Yes, I suspect ILP is a bit suspect as well.

One financial planner told me that it's good when you're young, but must cash out by the time you're in yr forties cos that's when the HIGHER premiums will be deducted frm yr units - best to opt for term then.

ILP is cheap when you're young. But later it is phenomenally expensive.

I too have Life ILP. I will periodically take out the Accumulated cash to invest in equity directly. But will maintain the Life coverage. When the cover becomes unattainable, I will just discard it and switch to basic term. That is my plan.

Xuzen

You are right when you said that one should not mix insurance and investment.Insurance is for protection and investment is for wealth generation. I buy my insurance with premiums only, no endowment, no investment, no returns, no nothing to be paid back ever. Why i think that insurance should not be mixed with investment is as follows.

1. When you pay for the ILP's you can never choose the time/amount you want to invest, you lose flexibility.
2. ILP have very poor annual report which they never show you all the expenses incurred and FULL accounts.
3. The fees charged are higher than mutual funds so you do lose out and ILP's are not regulated by BNM.
4. By paying for ILP's you are putting all your eggs in one basket, in which you lose the option for diversification and switching/cashing out, unless you cancel your insurance.
5. Basically by buying ILP, you put your financial future at the hands of others.

Your opinion of mutual fund is inaccurate, in fact mutual funds play a big role in your investment strategy if you know how to utilize them properly.

1. Mutual fund provides diversification, not only for Malaysian stocks but diversification for foreign stocks/commodities/foreign bonds.
2. Mutual funds let you have access to commercial bonds, which is regularly sold as RM 1 million allotments, other wise you cannot afford to invest.
3. Those who buy and hold, or dollar cost average (basically lazy) is irresponsible of their investment, which they deserve whatever they get. Basically if you work at it, investment in mutual funds is a lot of work. You need to work on when the right time to buy and sell fund like shares, or switch to different categories when needed.
4. Not all funds are expensive (but malaysian funds is one of the world's most expensive), so you do not have to invest solely in Malaysian based funds. If you do not fancy mutual funds with high cost, then perhaps a cheaper ETF is the better candidate, which is basically an open fund. Anyway there are a lot of oversea funds you can buy.

I hold a diversified assets, which includes direct malaysian stock, some malaysian bond funds. For non malaysian based funds i own asian ex japan funds, commodities funds, us, europe funds and China A and H class funds.

This post has been edited by gark: May 8 2009, 03:57 PM

Yup,
i agreed with you on Mutual Fund..

All agents always ask people to keep invest invest invest and by the time you retire...you should have a handsome returns..which i say Bullshit..


i got a colleague who invest thru this agent(about 10 years) and deligently invest every 3 month thru EPF and yet in the end when he retire last month..

His investment almost equal to return now if he were to sold back all his mutual fund last month

Crazy,isn't it? might as well let it rot in EPF which give much better miserable return.

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Added on May 8, 2009, 4:11 pmThank you for the elightment.




This post has been edited by MakNok: May 8 2009, 04:11 PM

You should scale back your risk as you near retirement, means sell of your earnings gradually and invest into bond based funds. If you just buy and hold then, you are not selling when it's high which you miss out all the opportunities to monetize your funds during the boom 2005-2007. If during the good times your friends did liquidize some of his funds, then he might be doing very well indeed. Like i say if anyone tells you that you can get very good returns with low risks don't ever believe them.

Well,
i can safely say in my case....all my colleague who invest in mutual fund are blind lead the blind and i am the only who do switching reGuarly from 2004 until i liquidted my fund at feb 2008

Seriously, investment link is a bad idea. (read about their annual charges and premium allocation and you will understand why)

I recommend Amanah Saham Wawasan 2020 or other Amanah Saham if you want other company to invest the money for you.

Well, I can help you to invest your money into the market if you trust me

i interested to knew which insurance company is that ???????????????????????

[quote=MakNok,May 8 2009, 04:09 PM]

All agents always ask people to keep invest invest invest and by the time you retire...you should have a handsome returns..which i say Bullshit..
i got a colleague who invest thru this agent(about 10 years) and deligently invest every 3 month thru EPF and yet in the end when he retire last month..

Hi there,

Pls dun look at high returns in ILP plans, ILP is designed in a way that you get the most coverage with the lowest premium (0 to 45 yrs), cos the cost of insurance will shoot up exponentially in the latter years so basically you get nothing or 10 to 20% of what you've put in at the end of the day.

For investment, go for UT.

For protection, get ILP or Whole Life or TermLife.

For savings, go for insurance endownment policies. That's it.

Ronnie

I said twice already, Hong Leong Assurance,

Excellent! A live example I was scratching my head tonite for expressing my points!

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Added on May 9, 2009, 12:16 amYes. Even if i dont, like the majority, i hope everyone learn the lessons explained here by TS.

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Added on May 9, 2009, 12:19 amPardon me, but, what say you?
Isnt everything good in up-market?!

