Your thoughts on ILP?

[FP_IFA]

can i say that once one is 3-5years into the ILP, one is better off just following through the policy in order to ensure guaranteed profit (however minimal it is)?

the reason i am asking is cos my dad bought some ILP and i know that a huge chunk of what he is paying is towards financing his agent's brand new mercedes. i suggested that he terminate the policy to avoid further "losses" but his argument is that he has already paid so much for it and if he terminates it now, he loses all of that. is he making the right choice in this case?

sorry TS for hijacking this thread. just thought of asking here since its similar topic.

There is no guaranteed profit in ILP unlike an endowment. The policyholder takes all the risk of the investment.

I wouldn't do any recommendation without looking at the policy details and your dad's situation. The policy could have insurance cover and your dad could have pre-exist conditions which will then complicate matters.

 

[lewissac]

can i say that once one is 3-5years into the ILP, one is better off just following through the policy in order to ensure guaranteed profit (however minimal it is)?

the reason i am asking is cos my dad bought some ILP and i know that a huge chunk of what he is paying is towards financing his agent's brand new mercedes. i suggested that he terminate the policy to avoid further "losses" but his argument is that he has already paid so much for it and if he terminates it now, he loses all of that. is he making the right choice in this case?

sorry TS for hijacking this thread. just thought of asking here since its similar topic.

Well, if he already paid so long and you still have 5-6 years to maturity then why not just bear and wait for it?

 

[akwl88]

can i say that once one is 3-5years into the ILP, one is better off just following through the policy in order to ensure guaranteed profit (however minimal it is)?

the reason i am asking is cos my dad bought some ILP and i know that a huge chunk of what he is paying is towards financing his agent's brand new mercedes. i suggested that he terminate the policy to avoid further "losses" but his argument is that he has already paid so much for it and if he terminates it now, he loses all of that. is he making the right choice in this case?

sorry TS for hijacking this thread. just thought of asking here since its similar topic.

hard truths

 

[chainer22]

There is no guaranteed profit in ILP unlike an endowment. The policyholder takes all the risk of the investment.

I wouldn't do any recommendation without looking at the policy details and your dad's situation. The policy could have insurance cover and your dad could have pre-exist conditions which will then complicate matters.

hmmm i remember my dad told me he will be expecting to receive a certain sum of money upon maturity. may i know if there's any policy detail i should look out for?

Well, if he already paid so long and you still have 5-6 years to maturity then why not just bear and wait for it?

i was worried he might be losing out if he chooses to follow through. i will check with him the exact status again.

hard truths

he once mentioned that his agent is very nice and treats him like a VIP. i wonder why...

 

[FP_IFA]

It doesn't sound like ILP then. Maybe you can post the policy details for us to take a look (remember to blank off the personal info).

 

[IndianChief]

Your agent does the rebalancing? This is already fake representation

Better run far away

 

[oceanicmanta]

hmmm i remember my dad told me he will be expecting to receive a certain sum of money upon maturity. may i know if there's any policy detail i should look out for?

i was worried he might be losing out if he chooses to follow through. i will check with him the exact status again.

he once mentioned that his agent is very nice and treats him like a VIP. i wonder why...

"receive certain sum upon maturity" - sounds more like Endowment / Savings plan.

For Endowment/Savings plans, there should be annual Policy Notice, or Bonus notice and you can ask for Revised Benefit Illustration (to compare with original Benefit Illustration).

ILP shld not have a maturity. U get units in the investment fund. If u terminate, the amount u get back is just (No. of Units) X (Fund Unit Price). If the fund is doing well & u manage to sell at a high level, u get more back. The converse is true.

For ILP, there shld be a Annual Statement showing how many units owned, units bought & sold during the year, current Fund price (Bid/Offer) etc.

 

[dendii]

At the benefit illustration, look out for the portion "Guaranteed".

For endowment plans, there should be such a column but ILP will not have. You will know what kind of plan it is then.

hmmm i remember my dad told me he will be expecting to receive a certain sum of money upon maturity. may i know if there's any policy detail i should look out for?



i was worried he might be losing out if he chooses to follow through. i will check with him the exact status again.



he once mentioned that his agent is very nice and treats him like a VIP. i wonder why...

