Your thoughts on ILP?

[kzonexx]

how much guranteed returns are you getting?

no guaranteed return... its buying unit trusts... just like buying berkshire Hathaway stock. no monthly/yearly premium. U buy/sell whenever you want

 

[oceanicmanta]

I have been reviewing my ILP and my Whole Life plans.

To me ILP has more transparency in the sense that you know exeactly the number of units and what the value of the units at any one point in time.

With whole life plans, I find the Surrender Value, Maturity Value are big uncertainties, affected by what would the Terminal Bonus would be, if any, or the performance of the participating fund. Even then, if PAR fund does well & bonus still cut, we cant do anything.

Recently, I also have difficulty getting Revised Benefit Illustration from Prudential for my whole life plans, who provided truncated projected values at certain years & not every year. Original BI was showing every year.

It boggles me how insurers can get away with such shoddy practices.

 

[akwl88]

btir ba

mkt prices so transparent

sgx contract also stated the figures for comms

div also transparent inside ur bank acct

 

[Bigoya]

i view this as a pure investment... I don't get any insurance fm this.. I assume ILP refers to insurance products that are linked to investments?


I had this for about 5 years alredy

It is certainly a more pure ILP than the traditional ones... but our main concern here is not about linking investment to insurance although all along that seems to be what we have emphasizing on.

What we are really interested to know is if the fees and charges (mortality charge, however minimal it may be, and fees paid for using the platform) will eat a good portion of money out of our returns or not.

5 years is a good period to evaluate on how your fund/investment had performed in the past. See if the fund you have picked has profited and decide how much of your account value has been eaten by the fees and charges, and whether or not it's a good idea keep the investment going, and what other options you may have.

Read up on your policy booklet if you haven't.

Cheers!

 

[kzonexx]

It is certainly a more pure ILP than the traditional ones... but our main concern here is not about linking investment to insurance although all along that seems to be what we have emphasizing on.

What we are really interested to know is if the fees and charges (mortality charge, however minimal it may be, and fees paid for using the platform) will eat a good portion of money out of our returns or not.

5 years is a good period to evaluate on how your fund/investment had performed in the past. See if the fund you have picked has profited and decide how much of your account value has been eaten by the fees and charges, and whether or not it's a good idea keep the investment going, and what other options you may have.

Read up on your policy booklet if you haven't.

Cheers!

the fund fees is deducted from the number of units directly... my annualised returns is 4+ % now. I went it in 2011 and it lost over 20% in year 1. Did a few fund switches in between, initiated by the agent.

 

[Bigoya]

It boggles me how insurers can get away with such shoddy practices.

I can't help but to agree with you on this. I've tried hard to see if I could have gotten any "insider" info on this as an agent, but nope.. not a single clue.

To me ILP has more transparency in the sense that you know exeactly the number of units and what the value of the units at any one point in time.

With whole life plans, I find the Surrender Value, Maturity Value are big uncertainties, affected by what would the Terminal Bonus would be, if any, or the performance of the participating fund. Even then, if PAR fund does well & bonus still cut, we cant do anything.

For whole life and other par policies, a lot of it really depends on faith. Personally, I feel that as long as the insurer did not announce any bonus cut, there BI should not have been affected. In other words, if they cut bonus they'd have to inform their policy holders.

This is one reason why a Term life policy would make better sense than a Whole life in my opinion, provided you know how to growth your wealth elsewhere, like BTIR as akwl88 mentioned.

Recently, I also have difficulty getting Revised Benefit Illustration from Prudential for my whole life plans, who provided truncated projected values at certain years & not every year. Original BI was showing every year.

Have you tried calling their cust care directly and specify that you needed a detailed BI?

 

[Bigoya]

the fund fees is deducted from the number of units directly... my annualised returns is 4+ % now. I went it in 2011 and it lost over 20% in year 1. Did a few fund switches in between, initiated by the agent.

Just curious, did you calculate the annualised returns yourself or was it mentioned by the agent? Just to be sure the agent nv anyhow smoke you.

Also, for fund switches, do not fully rely on your agent because regardless how long he/she's been servicing you, there's no guarantee he could just disappear w/ or w/o keeping you in the loop, just in case, and you'd have to one day manage your portfolio on your own too.

