( Initially I had very negative views about ILP but after consulting agents and flowerpod I understand why ILP is still popular, it is just how you rearrange whats in your ILP and how you can maximise your money. I am learning and reading up more about it and below are some things which I have just learnt)
I have this policy which I bought without thinking in July 2010.
- I am paying $1907.28 for 60+years (if I were to continue till I am that old)
- Now, the premium is split into two different funds, 50% in China-Indian fund and another 50% in Singapore Managed Fund.
- I have this Crisis cover Provider III with an assured sum of $50,000 for 99 years
- Total and permanent Disability with sum assured of $104650 for 44 years. I would be 64 years old by then, and I think I may need a wheelchair le, so I don’t think 44 years is enough.
Advantages
- Its supposed to be good when i started out young at 20 years old. Since, there will be higher charges for aged 50 onwards, I may terminate it by the time I reach 50.
- Low premiums
- You most likely get back a substantial lump sum after like 30 or 40 years if you diligently not take out any for emergencies lah and let it grow and grow.
- You can take out the available amount for emergency use and there is no charge, but
- Its supposed to be good when i started out young at 20 years old. Since, there will be higher charges for aged 50 onwards, I may terminate it by the time I reach 50.
- Low premiums
- You most likely get back a substantial lump sum after like 30 or 40 years if you diligently not take out any for emergencies lah and let it grow and grow.
- You can take out the available amount for emergency use and there is no charge, but
-It can also be treated as a form of diversification i guess.
-I have this crisis cover till I am 99years old and usually other policies will stop at 65 years old.
Disadvantages
- Must have balls to tahan incase econony goes down. Holding power is important and shouldn’t have cold feet and withdraw when it is at your disadvantage just like stocks.
- High admin fees in the first 4 years which means that 100% of premium will be invested after 4 years. If i am not wrong, first yr only 15%, 2-3year is 50%
- It does have hospitalisation or accident cover which i feel is more important for my age group. Right now, this I feel health related insurance is more suitable rather than death, permanent disabilty or critical illness like stroke, cancer etc although it is important too but hospitalisation should be on a higher basis.
What i can do to maximise money's worth now that i know that I already have an ILP
- Lower my death payout sum so more of my premium can go towards investmemt which most like will be able to generate more returns. For now my death payout sum is 100k, haha my life only worth a miserable 100k but, this 100k is quite a lot for an ILP, and people my age insure their death for 20-50k only.
- I can also reorganise my portfolio, currently its 50% in china-indian fund and another 50% in Singapore Managed fund. But i would like to diversify into the emerging market funds too. My ideal fund mix should be 40% china-indian, 40% emerging markets (or Global Equity Fund) and 20% singapore. I believe that those markets will boom within 20-40years, which is the period of time which I am probably holding my ILP for.
- In addition, i was also advised to pay my premiums monthly to take advantage of dollar cost averaging. Previously, i had opted to pay yearly, because i believe with more money put in, it can generate more. Now that the market is in an upward trend, i believe i will continue to pay premium yearly for the moment. I have to read up more about dollar cost averaging before making a decision, because i think that monthly payments will also incur a little admin charge.
Disadvantages
- Must have balls to tahan incase econony goes down. Holding power is important and shouldn’t have cold feet and withdraw when it is at your disadvantage just like stocks.
- High admin fees in the first 4 years which means that 100% of premium will be invested after 4 years. If i am not wrong, first yr only 15%, 2-3year is 50%
- It does have hospitalisation or accident cover which i feel is more important for my age group. Right now, this I feel health related insurance is more suitable rather than death, permanent disabilty or critical illness like stroke, cancer etc although it is important too but hospitalisation should be on a higher basis.
What i can do to maximise money's worth now that i know that I already have an ILP
- Lower my death payout sum so more of my premium can go towards investmemt which most like will be able to generate more returns. For now my death payout sum is 100k, haha my life only worth a miserable 100k but, this 100k is quite a lot for an ILP, and people my age insure their death for 20-50k only.
- I can also reorganise my portfolio, currently its 50% in china-indian fund and another 50% in Singapore Managed fund. But i would like to diversify into the emerging market funds too. My ideal fund mix should be 40% china-indian, 40% emerging markets (or Global Equity Fund) and 20% singapore. I believe that those markets will boom within 20-40years, which is the period of time which I am probably holding my ILP for.
- In addition, i was also advised to pay my premiums monthly to take advantage of dollar cost averaging. Previously, i had opted to pay yearly, because i believe with more money put in, it can generate more. Now that the market is in an upward trend, i believe i will continue to pay premium yearly for the moment. I have to read up more about dollar cost averaging before making a decision, because i think that monthly payments will also incur a little admin charge.
My next task is, learning how to check how the funds perform, next time can do it by myself without such huge chunks of my $$$ on agents’ commissions.
This is a print screen from my China-Indian fund factsheet
This is a print screen of my Singapore Managed Fund factsheet
My Singapore Managed Fund performance chart as at 25feb2011
My China-Indian Fund Performance chart as at 25feb2011
Well, both doesnt look very good isnt it? sian half le....
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