Tan Kin Lian's Blog: Life Manager Plus

Wednesday, September 26, 2007

Life Manager Plus

Dear Mr Tan,

Recently I bought a insurance plan called Life Manager Plus. It is my first time to buy the insurance.

I need to pay S$300 a month premium for sum insured of S$100K for Death, Critical Illness and Total and Permanent Disability.

I am thinking of reducing the premium to $150 and invest $150 on my own. What is your advice?

MY REPLY:

Ask the agent to give you the following:

1. What is the upfront charge for investing in this product?
2. What percentage of your premium is invested?
3. What is the expense ratio of the fund?
4. What are the charges for the death cover?

I suggest that you read this FAQ:
http://www.tankinlian.com/faq/fptips.html

5 comments:

hongjun said...: I am sure $300 is a bit too steep.
Hope you should have engaged another qualified independent financial adviser to make product comparison across markets and get a plan suitable for you.; September 26, 2007 9:32 PM
Unknown said...: It is a suitable & sensible product as it covers all e important aspects that a life policy should have.I presume that there is a savings element in it too if there are no claim?

But for much lower premiums,do get term cover frm NTUC.. :>; September 26, 2007 10:05 PM
hongjun said...: This is interesting.
Released today
http://asp.lia.org.sg/lia-TypeA.asp?id=384; September 26, 2007 10:40 PM
Mr Gwapo said...: Hi guys,

I realize this is a very old thread, but some agent tried selling my gf this policy and I did some research. The below is my PERSONAL opinion.

This is not a good policy.

High distribution costs => $300/mo premium for my non-smoker gf, distribution costs of $9004. This is 2.5x. If you are not going to hold the policy for more than 20 years, 12.5% of your premiums are going to be expensed off to the insurer. (part commission to agent).

Insurance charge is NOT fixed => The agent is a bit shady and tried to explain this as the company has rights to increases insurance charge. However, by looking at the schedule, the insurance charge increases yearly due to your mortality.

By 65 years old, when you need all the protection, you have to start selling off your units to cover the cost of insurance. Worst, if the market is down, you might want to take cash to pay premiums as your units are worth less, so means you consume more units to pay insurance charges.

Sales charge ? => I don't know about the sales charge, but the bid-offer spread is 5% given, which means everytime you buy, 5% of your monies are not going to be converted into units. STI ETF's bid-spread is 0.3% btw.

The 3% and 5% bonus units is not worth much also if you're contributing at $300. At 3%, it's $108 bonus a year -_-.

Lastly, the fund's performance so far (balanced premium fund) follows the benchmark very closely. If that is the case, why not buy the benchmark and get a term insurance plan?

Suffer lesser slippage, lower insurance cost and lower management fees (which decrease NAV)

Just because a product suits all your needs doesn't mean it's good. An inefficient product that draws a larger portion of your premiums away decreases your chances of it succeeding as an investment. In my opinion, an ILP is the worst of both worlds, offering bad insurance and investment efficiency, but "meets all your needs".

I decided to post because I was disgusted by the agent, who cornered us for two hours and tried to mislead her into signing the agreement.; August 30, 2011 7:53 PM
Anonymous said...: Hi Mr Gwapo, every policy out in the market has its pros and cons. If its such a shity policy like you mentioned, then no one would be signing and all companies would have remove the policy plan by now. I believe most who has signed up have done their studies too, since its our hard-earned money..
Jus my 2cents. Peace ��; May 24, 2019 5:23 PM