 

[akwl88]

I can't help but to agree with you on this. I've tried hard to see if I could have gotten any "insider" info on this as an agent, but nope.. not a single clue.



For whole life and other par policies, a lot of it really depends on faith. Personally, I feel that as long as the insurer did not announce any bonus cut, there BI should not have been affected. In other words, if they cut bonus they'd have to inform their policy holders.

This is one reason why a Term life policy would make better sense than a Whole life in my opinion, provided you know how to growth your wealth elsewhere, like BTIR as akwl88 mentioned.



Have you tried calling their cust care directly and specify that you needed a detailed BI?

yeah as i mentioned, if using the Whole Life as a substitute for investment, the returns shld be more than mkt.

and the longer the holding period, the higher the returns shld be

 

[oceanicmanta]

For whole life and other par policies, a lot of it really depends on faith. Personally, I feel that as long as the insurer did not announce any bonus cut, there BI should not have been affected. In other words, if they cut bonus they'd have to inform their policy holders.

Have you tried calling their cust care directly and specify that you needed a detailed BI?

in 2008, all my whole life policies' projected terminal values decreased by 25% to 28% ! Though it recovered a little, I dont think it will go back to projected values in original BI. And I dont think there was bonus cut that year (I may be wrong).

Have called & emailed Cust Svc. There r quite clueless on this matter. Even had a CS Manager call me who does not have a Pru policy himself
Another Mgr called me to say they will provide as I requested. Still waiting for the BI.

The different versions of BI's for this particular policy they sent me so far are simply useless & laughable.

My agent is MDRT ... says this plan no longer offered so cant print ... . Laughable.

 

[akwl88]

in 2008, all my whole life policies' projected terminal values decreased by 25% to 28% ! Though it recovered a little, I dont think it will go back to projected values in original BI. And I dont think there was bonus cut that year (I may be wrong).

Have called & emailed Cust Svc. There r quite clueless on this matter. Even had a CS Manager call me who does not have a Pru policy himself
Another Mgr called me to say they will provide as I requested. Still waiting for the BI.

The different versions of BI's for this particular policy they sent me so far are simply useless & laughable.

My agent is MDRT ... says this plan no longer offered so cant print ... . Laughable.

Shows that mdrt agents are useless and incompetent

Beside selling more policies, they are basically useless

 

[Bigoya]

yeah as i mentioned, if using the Whole Life as a substitute for investment, the returns shld be more than mkt.

and the longer the holding period, the higher the returns shld be

Wholife is made up with endowment. You want compare investment go compare ILP.
Or altenatively, if you want high returns from WL, suicide 1 yr after policy in force, pay $2k for 1 yr take back $200k or more. Got any better IRR?

 

[Bigoya]

in 2008, all my whole life policies' projected terminal values decreased by 25% to 28% ! Though it recovered a little, I dont think it will go back to projected values in original BI. And I dont think there was bonus cut that year (I may be wrong).

Have called & emailed Cust Svc. There r quite clueless on this matter. Even had a CS Manager call me who does not have a Pru policy himself
Another Mgr called me to say they will provide as I requested. Still waiting for the BI.

The different versions of BI's for this particular policy they sent me so far are simply useless & laughable.

My agent is MDRT ... says this plan no longer offered so cant print ... . Laughable.

Agents give the most bull. My ML policy tt time oso, i aask my agent for fresh BI cos they cut bonus, my agent say plan obsolete, no BI. End up I got mine after calling cust care.

 

[akwl88]

Wholife is made up with endowment. You want compare investment go compare ILP.
Or altenatively, if you want high returns from WL, suicide 1 yr after policy in force, pay $2k for 1 yr take back $200k or more. Got any better IRR?

endowment have a investment component, no?

Endowment policies are often marketed to help you meet a financial goal like paying for your children’s education, or to build up savings over a fixed policy term. But unlike savings deposits, the guaranteed cash values you get back may be less than the sum of the premiums paid. This is because part of the premiums will pay for insurance protection while the rest is invested and subject to investment risk.

http://www.moneysense.gov.sg/Unders...es-of-Life-Insurance/Endowment-Insurance.aspx

 

[Bigoya]

endowment have a investment component, no?

