Dear Mr. Tan,
I have already committed to a investment linked policy with X. I have been paying $300 a month for the past year. My cash value is very low. I learn from your blog that this is due to the high commission earned by the insurance agent. If I swtich to the Wealth Accumulator, will I earn a better yield?
REPLY
The investment linked policy that you have bought could take away up to two years of your savings, or $7,000. If you terminate it earlier, you will reduce your loss. If you invest in a fund with no front-end load, there is no additional cost to you. You will benefit from the savings in the remaining charges under the ILP.
As the low cost investment fund has smaller expense ratio, your investments will earn a better return over the longer term. This is in additional to the saving in the front end load. You will get a double benefit.
In general, it is advisable for you to terminate your existing regular premium ILP and move to the Wealth Accumulator.
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