Should I terminate my ILP?

[i c e queen]

Hi guys

Need some help here.

I got an ILP with 1.4k premiums per annum around 5 - 6 years ago.

2 years back i embarked on my self-employment journey and got talked into doubling the premiums to 3k, but 1 year ago i decided i was just too foolish trusting the agent too much just because he handles my entire family's policies. He was pushing me to transfer all my policies fr other coys to under his name and i found that too annoying so i changed agent.

New agent said there's no need to buy such a huge amount for ILP. I did not pay the premiums last year and in a few months' time i will have to pay the premiums already.

Wondering if i should just terminate it despite the loss? Or should i just stick with it?

Thanks!

 

[SpinFire]

Omg, another rouge agent.

When you 'transfer' your policies from another company to him, you're actually terminating the policies, and buying new policies from him. Then Ka Ching, he'll earn more commissions.

Don't EVER get ILPs. He'll say that it's a 'good' product that combines insurance with investment. It is actually just TERM insurance + unit trust fund investments. It is also an insurance product that pays one of the highest commissions. Ka Ching, he earns lots of commissions again.

Every time you pay the annual premiums, you incur a recurrent 5% sales charge when you buy more unit trust fund units (Fundsupermart has 0% sales charge for RSPs).

You should:
1. Ensure you're covered with the upgraded MediShield plan
2. Get term insurance coverage till age 65 (costs will increase beyond 65 years old)
3. Option 1: Start a Regular Savings Plan (RSP) with Phillips Securities/OCBC/POSB.
4. Option 2: you can consider starting a RSP with Fundsupermart (check out Infinity Global Stock Index Fund, its management fee is <1% and you get exposure to stock indices worldwide)
5. Option 3: Open a StanChart online trading account, and buy the STI ETF on a regular basis.

What's the loss that you'll incur when you surrender the ILP?

 

[wahkao3]

why insurance agent so smelly 1?
recommend all those useless products

 

[VictimofILP]

I got a AIA ILP through my blood sucker AIA Agent.. She sold me 100K Worth of Policies (30K Per year)..

After 2 years , i closed all of them.. Yes i lost 90K ... But imagine if i continued for another 10 years ... i would lost close to a 1/2 million dollars..

Do the numbers ... and you will see how much u loosing.. you will never get money back from the ILP.

My blood sucking AIA agent , sold Riders on top of the ILP.. So she can get commission for the Riders change every year and Commission..

I will never ever let a AIA or any insurance agent anywhere near me..

 

[Aerial86]

Hi everyone,

Just to clarify one thing. From what I've read about TS post, I believe her servicing agent is a FA that's why policies can be transferred. It is not as what spinfire said about terminating policies and buying new ones.

 

[Aerial86]

I got a AIA ILP through my blood sucker AIA Agent.. She sold me 100K Worth of Policies (30K Per year)..

After 2 years , i closed all of them.. Yes i lost 90K ... But imagine if i continued for another 10 years ... i would lost close to a 1/2 million dollars..

Do the numbers ... and you will see how much u loosing.. you will never get money back from the ILP.

My blood sucking AIA agent , sold Riders on top of the ILP.. So she can get commission for the Riders change every year and Commission..

I will never ever let a AIA or any insurance agent anywhere near me..

Sorry to hear about your situation. There are definitely black Sheeps out there in this industry but I hope that does not affect your confidence in the importance of insurance and how it can help.

Just look for the correct person to serve you.

 

[i c e queen]

Hey guys, thanks for the replies, i reallllyyyy appreciate it!

Indeed, he got me to terminate my AIA Goldshield and got me to purchase his Prushield + Rider. I forgot how I was brainwashed into it but i definitely blame myself for believing him too much back then.

My surrender value is $2,400 now..so...I guess I would have lost a few thousands.
I dont know if i should hold it till it breakevens or just terminate it...

right now i have got:
1. endowment 25 years
2. online account with UOBKH waiting for a good time to buy into sti etf
3. AIA Pink of Health
4. Prushield + Rider
5. ILP
6. (around 3 more small coverage plans)

So....terminate the ILP is better?

 

[VictimofILP]

Do the numbers and close them off if you are loosing money.. Dont hang on to them..

Hi guys

Need some help here.

I got an ILP with 1.4k premiums per annum around 5 - 6 years ago.

2 years back i embarked on my self-employment journey and got talked into doubling the premiums to 3k, but 1 year ago i decided i was just too foolish trusting the agent too much just because he handles my entire family's policies. He was pushing me to transfer all my policies fr other coys to under his name and i found that too annoying so i changed agent.

New agent said there's no need to buy such a huge amount for ILP. I did not pay the premiums last year and in a few months' time i will have to pay the premiums already.

Wondering if i should just terminate it despite the loss? Or should i just stick with it?

