Should i cancel my ILP?

[pickupnoob]

I am currently 21 and doing my NS. I got my ILP from great eastern about 10 months ago before i enlisted. But now i thinking about cancelling my ILP as i am afraid i might not be able to pay the $168 premium after i ord when i am in university. And i find it stupid to work part time just to be able to pay for insurance premium.

And i also find it ridiculous that it will take more than 30 years for this policy to breakeven at a projected 4% investment returns. plus it is not every year will be 4%

i am considering to take a whole life plan with critical illness or use my SAF aviva insurance and use the rest of the money that is saved to invest instead.

since my great eastern ILP allocation rate for the premium is 20% for first year and it increases to 50%, 75% and 101% for the second year, third year and fouth to sixth year respectively, i expecting a total loss of premium so far which is at least $1680.

Any advice if i should cut loss and surrender or to continue the ILP since i am still young and have time on my side?

 

[akwl88]

I am currently 21 and doing my NS. I got my ILP from great eastern about 10 months ago before i enlisted. But now i thinking about cancelling my ILP as i am afraid i might not be able to pay the $168 premium after i ord when i am in university. And i find it stupid to work part time just to be able to pay for insurance premium.

And i also find it ridiculous that it will take more than 30 years for this policy to breakeven at a projected 4% investment returns. plus it is not every year will be 4%

i am considering to take a whole life plan with critical illness or use my SAF aviva insurance and use the rest of the money that is saved to invest instead.

since my great eastern ILP allocation rate for the premium is 20% for first year and it increases to 50%, 75% and 101% for the second year, third year and fouth to sixth year respectively, i expecting a total loss of premium so far which is at least $1680.

Any advice if i should cut loss and surrender or to continue the ILP since i am still young and have time on my side?

yes pls cancel fast

 

[anfielder]

If I were in this kind of situation I would cut loss immediately and take the losses as a course fee. I wish I could have learnt this lesson at your age!

Between a whole life plan and SAF GTL I wouldn't take either. I would go for a term plan to age 65 or 70 instead - that is probably cheaper than SAF GTL at your age - and invest the savings in ETFs. It may take a few months to accumulate enough $ to buy even 1 lot of STI ETF but that's fine.

 

[FP_IFA]

I am currently 21 and doing my NS. I got my ILP from great eastern about 10 months ago before i enlisted. But now i thinking about cancelling my ILP as i am afraid i might not be able to pay the $168 premium after i ord when i am in university. And i find it stupid to work part time just to be able to pay for insurance premium.

And i also find it ridiculous that it will take more than 30 years for this policy to breakeven at a projected 4% investment returns. plus it is not every year will be 4%

i am considering to take a whole life plan with critical illness or use my SAF aviva insurance and use the rest of the money that is saved to invest instead.

since my great eastern ILP allocation rate for the premium is 20% for first year and it increases to 50%, 75% and 101% for the second year, third year and fouth to sixth year respectively, i expecting a total loss of premium so far which is at least $1680.

Any advice if i should cut loss and surrender or to continue the ILP since i am still young and have time on my side?

If you can't afford the ILP, you will not be able to afford the whole life plan as well. Get a term plan first.

 

[Shion]

Just cut it. No point wasting your time and money into something like this.

 

[soneat]

Given the fact it's just 10months, cut is better. Remember don't buy back x years down the road.

 

[bakbear]

If can cut, just cut. Since you're ready to invest anyways. Better than get stuck with it after x years then by then want cut also cannot liao.

 

[ee-de-em-dubdew]

you bought from those FA before booking in?

 

[RetRace]

You must have bought from a looker. Only 1.6k. Terminate. I lost almost 7k from 2 ILP I cancelled after 3 years

Sent from Singapore using GAGT

 

[pickupnoob]

Sorry for MIA for awile. but thanks for the reply. after some research, I found out ILP is more of a long term plan which was why i bought it in the first place. And if you were to surrender after 3 years, definitely will make a loss.

