competitive plans not bloated terms from Prudential. I am not creating policies out from thin air, term comes in many flavor - yearly-renewable term, level term, decreasing term. Don't you know that? Each one has a difference purpose and role, I only advocate level term because that in my opinion makes the most sense.

Are you serious about everything goes according to plan? What if the emergency savings run out to? Financial plan is a guideline, that's why it need to be regularly reviewed at least once a year. You are telling me that there is no chance of cash running out.
It is true that you ended up having many backup plan which lead to higher costs. So if anyone who strongly believe they do not need so many layer of protection, feel free to go on this BTIR.

Stop fear-mongering around again. No wonder you are such a good salesman. Don't you know anything about risk management AT ALL? Why are you fixed on the low probability that you will run out of emergency fund? If you're so damn kiasee... have a 3 year emergency fund. Cut spending when you are unemployed, and if that is still not enough liquidate parts of your investment portfolio to pay for the premium (only as a last resort).

Yes, I am saying that there is no chance for the cash to run out in the case of BTIR before ILP does. What your stupid premium holiday does is that it takes the investment portfolio, liquidate some of it to pay for premium. I can do the same for BTIR. Big deal!!!

My comparison of term + RSP-ILP vs WL-ILP are both based on Prudential rates. So even if the term is expensive compared to other companies, so is the rates in the WL-ILP, yet I have shown you the younger ppl benefit more on WL-ILP.

Total BS... there's totally no logic that if company X's term plan is expensive, so their WL plan must be expensive as well. I'm sure any IFA can back up this statement. TM Asia life is always touted to have the best WL policy, but do they offer the best term policy as well? Proper methodology is about comparing products of the same "standard", so you compare the best term vs best WL, not term and WL from the same company.

FYI, my example for NTUC is justified because I know for a fact that NTUC term and WL policy are "average", so my basis is NOT same company but rather same level of competitiveness across its class.

If you are gonna bring in ETFs or other forms of investment then you CANNOT compare to ILP because you are comparing returns of a bonds to returns of an equity. That's not apple to apple comparison. Anybody smart enough should be able to see this.

Don't you know there are bond ETFs also? Don't you know ETF and UT can invest in pure bonds, pure stocks or anything in between just like your ILP-funds can? Come on man... and you are label yourself as a financial adviser?

30 day or whatever Prudential train its agent, I have no comments. Do you seriously think my knowledge came only from Prudential?

Maybe not. But whoever or whatever that has done your training sure did a terrible job.

There's a difference between an ILP fund and Unit Trust, one has 110% Death Benefit and one don't.

Big deal with the +10% death benefit. You can get +14% returns in 2 years time with an aggressive ITR portfolio. If you want a safety of statistics, just do a calculation with some figures about the stdev of expected returns.

To simply stuff for you, the +10% death benefit is going to be increasingly irrelevant as time passes, since the ITR component would have an increasing probability of having exceeded +10% returns.

AND This is what you wrote:

*The 110% death benefit won't give you more sum assured if you units gain is more than 110% of your total recurring premium

Ah hah! Caveat empor eh? Does this mean that when I die with an ILP and my entire portfolio is 140% of the total premium paid, my beneficiaries will only get back 110%???? Please clarify...

 

[Rommie2k6]

If you are comparing ILP against BTIR that invest it other type of investment - it is clearly a wrong way to compare. You are telling people to obtain the list of shares in an ILP fund and invest into it on their own to minimise the charges for investment manager.

I think after so many posts, you still either don't understand or choose to misrepresent what BTIR is.
The point is whatever you invest in your ILP-fund, I am confident and pretty sure I can find a cheaper non-Prudential alternative either in the form of UT or ETF. So for e.g. if your client is invested in some Prudential Singapore Equity Fund, I can use STI ETF which has probably has a 1%+ lower expense ratio than your prudential fund. This means that over time, I will earn +1% more than the person who holds that Prudential Singapore Equity fund.

Note that I am not just talking about the fund expense ratio. I haven't even added the other hidden charges of ILP.

Yes it is also very cheap, and my point is not about cheap or comparing riders benefits. I realised you guys like to interpret my meaning differently. I was showing that there are riders that are cheap and benefit people a lot, and they can be added on for a life time. You are telling people to take away something that is $5-$10/mth, $60-$120/year, $3000-$6000/50years which can give you benefits a lot higher than this total premium, to throw into investment instead. If you have this mentality, you shouldn't even spend much on insurance.

And I'm talking about future value of your $5-$10/month. Do you know how small $6000 is 50 years later?

Standalone DI premium is also in the region of what you quoted for your DI rider, but to make a true comparison:
1) What is the sum insured for your DI rider? How much % of the income does it replace?
2) Under what condition can one claim from your DI rider? Standalone DI policy uses own-occupation definition. Does your DI rider use that definition or the traditional "disabled" definition?
3) Is the DI rider tied to the main plan (i.e. if main plan terminates or reaches zero cash value is it still in force)? Another reason to have separate insurance policy is that IF you ever come to the situation whereby you really have no money, at least you can pick and choose what policy to terminate.

Please clarify... my guess is that Prudential DI rider is nothing but some patchwork half-past-six DI policy. I might be wrong, so please clarify the above pts.

 

[xiaoevil]

Rommie2k6 wrote:

I guess maybe for people like you a bit more details give you a headache eh? For many WL policy, you don't even know what the par fund is invested in because they don't release that information! How does a consumer make an informed judgment as to whether the projections can be realistically honored or is just plain BS? In BTIR everything is laid out on the table. That is why it is easier to understand.