Thanks!

Queen

Do this.

1. Open excel sheet
2. Get the details of your ILP , including all the cost associated with
3. In Column one - Enter the Premium amount you paying
4. In Column two - Enter the fees and Charges you are paying
5. In Column three - Enter the MER of the Funds the money deposited
6. Find out what is the total value of the ILP as today.

Also open another sheet , see what happens if you set aside a Term Insurance and invest the rest of funds in Vanguard or any fund that's charges <1 MER. See the compounding effect on year to year basis..

What you will find out is the only one that's benefiting from your premium is the Insurance company and the agent.

Just by the Feed and MER , they got the money worth.. But you are the sore looser year..

Do note , every time you pay premium the agent get commission.. What do you get !! nothing... If at all after 10 years , you should get something minus all the expenses ... But i am sure that will be less than what you paid.

On the flip side , if you take a Term Insurance and invest the rest in STI ETF. You control your money , there is no penalty , yes there is market fluctuation's... The same goes for ILP , because they invest in the same market.. On the 10th year for example ... if the market is rock bottom you will loose more .. because you invested 10 years of your money .. which include fees etc.. You will be forced to keep the policy running ...



The minute you start to understand how to invest on your own.. In few years time you will get good at it and you will start to invest wisely..

On the ILP , you are always under the control of some Sucker Agent and Sucker Insurance company.

 

[Knight_Rider]

You can use your ILP as a life plan. Term doesn't cover you for life. And remember insurance doesn't benefit you when you are alive sure lose money stamp chop. BUT............ the sucker insurance company gives you $100 000 in case of what if.

 

[Aerial86]

Hey guys, thanks for the replies, i reallllyyyy appreciate it!

Indeed, he got me to terminate my AIA Goldshield and got me to purchase his Prushield + Rider. I forgot how I was brainwashed into it but i definitely blame myself for believing him too much back then.

My surrender value is $2,400 now..so...I guess I would have lost a few thousands.
I dont know if i should hold it till it breakevens or just terminate it...

right now i have got:
1. endowment 25 years
2. online account with UOBKH waiting for a good time to buy into sti etf
3. AIA Pink of Health
4. Prushield + Rider
5. ILP
6. (around 3 more small coverage plans)

So....terminate the ILP is better?

Alternatively, I could help you out in terms of compiling everything up so that you can have a clearer picture of all the policies that you're holding, and also share with you on the structure and mortality charges calculation of your ilp.

In this case you can make a better informed decision on your own portfolio.

 

[torrent06]

I too have lost money through ILP and I was unhappy with the agent who sold me this. While I can understand how you feel, it is important to stay objective and not think all the policies the agent sold you are bad simply because he earns commission. We have to accept that theirs is a commission based job. It is not wrong of them to earn commission from the product they recommended unless they have recommended an unsuitable product. If you work a salaried job, you also want to be paid a fair salary for the service you provide. Would you or the company you work for want to work for free? Do you think the company you work for is the best in the market?

The Prushield is quite a good plan provided you have no preexisting conditions before switching insurers. From recent threads I've read, many people don't understand their policies or how insurance riders work and think it is money paid for nothing. I think that is sad beause insurance does have its benefits and somehow the layman just find it difficult to comprehend and after reading some off-the-cuff, irresponsible remarks by others, think all insurance products are bad. I don't think this type of discussion is healthy or helpful.

 

[archcherub]

You should:
1. Ensure you're covered with the upgraded MediShield plan
2. Get term insurance coverage till age 65 (costs will increase beyond 65 years old)
3. Option 1: Start a Regular Savings Plan (RSP) with Phillips Securities/OCBC/POSB.
4. Option 2: you can consider starting a RSP with Fundsupermart (check out Infinity Global Stock Index Fund, its management fee is <1% and you get exposure to stock indices worldwide)
5. Option 3: Open a StanChart online trading account, and buy the STI ETF on a regular basis.

This should be sticky and cut and pasted to all TS that start threads on how do i get started on retirement savings ... or wat do i buy for savings etc etc

 

[MaoZeDuo]

Queen

Do this.

1. Open excel sheet
2. Get the details of your ILP , including all the cost associated with
3. In Column one - Enter the Premium amount you paying
4. In Column two - Enter the fees and Charges you are paying
5. In Column three - Enter the MER of the Funds the money deposited
6. Find out what is the total value of the ILP as today.

Also open another sheet , see what happens if you set aside a Term Insurance and invest the rest of funds in Vanguard or any fund that's charges <1 MER. See the compounding effect on year to year basis..

What you will find out is the only one that's benefiting from your premium is the Insurance company and the agent.

Just by the Feed and MER , they got the money worth.. But you are the sore looser year..