 

[dendii]

Depends on the individuals understanding of the market and willingness to invest on their own.

If one continues to put money in, you are incurring the opportunity cost where you can invest on your own for better returns, while also risking that the plan's maturity payout may not meet what was projected.

If one decides to surrender the plan to cut losses, then you better know a way to invest on your own so that while you lose some of the premium, you can potentially get better returns investing on your own.

can i say that once one is 3-5years into the ILP, one is better off just following through the policy in order to ensure guaranteed profit (however minimal it is)?

the reason i am asking is cos my dad bought some ILP and i know that a huge chunk of what he is paying is towards financing his agent's brand new mercedes. i suggested that he terminate the policy to avoid further "losses" but his argument is that he has already paid so much for it and if he terminates it now, he loses all of that. is he making the right choice in this case?

sorry TS for hijacking this thread. just thought of asking here since its similar topic.

 

[anfielder]

can i say that once one is 3-5years into the ILP, one is better off just following through the policy in order to ensure guaranteed profit (however minimal it is)?

the reason i am asking is cos my dad bought some ILP and i know that a huge chunk of what he is paying is towards financing his agent's brand new mercedes. i suggested that he terminate the policy to avoid further "losses" but his argument is that he has already paid so much for it and if he terminates it now, he loses all of that. is he making the right choice in this case?

sorry TS for hijacking this thread. just thought of asking here since its similar topic.

Initially I also thought I should carry on with my plans since a lot of the costs are incurred in the early years. But I decided to cancel both my plans (after 9 and 12 years) because the recurring costs are also significant - ~2% fund mgmt charge, $5 per month account mgmt fee etc. My portfolio was growing to ~10k for each plan and that meant that at least $520 per year was going into fees. If I keep the plans I might eventually break even, but I'll probably break even faster by cancelling & dumping the cash into a portfolio of ETFs.

Of course, I can only do this because I'm properly covered by term insurance.

 

[akwl88]

actually if you all buy endowment or ilp, why want to break even?

i tot we all want to profit on our investments?

 

[BBCWatcher]

Well, if he already paid so long and you still have 5-6 years to maturity then why not just bear and wait for it?

The U.S. S&P 500 stock index ended up almost 10% for the year 2016, and that's not counting U.S. dollar appreciation against the Singapore dollar. A monkey could have/should have managed an 8% yield for 2016 net of (high) costs in that market environment.

If this "investment" didn't even manage to perform in 2016, an excellent year, is it reasonable to assume it will in the future?

 

[dolph001]

What are your thoughts if I were to take up an ILP such as AXA Pulsar/Optimus/Inspire Flexiprotector with the fund being Fortress A?

Assuming that the agent is knowledgable about the market outlook etc and will rebalance portfolio according to market conditions, hence I don't have to monitor my fund.

Would it be wise? Would I be able to at least have a returns of 8% after deducting all the charges?

ONLY 17 out of 84 AXA funds generate more than 8% before deduction.

What are your agent's chances of choosing the right one?

 

[anfielder]

actually if you all buy endowment or ilp, why want to break even?

i tot we all want to profit on our investments?

because if you buy any of these crappy plans, you're starting from way behind. breaking even will already take many years, let alone making a profit.

things I wish I knew when I was younger

 

[Bigoya]

What are your thoughts if I were to take up an ILP such as AXA Pulsar/Optimus/Inspire Flexiprotector with the fund being Fortress A?

Assuming that the agent is knowledgable about the market outlook etc and will rebalance portfolio according to market conditions, hence I don't have to monitor my fund.

Would it be wise? Would I be able to at least have a returns of 8% after deducting all the charges?

I am from AXA. Plans like Pulsar/Optimus/Inspire FlexiProtector are crap. Optimus being a new plan similar to Prudential's Select Vantage is a back-end loading plan. Fees aside, there is an upfront bonus and no allocation charges. While all these sounds good, the fees are high. Biggest risk is IF you cannot commit the tenure all the way to maturity, the back-end loading will result in a very small surrender value depending on how long you are left with till maturity.