Endowment policies are often marketed to help you meet a financial goal like paying for your children’s education, or to build up savings over a fixed policy term. But unlike savings deposits, the guaranteed cash values you get back may be less than the sum of the premiums paid. This is because part of the premiums will pay for insurance protection while the rest is invested and subject to investment risk.

http://www.moneysense.gov.sg/Unders...es-of-Life-Insurance/Endowment-Insurance.aspx

Well then, in a way you are right.
Personally I have yet come across any matured endowments so I can't provide any feedbacks on the usual maturity valuegiven back to policholders. However, yes, the risk nonetheless exist.

Having said that, having a non-guaranteed portion do not guarantee losses for any particular plans.

 

[akwl88]

Well then, in a way you are right.
Personally I have yet come across any matured endowments so I can't provide any feedbacks on the usual maturity valuegiven back to policholders. However, yes, the risk nonetheless exist.

Having said that, having a non-guaranteed portion do not guarantee losses for any particular plans.

investmentmoat has a couple of articles on endowment

http://investmentmoats.com/budgetin...ving-plans-endowment-give-you-3-to-5-returns/

 

[Bigoya]

investmentmoat has a couple of articles on endowment

http://investmentmoats.com/budgetin...ving-plans-endowment-give-you-3-to-5-returns/

Thanks for sharing. Have read it before.
Like what has been mentioned, good things ppl dont share, bad things people complain.

And people who are aware of investmentmoats and financial blogs alike are often people who realized they have been "conned", hence statistically speaking, the data were biased against poor examples. I've heard good examples myself too.

But since I'm not aware of the full details, i shan't comment.

Btw I took a 2nd look, there were indeed a few good examples in it mentioned by the blog owner too.

 

[Shion]

Most importantly is we must learn to be financially savvy, if not at minimum possess some form of knowledge in this so that we will not be easily misled by those selling financial products. And also, do not purchase something which you don't know, unsure or lack of knowledge in it.

 

[soneat]

in 2008, all my whole life policies' projected terminal values decreased by 25% to 28% ! Though it recovered a little, I dont think it will go back to projected values in original BI. And I dont think there was bonus cut that year (I may be wrong).

Have called & emailed Cust Svc. There r quite clueless on this matter. Even had a CS Manager call me who does not have a Pru policy himself
Another Mgr called me to say they will provide as I requested. Still waiting for the BI.

The different versions of BI's for this particular policy they sent me so far are simply useless & laughable.

My agent is MDRT ... says this plan no longer offered so cant print ... . Laughable.

Just to share my opinion:
1. When we buy whole life, the intention should be a desire to have protection for life. At old age, ILP mortality charges would be very high and that's when a whole life could be better.
2. The insurance company you choose needs to be ethical. My AIA policies were reduced several times (2 or 3) over the 20+ years and they never bother to inform policyholders. Reduction was huge... more than 40% reduced. Income ones were revamped but so far still look pretty Ok. GE, TM both no changes yet.

For the reason above, I super dislike AIA. They used to have the motto 'trust us for life' but I think they are the worst I have ever seen. AIA cannot be trusted.

 

[kzonexx]

Just curious, did you calculate the annualised returns yourself or was it mentioned by the agent? Just to be sure the agent nv anyhow smoke you.

Also, for fund switches, do not fully rely on your agent because regardless how long he/she's been servicing you, there's no guarantee he could just disappear w/ or w/o keeping you in the loop, just in case, and you'd have to one day manage your portfolio on your own too.

I calculated myself... I put in 130K in mid 2011. If I sell off everything now, I will get 165K+ (based on end dec price)


As for switches, my agent initiate then we have a discussion on what to do. I will for sure be a little directionless if she were to leave.


oh just to add, when I first started, I told the agent my aim is over 8% annualised return over 10 years so we were quite adventurous especially at the initial fund allocation but it didn't work well.

 

[Bigoya]

I calculated myself... I put in 130K in mid 2011. If I sell off everything now, I will get 165K+ (based on end dec price)


As for switches, my agent initiate then we have a discussion on what to do. I will for sure be a little directionless if she were to leave.


oh just to add, when I first started, I told the agent my aim is over 8% annualised return over 10 years so we were quite adventurous especially at the initial fund allocation but it didn't work well.

That's pretty good, about ±4.4% per annum returns. Has the relevant fees been factored in already?

Consider you are not really investment savvy (since you mentioned about being lost if she were to leave), she must either be a very good friend to you. Otherwise I find it risky to entrust $130k to a stranger.