cherroy,

please stop commenting and advising ppl what to Buy, when your knowledge abt insurance or the type of plans offered and its features are full with error.

do share what you know best, with facts instead.

if you are a unit Trust Agent, property Agent, or in direct selling and you are here to,convince ppl to Buy term insurance so they can invest with you, then you should write abt how we can invest and become rich.

you are very wrong, what you have written above. Do not write something you do not really know abt and make yourself seem like a fool. I know you are not.

Good decision Whyme.

what you are doing is enhancing your coverage and also reaping the benefits of what an inv linked policy has to offer. Diversification, perhaps. Or you are restructuring your policies according to times.

if you already have term, now knowing the shortfalls of coverage of your term policies- once term ceases and you have to purchase a new policy at older Age, it will be expensive or insurability at that point of time may also be a problem. Like cherroy mentioned, after 20 years, then how? Surely need to buy a new policy if we are still around. Seems cheap now, but very expensive later- the advise is basically penny wise pound foolish. Term policies are indeed good but has its limitation, hence cheaper.

you can add investment amount on top of your inv linked policy, this portion will be utilised for investment only. You may even add a waiver for this investment portion, at a very small premium. You decide if this is worth it.
yes the returns may not be guaranteed, but which investment are?. But from,your replies, you seem to know abt how it all works.

Could you explain what is wrong on cherroy statement,
As the explanation above is exactly what I understand about ILP

yep pls explain

Please explain what is wrong with my simplicity of explanation how an ILP works.
A fool like me willing to know.
@roystevenung

A person intended to buy ILP, (without knowing the person situation, how much insurance the person already have etc) then it is a good decision....

Seems like a fool like me need to learn a lot..

Buy term life, min insurance ---- bad decision
Buy ILP, good decision.

This what I had learned...

This post has been edited by cherroy: Jun 11 2014, 10:22 PM

C'mon bro, give him the chance to explain....

so you do know what whyme needs? Or you were highlighting the good of term ins only based on your personal preference, and also implying inv linked is "investment" and not so much of insurance per se? Even if whyme has some term ins and he wants to Buy inv linked why not? You cant even ubderstand what i wrote.. You think you know better than whyme or was he just asking abt allianz?.

roy would not dare say anything abt the blatant errors made by some of you, although he is very experienced and knowledgable in this mattrr because some of you are his clients and he sold what what you wish to Buy, and he gets alot of Business here. This is his platform and he has been posting here since when?. I say it as It is, 9 years in this Business and im not here to advertise myself, to solicit Business. I write and share what i know because this is my passion-

hope you are not bothered with my reply, because if your advise and facts are right, it will be here for ppl to read. Then ppl can say im a useless wealth planner right.

Chris, u said cherry made 2 mistake, first was to assume Wgat the previous forumer wants and second was her explanation in a macro sense on how ILP works.

Can u please point out which part of her explanation is wrong.

This is to benefit everyone, including cherroy herself.

She may not know it herself. After all, neither.u.or Roy have openly said, buy Prudential or buy from me.

That's why whenever someone has query on insurance, I summon Roy.

Cherroy,

if unsure or wrong, just admit or say "oh, i see..".

if you read whatever i have written previously, i already mentioned all plans be it term of ILP ha its own strength and weakness. And it has to be sold according to the clients' need based on several issues.

you make It as if ILP is only meant for investment, and term is the best, and assume whyme has term so why bother with ILP, then you go further with your breakdown of how ILP works. The ratio 90% of it goes to investment in,the first year etc etc.

then you mentioned since he has a la carte of plans (term ins); so why need to Buy ILP? Well ILP can be packaged in a way whereby its comprehensive, not for investment sake. He could be wanting something comprehensive on top of all his individual term,policies and a plan that can give him possibly higher returns should he decide to put more of his allocation to investment.

you believe what you want, and Buy what you want because its your Money. But please do not give false information rgd ILP plan here by making it as if its an,investment focused plan, not so much of an insurance plan.
this half truth explanation of yours will make ppl dont even consider ILP if they want to purchase insurance because they think ILP is all abt investment and the 'High risk' involved, right?

you May be an Agent after all, those traditional type of Agent stuck,in the 80s. Selling lots of term policies to your Client and selling unit Trust as side. Which is good. So if you know more abt investment, talk,more abt investment but dont act as if you are an expert here. Yes i have UT license, but this is abt insurance. So im here i dont go act smart at other topics where i am half past six.

* any of you May ask your Agent from any insurance Company for the full quotation to see how ILP works, the premium allocation and features of this plan. That explains.

This post has been edited by ChrisGood: Jun 12 2014, 09:10 AM

If someone misunderstand I posted what Wgat wants, then I apologise for the mis-understanding, but as far as I remembered, never did I stress Wgat should or shouldn't get an ILP, I just ask back an question, why want ILP, then the forumer explained the premium is the same, then I explained how a basic ILP works that cost of insurance is never the same, just how the premium being allocated in between that make ILP premium the same.