Fortress A wise is a good fund. You can invest that through Inspire Duo, which is a single premium investment. One time sales charge up to 5% for cash and 3% for CPF only.

In my opinion however, now is not the right time to enter the fund as I'm expecting a fall. Enter after the fall has ended (if it happens).

Never ever give the agent your full trust, whether he is your friend/husband/parents/relative. Even if he is good, he may have a lot of clients under his care. He might overlook on your fortfolio. At least do your own homework and check out the fund once per month.

8% returns annualized after fees and charges is really really rare for ILPs. Best I came across till date is ard 3% net. Highest you can hope for is maybe a 4% - 5%. Average returns to expect is around 1%, unfortunately, unless you hold like 20 years.

 

[Bigoya]

can i say that once one is 3-5years into the ILP, one is better off just following through the policy in order to ensure guaranteed profit (however minimal it is)?

the reason i am asking is cos my dad bought some ILP and i know that a huge chunk of what he is paying is towards financing his agent's brand new mercedes. i suggested that he terminate the policy to avoid further "losses" but his argument is that he has already paid so much for it and if he terminates it now, he loses all of that. is he making the right choice in this case?

sorry TS for hijacking this thread. just thought of asking here since its similar topic.

Guarenteed profit? Nothing is guarenteed in an ILP. Full risk is borne by policyholder. You might even end up with losses FYI.

Doesn't matter if you are investing via ILP or buying stocks yourself, if you have completely no idea what you are doing, you should just stop doing it. Because nothing is guaranteed in an investment.

Assuming your dad's ILP will finally breakeven after 20 years, is he going to just wait another 20yrs only to breakeven?

Many would agree that terminating it now is a better plan. But just to be sure, you might want to evaluate the fund performance to identify a better opportunity for termination.

 

[akwl88]

Any agents can tell me why chiu all recommend those "investment" products just to break even after 10,20 yrs?

I tot we all want to huat from investment asap?

 

[dkgamer]

actually if you all buy endowment or ilp, why want to break even?

i tot we all want to profit on our investments?

Haha because TBH not many people like us on money mind investing is like exercise. Need discipline also...

 

[IsabelleT]

I am from AXA. Plans like Pulsar/Optimus/Inspire FlexiProtector are crap. Optimus being a new plan similar to Prudential's Select Vantage is a back-end loading plan. Fees aside, there is an upfront bonus and no allocation charges. While all these sounds good, the fees are high. Biggest risk is IF you cannot commit the tenure all the way to maturity, the back-end loading will result in a very small surrender value depending on how long you are left with till maturity.

Fortress A wise is a good fund. You can invest that through Inspire Duo, which is a single premium investment. One time sales charge up to 5% for cash and 3% for CPF only.

In my opinion however, now is not the right time to enter the fund as I'm expecting a fall. Enter after the fall has ended (if it happens).

Never ever give the agent your full trust, whether he is your friend/husband/parents/relative. Even if he is good, he may have a lot of clients under his care. He might overlook on your fortfolio. At least do your own homework and check out the fund once per month.

8% returns annualized after fees and charges is really really rare for ILPs. Best I came across till date is ard 3% net. Highest you can hope for is maybe a 4% - 5%. Average returns to expect is around 1%, unfortunately, unless you hold like 20 years.

Yup that is so true. Agents love to tell people that it can generate more than 5% returns. If you check all the ILPs from different agencies, most of them barely even hit 3%, which is the nominal inflation rate. Some even lost money lols. I rather invest in REITs or bonds. If you really want to invest, don't do it via ILPs.

 

[Shion]

Yup that is so true. Agents love to tell people that it can generate more than 5% returns. If you check all the ILPs from different agencies, most of them barely even hit 3%, which is the nominal inflation rate. Some even lost money lols. I rather invest in REITs or bonds. If you really want to invest, don't do it via ILPs.

It is the same for any type of plans. They all will only point to you the highest ROI % printed on the benefit illustration.

The best is know your stuff, that is how you can reduce the chances of being mislead by others.