solarwing,

i won't go for either one.
i do not want to get locked down with takafulink dana equiti.
what is the accidental death/dismemberment rm20000 + rm2000 for? is this amount payable if something happens? rm22000 is not a lot.

i would go for a plain PA, then get a non-ILP life insurance + medical card. you should find out how much a non-ILP life insurance + medical card costs.

good luck!!

may i know what is the differ between tranditional insurance and investment link insurance in terms of advantages and limitation.

i've compare my insurance package with my friends. Mine is tranditional where i have to pay a fix amount till the end of policy (if not mistaken)

while most of my friend buy investment link insurance.
i found that normally their payment is cheaper than mine for same coverage, let's say 200K life insurance.

Next, a friend told me that she only need to pay for 20 years, after that she no need pay for the insurance but she'll still be under protection.

i agree with poolcarpet, also you will be able to easily adjust the amount of cover of time. you will find that such an option is rather superior to the plans you have shown. also you should buy directly from the company if you feel you can handle a claim. the agent comission is quite high (PA with GI 25% p.a.!!) and this will save money for you.

A traditional insurance policy is one that guarantees you level premiums and returns (in most cases) based on age of entry. It may be slightly more expensive (if it includes critical illness coverage) but usually serves as a form of forced savings. As it usually comes with cash value, after a while you can allow the cash value to pay off your insurance charges at the expense of your returns.

A investment linked policy on the other hand is a good choice to provide high protection at an affordable premium and is usually what is called as a complete package plan which can be customised to individual needs.

Traditional and ILP both have their benefits.
ILP you can get big protection in young age with cheap premium. However, when we are getting older, the insurance charges will increase drastically. Thus, if you were paying quite a low premium for that, your cash value inside the policy might not sufficient to cover the insurance charges and riders.

Traditional policy might be more expensive compared to ILP. However, the premium is fix because it do not have insurance charges for that. Another benefits is that the death benefits will continue to increase with age. Lets say you buy 100k protection at age 30, the amount of protection will increase with the cash value and it might reached 400-500k, and with the same premium you pay. Like me i bought a life insurance at age 1 about RM20 per month, now i still paying RM 20 per month and the protection is massive.

Besides, traditional and ILP both have premium holiday. Means you still can do the same thing as your friend after paying for a certain years. After all, Traditional or ILP is both depends on your needs.

Does that mean ILP payment will increase according to age group? same like medical card?
Is that a chart or details regarding this increment?
I'm quite sure that some agent may not highlight on this part because I never heard my friends mention that.

I'm worry my friend may not able to afford the ILP in her later age since it already mentioned that the insurance charges for ILP will increase a lot.

Vandoren,

The insurance charge is a figure based on risk factors associated with a particular gender and age.

ILP premium payments don't increase with age but the amount paid (insurance charge) by selling your investment units would increase many fold by the time you reach 55 etc. This insurance charge table is usually provided in the ILP quotation from your agent.

You can assure your friend that her premiums would remain as it is but she may not be able to afford newer policies if she buys at an older age.

Cheers,

HH

Can you explain on the highlighted part?
Just an example, my friend bought an ILP
let's say my friend paying 100 monthly for a coverage of MC - 90K, life - 100K, accident - 50K.

so, by the age 40 or late 50, she will still need to pay 100 monthly only to maintain the same coverage?
sounds like ILP is good that we pay cheap to get big protection?

then, i'm still not sure what's the traditional insurance's advantages over ILP.
Can explain on the below case?

Insurance charges are charges that they charge on your protection and also riders attached. Lets say RM 100 monthly now and his age is 25. Insurance charges and commission will be deducted from the RM 100 and the left will be used to buy units for investment. Because his age now, his insurance charges will be lower than the premium, and therefore you can see some growth in your cash value as there are money left to buy investment units. However, insurance charges might increase with your age just like medical card. You can still continue to pay RM 100 premium, but if the insurance charges is more than RM 100 a month, then company will sell off your units to pay the insurance charges. So now, you can still pay RM 100 BUT your cash value will decreases consequentially until there are no more investment unit in your policy. That time, you can choose to pay higher premium or lapse your policy. That's why its better to pay higher premium now to build up your cash value.

