Wednesday, February 20, 2008

High cost Investment Linked Policy

Dear Mr. Tan,

I already have an ILP for the last 3 years. However, an adviser friend told me to cancel it and use the money instead to buy term and to invest the rest in unit trusts that would yield more returns in the long term.

I have already paid $3600 to date and my current cash value is at $900 for the ILP. Do you think I should just cancel the ILP and heed her advice?

REPLY

You should compare the charges of the ILP and the unit trust going forward. You probably have incurred most of the upfront charges for the ILP, so the difference between the two options in the future is likely to be small.

You can read this FAQ to understand the charges:
http://www.tankinlian.com/faq/ilp.html
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1 comment:

Anonymous said...

After 3 years you should have paid off all the charges. The only charges you will be paying from now will be your insurance mortality charge, management fee and some policy fee. How much left is allocated to investment is largely determined by your insurance. If you have huge coverage naturally it will affect the rate of saving.Anyway you have overcome the big ones so you should stay with your current regular saving.

February 20, 2008 1:45 AM

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