Ya, ILP and WL is not for people like you. It's for people like me who is lazy. Many lazy people out there who do not want to read through the entire policy documents. They just want to know the end result that they are covered for life. You can bring in back the argument of SGS bonds, etc. Try selling this concept to the general public, and you would get what I mean.

You were selling the fact that ILP is cheap for younger people, and that is because it is a yearly renewable term + investment in an expensive wrapper. Don't back away from your original claim, I am countering point for point.

What original point? I've been saying ILP is suitable for younger people who has budget constraint. And because I'm talking to people who are not financially equipped to even know the difference between term/WL/Endowment/ILP, you seriously expecting me to teach them BTIR - something that is not even a product offered in the market by itself? You are expecting all consultants to actually plan BTIR for some young working adult or even students for that matter, who have completely no idea when they want to retire or when they want to get married. How can I determine their retirement age to purchase the right term contract period for them? If I set it at 65, what if they want to retire earlier or later? ILP gives one the flexibility to change his/her financial goals at ANYTIME. Many times, financial consultants are not able to extract key information from the client to determined the amount of premium going into each policy. There is a based, a foundation for 100k WL policy. because 100k is too little to go wrong. The next 100k-300k can be on ILP or even short contract term IF the client do not want any cash value.

Replace ILP with BTIR and I can come to an agreement that a small WL portion and a large BTIR portion may be suitable for some consumers. Especially those with financial "mental block" and have a fetish for guarantee. As I've said so many times, ILP has no place in one's portfolio.

ILP has no place in you.

When I refer to term plans it is always known that I am referring to the more competitive plans not bloated terms from Prudential. I am not creating policies out from thin air, term comes in many flavor - yearly-renewable term, level term, decreasing term. Don't you know that? Each one has a difference purpose and role, I only advocate level term because that in my opinion makes the most sense.

Level term or renewable term really depends on situation. There's no such thing as what makes most sense. And in fact, you should be getting SP term which would be even better than RP term. More savings!

Stop fear-mongering around again. No wonder you are such a good salesman. Don't you know anything about risk management AT ALL? Why are you fixed on the low probability that you will run out of emergency fund? If you're so damn kiasee... have a 3 year emergency fund. Cut spending when you are unemployed, and if that is still not enough liquidate parts of your investment portfolio to pay for the premium (only as a last resort).

What's more feasible for general consumers? Pay a little each time or setup a 3 year emergency fund? You have no idea what's the priority in the minds of consumers. You think everybody like you prioritise investment and insurance as no.1? Do you know that there are many who rather spend their money on branded stuff than to upgrade their investment portfolio or even insurance if they need more.

Yes, I am saying that there is no chance for the cash to run out in the case of BTIR before ILP does. What your stupid premium holiday does is that it takes the investment portfolio, liquidate some of it to pay for premium. I can do the same for BTIR. Big deal!!!

The Big deal is you are playing on the concept that everyone thinks LIKE YOU. BTIR works well in theory but it is not practical.

Total BS... there's totally no logic that if company X's term plan is expensive, so their WL plan must be expensive as well. I'm sure any IFA can back up this statement. TM Asia life is always touted to have the best WL policy, but do they offer the best term policy as well? Proper methodology is about comparing products of the same "standard", so you compare the best term vs best WL, not term and WL from the same company.

You can take the charges of Prudential's ILP and multiply the rates against the sum assured then. Go request from PruCustomer Line.
And general consumer, unlike you, not so much into details. If everyone so detailed like you, you will never see complain in claims. If you really want to compare, you should compare the entire sales experience until claim is made. There are reasons why similar products are priced differently.

FYI, my example for NTUC is justified because I know for a fact that NTUC term and WL policy are "average", so my basis is NOT same company but rather same level of competitiveness across its class.

Then why don't you do a comparison for the best BTIR against the best ILP (however much you hate ILP). And please use ILP funds and not ETFs or other investments in BTIR. Because if one wants to invest something else, then he shouldn't even bother asking about WL or ILP. I can simply offer a WL term to him, if his affordability is there.

Don't you know there are bond ETFs also? Don't you know ETF and UT can invest in pure bonds, pure stocks or anything in between just like your ILP-funds can? Come on man... and you are label yourself as a financial adviser?

The charges are different to give a fair comparison. Come on come on, sorry ah - you want to compare, you should take similar product inside and outside, not just the inside. The whole product structure of ILP funds and UT or ETFs is totally different even if you want to make the inside the same.
You are comparing the same furniture set in a Condo to putting the same furniture set in a 5Rm flat - Same floor size you know, same furniture and interior design - But is it the same?

Maybe not. But whoever or whatever that has done your training sure did a terrible job.

Whoever trained you or wherever knowledge you gain from has made you a myopic person who lives in an ideal world.

Big deal with the +10% death benefit. You can get +14% returns in 2 years time with an aggressive ITR portfolio. If you want a safety of statistics, just do a calculation with some figures about the stdev of expected returns.

To simply stuff for you, the +10% death benefit is going to be increasingly irrelevant as time passes, since the ITR component would have an increasing probability of having exceeded +10% returns.

It is no big deal but it is capital guaranteed upon death even if the investment suffer a lost. If investment profited upon death, of course it is not worth it. But do you have a crystal ball to tell the future when one is going to die during investment lost or gain?

AND This is what you wrote:

*The 110% death benefit won't give you more sum assured if you units gain is more than 110% of your total recurring premium

Ah hah! Caveat empor eh? Does this mean that when I die with an ILP and my entire portfolio is 140% of the total premium paid, my beneficiaries will only get back 110%???? Please clarify...[/QUOTE]

It just means the death benefit is a higher of the value of the investment units or 110% of your total principle sum, which like I said... you never know when you gonna die during good times or bad times. If you don't want the guarantee, don't buy products that are insurance-based.