Do note , every time you pay premium the agent get commission.. What do you get !! nothing... If at all after 10 years , you should get something minus all the expenses ... But i am sure that will be less than what you paid.

On the flip side , if you take a Term Insurance and invest the rest in STI ETF. You control your money , there is no penalty , yes there is market fluctuation's... The same goes for ILP , because they invest in the same market.. On the 10th year for example ... if the market is rock bottom you will loose more .. because you invested 10 years of your money .. which include fees etc.. You will be forced to keep the policy running ...



The minute you start to understand how to invest on your own.. In few years time you will get good at it and you will start to invest wisely..

On the ILP , you are always under the control of some Sucker Agent and Sucker Insurance company.

Hey victim... When u start learning to calculate using excel on your own and realize the pit hole?

 

[endlssorrow]

One thing I won't get ILP is the returns is not 100% guarantee as compare to endowment or whole life

 

[ochazuke]

Omg, another rouge agent.

When you 'transfer' your policies from another company to him, you're actually terminating the policies, and buying new policies from him. Then Ka Ching, he'll earn more commissions.

Don't EVER get ILPs. He'll say that it's a 'good' product that combines insurance with investment. It is actually just TERM insurance + unit trust fund investments. It is also an insurance product that pays one of the highest commissions. Ka Ching, he earns lots of commissions again.

Every time you pay the annual premiums, you incur a recurrent 5% sales charge when you buy more unit trust fund units (Fundsupermart has 0% sales charge for RSPs).

You should:
1. Ensure you're covered with the upgraded MediShield plan
2. Get term insurance coverage till age 65 (costs will increase beyond 65 years old)
3. Option 1: Start a Regular Savings Plan (RSP) with Phillips Securities/OCBC/POSB.
4. Option 2: you can consider starting a RSP with Fundsupermart (check out Infinity Global Stock Index Fund, its management fee is <1% and you get exposure to stock indices worldwide)
5. Option 3: Open a StanChart online trading account, and buy the STI ETF on a regular basis.

What's the loss that you'll incur when you surrender the ILP?

This is a good post. May I also just add a suggestion that, should you fall into a right income bracket, to maximise your $7,000 CPF SA and $12,500 SRS contributions per year. Not everyone will agree with this but you could potentially save alot in terms of tax.

 

[chrisyew]

Hi,
May I know what is "RSP with Fundsupermart"? Thanks.

Omg, another rouge agent.

When you 'transfer' your policies from another company to him, you're actually terminating the policies, and buying new policies from him. Then Ka Ching, he'll earn more commissions.

Don't EVER get ILPs. He'll say that it's a 'good' product that combines insurance with investment. It is actually just TERM insurance + unit trust fund investments. It is also an insurance product that pays one of the highest commissions. Ka Ching, he earns lots of commissions again.

Every time you pay the annual premiums, you incur a recurrent 5% sales charge when you buy more unit trust fund units (Fundsupermart has 0% sales charge for RSPs).

You should:
1. Ensure you're covered with the upgraded MediShield plan
2. Get term insurance coverage till age 65 (costs will increase beyond 65 years old)
3. Option 1: Start a Regular Savings Plan (RSP) with Phillips Securities/OCBC/POSB.
4. Option 2: you can consider starting a RSP with Fundsupermart (check out Infinity Global Stock Index Fund, its management fee is <1% and you get exposure to stock indices worldwide)
5. Option 3: Open a StanChart online trading account, and buy the STI ETF on a regular basis.

What's the loss that you'll incur when you surrender the ILP?

 

[___jeff]

what are you waiting

 

[wahkao3]

The minute you start to understand how to invest on your own.. In few years time you will get good at it and you will start to invest wisely..

How to invest, pls teach

 

[realwords]

There can be value in the ILP if your agent knows what he's doing and services you well. There are some areas he can value add for you in this ILP:

1. Adjust coverage for you annually to match your needs. This helps to cut down on your insurance costs since our insurance needs typically go down over the years.

2. Adjust fund proportion and allocation to match your risk tolerance and the market outlook. By doing regular reviews and rebalancing your portfolio, or entering a potential market or leaving an undesirable one, you may achieve better returns. Some people prefer having advisors to hold their hands and walk them through this process.

If your agent can't understand the market happenings or he's only good at selling, then I suggest you sack him and find someone who knows his stuff well.

You're already 6 years into this plan. The most expensive part of this plan is already over. It may add value to you instead by keeping the plan. Do some calculations on your own, or seek help from an advisor for this. It's better than to seek advice from people here who don't know your situation well.

You may pm me if you need advice for your situation.

 

[i c e queen]

Aiyo die.

I stopped using the agent, and my new agent doesnt really help as well. I can understand since the new agent doesnt earn any commission. So as of now, i have to make a decision by september or i will have to service my ILP ($150/month).