Monday, March 17, 2008

High charges under ILP policy

Dear Mr. Tan,
I am insured for a sum assured of $100k and critical illness for 180k under a ILP since 2006. The cash value is about $300 now although I have a total premium of $3,600. Is this a good policy?

REPLY
The cash value is too low, compared to the premium that you have paid. The charges under the ILP policy is excessive and has taken away most of your savings. Read this FAQ:
http://www.tankinlian.com/faq/ilp.html

As you have already incurred most of the upfront charge, it is probably better for you to continue the ILP policy. After the second year, the charges should be quite low.

If you have to increase your savings in the future, do not buy a high cost ILP policy.

You can buy a term insurance policy to cover your protection needs. It is low cost and offers a large coverage. Read this FAQ:
http://www.tankinlian.com/faq/benchmark.html
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1 comment:

Anonymous said...

This product must be some kind of regular ILPs with which you decide the coverage and the riders and the amount of premium will determine how long it will last and also dependent on the performance of the ILP funds.For $3600 it is cheaper NOW than conventional or traditional whole life with CI rider for that amount of coverage.As it is , it works like a traditional except that
the coverage is higher. For young people it may be good product if you need high cover.
But like all 'traditionals" it has high cost. The agents are paid 50%, 25%,25% in 1st, 2nd and 3rd year.and 5% for another 3 years.
Conclusion, it is not a good product.
For ntuc agents who will be quick to condemn this kind of product, let me tell you it is NOT THE SAME as your ID2 or ID7. Bad luck. Dr. Money also has made an unfair comparision with ntuc's regular ILPs but it is not comparing apple for apple.

March 17, 2008 11:53 PM

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