I did a simple calculation and came out with a conclusion that at the age of 57, it wouldnt be worth it. but that is like 37 years from now and from what i see there is a long time for it to grow and at least breakeven (many online sources says it take at lesat 10-15 years to breakeven).

I am also wondering how do you calculate the returns since the my calculation is done at 4% returns per annum. My ILP is currently inside two funds, one is a dividend fund and another is not. So my only guess is that it is more of capital appreciation for both the non-dividend fund in which it is more of dollar cost averaging. That means if i want to surrender in the future, let say 20 years ago, i should surrender it when its booming.

So i am still thinking if i should surrender as the real investments start after the 3rd year and its more of a protection. Lastly, how true is it that you wont breakeven if you were to hold on for at least 20 years.

Thanks. and cheers!

 

[bibu00]

Sorry for MIA for awile. but thanks for the reply. after some research, I found out ILP is more of a long term plan which was why i bought it in the first place. And if you were to surrender after 3 years, definitely will make a loss.

I did a simple calculation and came out with a conclusion that at the age of 57, it wouldnt be worth it. but that is like 37 years from now and from what i see there is a long time for it to grow and at least breakeven (many online sources says it take at lesat 10-15 years to breakeven).

I am also wondering how do you calculate the returns since the my calculation is done at 4% returns per annum. My ILP is currently inside two funds, one is a dividend fund and another is not. So my only guess is that it is more of capital appreciation for both the non-dividend fund in which it is more of dollar cost averaging. That means if i want to surrender in the future, let say 20 years ago, i should surrender it when its booming.

So i am still thinking if i should surrender as the real investments start after the 3rd year and its more of a protection. Lastly, how true is it that you wont breakeven if you were to hold on for at least 20 years.

Thanks. and cheers!

Hey, let me put it this way for you, ilp is not a long term plan,it's a long term failure. I don't know which insurance agent you have been talking to, but your "research" is just terrible.

There's over 10 threads on moneymind that explains about ilp. Stop asking for a new explanation, nothing has changed. Ilp is and always will be blood sucking policies.

The funds that your policy buys probably charges a 1.5% annual fee. Prudential has its own fees of maybe, 2%? If your investment really did return 4%, you will only be left with 0.5% to buy some bread and beg on the streets. They don't care if your policy blooms or not, the fees will still go on, while you will tank all the losses and risks for them.

It's your choice if you want to slog your whole life to support your agent's rich and extravagant lifestyle. That's the price for letting others manage your money for you.

http://deluxeforums.hardwarezone.com.sg/money-mind-210/%5Bgpgt%5D-endowment-plan-values-question-5218527.html

 

[disavowed]

It's quite ludicrous that people buy these sort of policies just hoping to break even after a whopping 2 decades. No wonder insurance companies are raking in huge profits year after year.

 

[Shion]

It's quite ludicrous that people buy these sort of policies just hoping to break even after a whopping 2 decades. No wonder insurance companies are raking in huge profits year after year.

The chances of striking 4D is higher...lol

Sorry for MIA for awile. but thanks for the reply. after some research, I found out ILP is more of a long term plan which was why i bought it in the first place. And if you were to surrender after 3 years, definitely will make a loss.

I did a simple calculation and came out with a conclusion that at the age of 57, it wouldnt be worth it. but that is like 37 years from now and from what i see there is a long time for it to grow and at least breakeven (many online sources says it take at lesat 10-15 years to breakeven).

I am also wondering how do you calculate the returns since the my calculation is done at 4% returns per annum. My ILP is currently inside two funds, one is a dividend fund and another is not. So my only guess is that it is more of capital appreciation for both the non-dividend fund in which it is more of dollar cost averaging. That means if i want to surrender in the future, let say 20 years ago, i should surrender it when its booming.

So i am still thinking if i should surrender as the real investments start after the 3rd year and its more of a protection. Lastly, how true is it that you wont breakeven if you were to hold on for at least 20 years.

Thanks. and cheers!

I rather you park your money inside fixed deposits or STI ETF/Nikko AM STI ETF...

How did you get 4% returns per annum ? Based on the benefit illustration ?