ILP:
Pro- Able to enjoy higher protection with low premium at low age.
Cons- The insurance charges will increase along with age, and your value inside might be eroded.

Traditional :
Pro- The premium will never increase, no insurance charges incurred. The death benefits and cash value will increase with your age.
Cons- Premium of the same protection might be more expensive than the ILP

Conclusion, traditional and ILP run together would be the best. Just my opinion.

This post has been edited by weikian: Jan 13 2010, 05:13 PM

thanks all for the explaination
i understand that the best insurance is the coverage that suit our needs with affordable payment.

however, I'm not sure how many agents out there are sincerely recommend suitable insurance to their clients. i believe that some agents only wish to get high commision regardless if the customer really need the insurance/saving plan.

just my 2 cents~

Stated nicely and to add one more point to weikian's post, returns in traditional policies are usually guaranteed as they reflect cash bonuses as opposed to ILP returns which is market condition dependent ie usually there'll be fluctuations.

I'd also say a combined portfolio of traditional and ILP is good way to assure high protection and high savings. As there's no best policy around, it all depends on how these products are to be matched to individuals needs and preferences.

Cheers,

HH

This post has been edited by HHalphaomega: Jan 13 2010, 05:40 PM

Yea, there are no best products in the market. Agents are the most important factor to cater a plan that will suit their clients' need and affordability. Most importantly, client should be able to get to the agent when they need them the most. That's why they get the commission for!

Totally 1000% agree. good point

weikian,

true. but ILP usually suffers from overestimation of profits and subsequently adjustments in premiums.

you sure all tradional plans are guranteed fixed premiums. i am almost certain some of the plans i looked at allowed for adjustment based on overall portfolio claims experience.

vandoren,

i agree. you should look for yourself or find someone independant. agent will maximise comission based on the products he/she can offer. that alone already limits the choices to one GI and one Life company and their products if not mistaken

i still stand by my point that even if profits are guaranteed in some way they will be underestimated by default and because risk assesment dictates it. you should always be better off investting the balance yourself - even if you only buy gov bonds / ASM etc. which probably reflects tradtional policy investment to some degree. anything else would make absolutely no economic sense. and the last time i checked insurance companies do employ economists for all those kind of calculations...

Fully agreed with you PJusa. Most insurance policies with cash value or returns will show you the 'best case' scenario. I have seen proposals where the return is 9% and 2%. Obviously, the agent will highlight the 9% but I personally always look at the 2% column

No one has yet to show me any insurance plan which can give similar or better returns if i were to invest the same amount in FD, or if i were to buy a cheaper insurance type with same coverage, and invest the difference

poolcarpet,

it's true and the reason is simple: they just cant predict the performance for the coming say 40 yrs so they need a very very conservative estimation (and keep the higher profits with traditional insurance).

Hi all, i hv few question to ask b4 buying a new policy, am considering of buying 'all in 1' type:

1. Ist a reliable agent a main point to consider?
2. How to justify if d agent told u the premium of ILP is fixed, no more worry increasing of premium in future, is this believable? anything in the policy agreement can prove thier words?
3. For term stand alone medical card, heard most of ppl claim that no guarantee renewal, i mean if u claim the illness b4, when next year renewal, the insurance company usually will not cover the claim illness or else they will increase ur premium for the coverage. Is this a main point to consider if choosing a stand alone medical card, no matter which insurance co.
4. i wanted to buy a policy with life, CI, TPD & rider of premium waiver, plus some savings and medical card(R&B RM150), option of buying ILP (all in 1 policy, benefits in premium waiver if something happened, but disadvantage of lower project return, risk of premium increase) or traditional type (Life+CI+TPD+higher of guarantee savings/returns) + stand alone medical card(disadvantage of no guarantee renewal & premium may increase after certain year)
5. for ILP, how do we know the fixed/standard rider, which mean different agent may apply different rider into the plan with different additional premium.(for example, a ILP, different agent with the same insurance co. will quote different charges, how do v choose the right rider to meet out needs?), what is the basic rider for a ILP?
6. Period of Term until age 70/80/99yrs is consideration point?
7. For ILP, the coverage of Life must be greater than CI?

