Yearly premium is $3025
1st year = 22% into investment
2nd year = 52% into investment
3rd year = 60% into investment
4th year = 100% into investment
Eating up your first few years of premiums is just one of the few ways that ILPs take money from you. Most ILPs also charge a sales charge (aka bid-offer spread), and/or annual platform fees. There is also a fund management fee that is charged internally within the fund. While all funds do have these fees that are usually around 1.5%, for most plans the insurance companies earn by making sure that you can only invest in a selected number of plans - all of which are managed by the insurance company themselves or one of its affiliates or subsidiaries.
The company M mentioned above gives you 100% allocation from year one (and an extra 15% for first year if you agree a 10 year lock in), so they make it all back from the other 3 types of fees, and charge you a penalty if you try to withdraw early.
This is before they deduct an annual mortality charge to cover for your life insurance. This charge grows exponentially as you grow older.
What if I tell you, that you can invest in the same or similar unit trusts. 100% placement every time. Buy as much or as little as you like each time, as often as you like. 0% sales charge. 0% platform fee. You do still have to pay the ongoing fund management fee, but you get to choose from a wide variety of funds from a wide variety of fund managers, and sometimes you can find good funds that have low management fees.
Or even better, instead of purchasing unit trusts, you can purchase ETFs. Usually these have small fees to purchase and to sell, but there are no platform fees and the ongoing fund management fees are much much lower.
So you've settled your investment, it's time to settle your insurance. You only need to get a term life insurance plan now, so sure you can speak to an insurance agent to purchase one. But wait! You can still save even more. If you qualify for Aviva MINDEF Group Term Life, this is the best term life insurance plan. If you don't, you can still head over to
http://comparefirst.sg and look for a Direct Purchase Insurance term life plan, which is cheaper than going through an agent.