This post has been edited by rockcrawler: May 9 2009, 12:27 AM

not sure why someone brought me here from my blog

http://www.malpf.com/2009/05/personal-fina...n-1picture.html

but I have stated my view here, ILP has its good and bad and if you don't understand how it works, you may find yourself in deep shit like this TS example, and I have also proposed a solution, keep the fund in there and wait 3-5 years, the mom will get back better return.

If cann't live with this kind of arrangment, don't use insurance to save money. keep ur money in FD if you cann't substain any market influence.

like other said, whatever ur mom got may not even be an ILP but an endowment. if that is true, please PM me all your mom personal details, especially if she has a copy of the illustration. If someone was promised an endowment return and didn't get it, I consider that as a big offense.

... and may do my best to fight for justice for ur mom's case ...

This post has been edited by mtsen: May 9 2009, 12:59 AM

No, some business do well in a up market and even better in a down market.

Bartender business theory.
When times is good, business is as usual.
Times is bad, the bar business is better, because many people want to drown their sorrow.


My first deal a 42k low cost flat, rental RM380 last year June.
Currently rental went up to RM450.
Too bad I cannot make this deal.

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Added on May 9, 2009, 9:10 amWhen one retire just at / after the crash of the stock market, all his retirement fund gone bye bye.

Many soon to be retirees in Singapore lost money in the Lehmen (lemon), one of them being interview on the TV.
One of them claim losing S$500k, after that the voice start to change.
Almost cried.

So you may want to tell your friend how lucky he is to get it back.
Some are even luckier, retire with US$1mil and few years ahead of schedule.

This post has been edited by jasonhanjk: May 9 2009, 09:10 AM

Which is why i wish that i wanna to point out that invest in mutual fund got risk as well.
it will work against you if think you can dump it in and just forget about it..

By retirement....hopefully when you wish to sell..happen to be UP market...if not another round of Bull which maybe might be minimum 5 to 8 years times.

I pity those who are CON by their fund manager that diversify their money into Unit trust will be much better than fixed deposit.
and promising it is a great fund for retirement....
provide when at that time is not a BEAR year....

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Added on May 9, 2009, 9:10 am
When one retire just at / after the crash of the stock market, all his retirement fund gone bye bye.

Many soon to be retirees in Singapore lost money in the Lehmen (lemon), one of them being interview on the TV.
One of them claim losing S$500k, after that the voice start to change.
Almost cried.

So you may want to tell your friend how lucky he is to get it back.
Some are even luckier, retire with US$1mil and few years ahead of schedule.

[/quote]

This post has been edited by MakNok: May 9 2009, 10:27 PM

I agree that ILP is misleading the policyholder. Just look at their sales kit and you will see the lies.
Usually when selling an investment link policy, the agents will show you a table from Year 1 until Year x (max maybe until Year 100). It will show premiums paid, sum insured, investment value or whatever.
Now... scan from Year 1 until Year 100. Look at the investment value. IT KEEPS INCREASING EVERY YEAR!!!! This is definitely a lie. We can't have economic boom every year for 100 years! There will be economic slowdown. IN THE LAST 12 YEARS, WE'VE ALREADY HAD 3 SLOWDOWNS (1997, 2001, 2008).
So please, if you're a good agent, then convince your agency to develop a 100 year table with between 10 to 20 years of economic slowdowns. Then show us the dips and rise in the investment value over the 100 years!

This post has been edited by simplesmile: May 10 2009, 08:21 AM

couldn't agreed with you more!!!
Agent should be honest....well...they have historical data which they can help investor as well.

Thanks. PM you details

[quote=MakNok,May 9 2009, 10:26 PM]

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Added on May 9, 2009, 9:10 am
When one retire just at / after the crash of the stock market, all his retirement fund gone bye bye.



[/quote]

[/quote]

MakNok,

It is STUPID for a person to be 100% invested in stock market. It is as simple as that.

Any normal and common financial planning will say

A) Have 3 to 6 months of emergency fund in bank / FD

B) Keep the money that you need within 5 years in fixed income aka bond.

Now, if a person follow rule (A) and (B), a person will NEVER lose everything with a stock market crashes. And, even if the stock market crashes, the person has 5 years to recover from that.

My favorite saying is INVESTMENT means that you can go to sleep and do nothing for 5 years and you will be fine. So, by definition, your investment needs to be able to survive a stock market crashes.

Dreamer

Most people don't really understand what investing really means.
Even financial planner today don't know either.

Investing is a plan.
No matter you live or die, stock market go up or down, housing price go up or down.
The plan must work in all scenario.

Scenario A is for a safe and secure plan.
Scenario B is for a plan to comfortable.
Finally, there is the plan for being rich.

To be rich, all 3 plans are needed.
Plan to be rich, plan to be comfortable and a plan for safe and secure.


I agree it's stupid to put all your money in the stock market, it's as good as jumping off the building without a parachute.
Bad financial planner do recommend that but it's the investor must take full rensposibility.

This post has been edited by jasonhanjk: May 11 2009, 08:35 AM

No offense. I brought you here from your bloy to pry for your reply. I like your blog and hope to get your opinion & attention on this issue. Thank you for your time.