Sincerely need yours advise or opinion, tq

Hi Coolberi2,

1) The answer is sure to be yes. Not only the plans you should compare, but also the responsibility of the agent. Especially when it comes to ILP products. What I've been seeing is a lot of agents out there keep selling ILP plans, but themselves not really understand how does an ILP product actually works.
2) Fixed premium is just an illusion. Since your policy fee and the cost of insurance is charged by cancellation of units, you won't notice the changes until your units is not enough to pay for the insurance fee and you're forced to increase your premium. Investment return of any ILP product is not guaranteed so we can not guarantee you that your premium will not be increased in future.
3) Most of the insurance company offer guaranteed renewable medical card, including ING. Confirm with the agent first.
4) Not understand your question. Are you asking whether you should go for traditional life or investment-linked? For those people with a low risk tolerance level and don't know how to monitor the funds investment, go for traditional life. If you choose ILP, make sure that you always monitor the funds performance and able to do a portfolio re-balancing when necessary. Lots of people buying ILP without monitor the funds end up losing their money there.
5) Insurance agent will give you advices and explaination on the riders, but it's you to determine whether it can meet your needs.
6) I think this will base on your needs. How long do you need the insurance protection to be with you?
7) Yes, the life coverage must be greater than its rider. Actually the basic plan is sharing its sum insured with its riders. When a rider is being claimed, the sum insured of the basic plan will be reduced.

Please reply to cheahyang_0@hotmail.com if you have any inquiry want to ask me. Thanks!

My answers to you:

1. 70% on product and 30% on agent. Because life insurance is to protect you. If agent does not service, you can do yourself in their headquarters although it'll be a bit troublesome.
2. From the illustration you see i ILP is fixed. Because ILP works on unit cancellation, and the cost of insurance is not guaranteed, and if the performance of the fund is not so good in the future, you may need to top up to get your ILP working. To see how it works, pls attached a copy of the illustration of your ILP proposal and I'll teach you how.
3. There are life stand alone card and general stand alone cards. Life cards are normally guaranteed renewable up to a whatever age the card expires. For general cards, it is normally not guaranteed renewable.
4. Take note when you buy a traditional policy with premium waiver because a premium waiver will normally waive the basic death portion. The riders ie. CI or Medical Card or PA premiums u still need to pay. Traditional policies will be priced higher for the same coverage as compared to ILPs, but the advantage is you'll have consistent returns at the end. ILP on the other hand will be cheaper in price but returns are not guaranteed. So my advice is, how much protection you need and what is your budget, then only decide what policy to get.
5. Look at their sales illustration and ask them what every rider means. Yes you are true that different agents from the same company may give you different riders at different prices. But you don't need to worry because you may not need all of them. The rule of thumb to choose ILP is to look at the cash values projected at the end of 30 yrs. If the cash value is zero at say 25th year, then you will have a tendency to top up. Again this is based on illustration basis maybe 3% to 8% every year. This only serves as a guide. It may go higher or lower depending on the economy.
6. For life and CI, the term is normally 100. For med card is normally 70, 81 and 100. So on the med card, do look for every pros and cons, meaning if a card can cover you up to 100, but lacks this and that, then whats the point? Again in M'sia, the sick age shall be in the region of 50+ to 70+. So judge this for yourself.
7. No not true. Depend on which company. For Great Eastern, AIA and ING, the life must be greater or equivalent because their CI rider will deduct a portion from them when a claim is made. For Allianz and Pru, you will have the option to seperate out the CI rider meaning if claim CI, it wont affect the life portion. These are the companies that i've gathered information so far by reading their policies. GE, AIA and ING may have new riders, so agents from these companies do confirm ok.

I hope my lengthy explaination helps you.

PM me if you need a quote for comparison ok. I'm from Allianz.

Thanks.
.

This post has been edited by chew_ronnie: May 10 2010, 08:35 PM

I used to work for Intel, the health benefit was awesome,plethora of panel clinics and hospitals provide outpatient treatment for me n my whole family.

Currently I'm with the civil service, hospitals and clinics are plenty, but the crowd is just horrible.

Any suggestion on how I could insure my whole family especially on outpatient treatment e.g flu, fever etc.