Heavy loss on ILP for first two years

Dear Mr Tan,
In September 2006, I bought an Investment-linked policy for $150,000 death, critical illness, and disability. First 2 years, no investment portion, all the money go to insurance coverage. Just recently I realize ILP is a 'time bomb' after read some article about it.

Now our friend recommanded me to stop the ILP and take the loss of $6000. Should I continue with the ILP, by paying the lowest fee till the market recover? I hope that I can recover back my investment in 5 years time. My friend said if I continue with my monthly savings, I will lose more, compare with the loss of $6000 now.

REPLY
Generally, you suffered the upfront cost during the first two years. After that, the charges are not too heavy. So, if you have already paid for more than two years, it is generally better to continue the ILP.

If you find the insurance cost to be too high, you can reduce the coverage. But, you must compare the charges against a term insurance policy.

These are general remarks. I am not able to give you specific advice on your particular matter.