Yes, please post any wrong about the post regarding the ILP allocation of premium in between insurance and investment.



Since when I said ILP is for purely investment? and advise people not to buy one?
(May be vested interest person too sensitive )?

I just explained the macro part of how ILP works.

I never advise anyone not to buy ILP, I just ask why the forumer want ILP after having other insurance in place already.
And the forumer explained want ILP because premium is the same throughout, while term is not, then I explained the macro part how ILP works, and cost of insurance is never the same in ILP, although premium of ILP is the same, just how insurance allocate the portion in between insurance and investment.

I never act an expert here, nor any vested interest.
I never tell people that whatever decision to buy term or ILP is a good decision.
There is no such thing of good or bad decision in purchasing insurance, it is personal matter, needs and preference.

Instead telling me wrong and act like fool, I still do not get an answer what is wrong in the macro part of explanation how an ILP works.

Any wrong I posted, yes, I will say thank you for correction, I gain another extra knowledge.

Some slight amendment here, if I may based on my understanding about investment linked insurance.

Eg.
investment linked premium 1000
When started time, the first few years, not 100% of your premium goes into investment, of RM1000 for first year
maybe RM600 is allocated into investment converting cash into units (based on unit pricing at time of purchase), each month units are sold to pay for insurance charges, say if insurance charges are RM100, and unit price at that time was RM1, then 100 units be sold to pay for the insurance charges of RM100.

As you grow older each year, the insurance charges keep going up following your age. But that does not mean that you will have to sell more units depending on how quick your unit price increases. If 1 year later, your unit price becomes RM 2 and your insurance charges gone up to RM120, you will only need to sell 60 units each month to pay for the insurance charges. However, unit price may also go down when market is not good, this is when you have to sell more units a month to pay for your insurance charges.

Hope this is clear.

This post has been edited by zest168: Jun 12 2014, 03:50 PM

this is the actual way of how ILP works (i think you already know).

what cherroy said is not wrong, but it's not the most accurate way of explaining of ILP works. Having said that, it's easier to explain his/her way to non-insurance literate people. i kinda failed in explaininng the basics of ILP to a friend.

also essentially going back to the basics and explaining how ILP works, creates one problem at point of sales... they will ask... only 40% allocated? what happened to 60% unallocated premium??? WHAT?? 40% goes to your commission???

so, cherroy explanation is not wrong, just simplify for layman term which easy to understand. Although zest168 explain further, and I can grasp the concept but don' think can clearly explain to others.

Cherroy has explained it in a good layman concept but not the whole detail of the plan. Anyway, what he said would be good enough for a mediocre people to know how it works by comparing it with traditional life.

Spoiler for Chrisgood

--
Moving on, all insurance works on the principle of risk transference. The higher the risk, the higher the premium.

The risk here refers to age, gender, occupation, smoking status, health status, coverage amount.

The same principle applies, be it term or ILP or whole life since the insurance charges will increase by age due to our risk has increase over the years. Its like insuring your brand new car vs a 20 yo car.

The only difference is whether the plan do accumulate cash values so that the policy owner do not need to worry of having to fork out more in later years.

An ILP plan consists of 3 accounts. The Basic Unit Account (BUA), The Protection Unit Account (PUA) and the Investment Unit Account (IUA).

The BUA consists of riders like life/Critical illness/Accident cover. The PUA consists of riders like medical/waivers/hospital income etc.

Both BUA & PUA starts with a lower allocation to buying you units, 40% and gradually increased to 100% after the 6th year.

The IUA however, starts at 95% allocation even from the 1st year of the policy, 3% agent commission, 2% admin charges.

Hence, if your purpose is to buy protection, buy more on BUA/PUA account.

If your purpose is more towards putting it as an investment/regular savings, do it in IUA. It provides higher allocation than BUA/PUA.

Of course you can see the difference between the agent commission, most agents will be tempted to put more on BUA/PUA and tell you its for investments.

One thing that you need to be aware of is that when the funds in ILP grows, so will the fund management fees. As such you may need to do 'something' to keep it at a min (which I will only tell my clients)

I think the confusion was because whyme was initially looking for investments which later he clarified that he was actually more into protection.

This post has been edited by roystevenung: Jun 12 2014, 10:03 PM

roy, always the gentleman who does not resort to insults or name calling. the purpose of such a forum is to share knowledge, experience and opinions.

while technical knowledge might be classified as right or wrong, experience and opinions have no definite right or wrong.

the way i see it, in the virtual world, we are all equal.

a moderator is not superior to a new member and even an insurance agent might not know as much as a non insurance agent.

so, lets continue to impriove the life of fellow forumers by sharing what we know.

cheers guys

If ur fund too high to avoid high management fee, u can either change to bond fund with lower management fee.

Bond fund has very low returns compared to equity funds but of course. Lower risk also.

Bond fund has very low returns compared to equity funds but of course. Lower risk also.