Friday, December 28, 2012

Shocking experience with Investment Linked Policy (ILP)

Many consumers bought investment linked policies (ILP). They were actively marketed by insurance agents as a good solution to provide insurance protection and to achieve the gains of long term investing in stocks. The benefit illustration project returns of 5% and 9% (which is rather optimistic).

Most insurance agents did not explain to the consumer that the high charges of the ILP take away a large part of the non-guaranteed return from the investments, leaving almost nothing to the consumer for the first 15 years.

Read the experience of "Ms. Koh" who was shocked to learn that her ILP gave her a large loss after 12 years, when the stock market actually performed well. Her shocking experience reflects what has been happening to tens of thousands of unsuspecting purchasers of many ILP policies.

In recent years, some insurance companies have been bold in increasing the charges to unconscionable levels. If you have bought an ILP policy, you should read this article carefully and look at your benefit illustration to see if you are in a similar situation to "Ms. Koh."

If you have been misled or badly advised by the insurance agent or financial adviser, you should also consider writing to the Monetary Authority of Singapore.

1 comment:

zhummmeng said...

Never, never, never buy regular ILPs from whichever company. These products no difference from buying a wholelife as saving plan.They break even only after 25 years.

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