Hi guys, I read one article saying the insurance company can increase ILP yearly premium as they want in a few years time. in accordance to the insurance charges schedule.

Is this true?..

I just bought an ILP a year ago and came across  the article yesterday. I am afraid that my premium will increase in a few years time.

umm....this seem worrying to me le....
i brought 1 insurance recently...think is life insurance...purpose same as the mortgage insurance...but this one got cash value...if compare to the mortgage insurance....
the agent said will at least get 5% interest....
if house loan finished..let say 20 years......at least can take back the $$ put in for about 20 years...mayb will loose some $$ only if compare to mortgage insurance....
dono how true is it....

Sorry newbie here, but when it says maturity, does it mean you withdraw the lump sum of cash and the policy is no longer valid?

i've studied one of Allianz's new ILP, this is what i understand...

monthly premium consist of :
1. allocated portion (65% @ 1st year, 90% @ 2nd year, 100% @ 3rd year onwards)
2. unallocated portion (100% minus allocated portion, this is to cover insurance company's cost, as well as the bank's commission)

allocated portion will goes to:
- RM5.00 per month for service charge
- Cost of Insurance = risk factor / 1000 x sum assured / 12 months (risk factor differs from company to company, your agent SHOULD be able to tell you)
- the remaining balance will goes to unit purchase in selected funds

e.g. cost of insurance : 1.18 (risk factor for 30 yr old non-smoker) / 1000 x 100k (sum assured) / 12 months = RM9.84 per month.

make sure your agents are transparent enough to tell you where have your every single cent spent, to avoid disappointment like what have happened to the ts.

answering to post#50 above :
since risk factor will increase in according to age, hence cost of insurance will increase when from year to year.

however, cost of insurance increase =/= premium increase. i.e. your monthly premium will remain unchanged as long as your policy does not lapse (for allianz's case, up to 100 yr old). which means your money left (i.e. allocated portion - RM5 - COI) will decrease over times.

happy insuring

do you mean that 7th year and above the total amount we paid yearlyis for premium and not to invest?
Means only some portion of the premium during 1st to 6th year will be invested?

Thanks for the reply guys....

Any advice for current ILP holders?

Should  I surrender my ILP, since I am afraid the premiums will be too much for me too bear in the future, and start looking for buy Term or  whole insurance etc..

Read my comments and would appreciate if you could address my concern on the last paragraph in regards to losing out which I mentioned.

chew_ronnie,

There is a CATCH here which you need to bring up.  All those number are ASSUMING that the I (investment ) portion of the ILP return X % per year.  So, what is that X%?? The last 3 years, KLSE went up 30%.  If you assume that X is 30%, it will DEFINITELY not happen.  And, if the actual return is much much lower than X, I would bet that ILP will cost a lot more than term insurance.

So, what is X assumed in your ILP quotation??

Mark my words.  We will see a lot of screaming and crying from people buying ILP in one or two years.  They THINK that they got a bargain.

Dreamer

chew_ronnie,

<<X is assumed at 3% yearly. >>

1) That number does not seem to be correct. It is correct as that's the worst case scenario in my quotation system, but again this may not be the worst case in the real world.

2) What happen when the return went negative for 2 years?? It doesn't matter if the market is bear for 2 years as long as the Cost of Insurance is not higher than the premium paid. So it comes back to the most important point that buying ILP shall be in a monthly basis. Pls check this website: http://kclau.com/insurance/how-to-avoid-in...d-policy-lapse/<<the whole insurance industry is moving towards ILP, and traditional plans shall be phased out very soon. >>

3) That simply mean this plan is GOOD aka MORE PROFITABLE for insurance company.  Which means it is BAD for consumer. Whether its more profitable or not, I dunno. But all I know is, consumer has higher risk than the insurance company. But this is going to happen in the near future where all insurance companies will be selling ILP products. Even the very conservative ING Insurance has just launched their new ILP, so we see the future trend here.

4) A 2 years bear market will wake people up very quickly.

Dreamer

Really? If that happens, yes I won't buy insurance from that company. I'm sure there will be other who will spring up to offer traditional. When there is demand, there will be supply.

Sorry, I'm not into gambling or betting but investing. If that days comes, I will raise funds to start a insurance company for like minded people who are investment savy and want to have insurance security. BTW, I think I will win if I bet.