Change to monthly then you can practise this term called “dollar cost averaging” In the ILP investment.

Monthly agent commission collected every month instead of 1 time.

Basically I would encourage policy owner to go for monthly to practise this term.

Only applied on traditional plans. Traditional plans for par or non par products. ILP and universal plans remain the same as monthly or yearly.

Login to e-connect and find us the plan name. (Smart series or great series?) Then we can advise further.

This post has been edited by Ewa Wa: Oct 30 2020, 02:50 PM

changing of benefit may / may not change the amount of premium payable sometimes, it could also mean you pay slightly more as a newer plan offered may have more benefits and cost slightly more than your old plan, but if your policy has enough account value, they may sometimes not require you to top up any extra amount for it.

By upgrading to a newer plan, it also means you are dropping the older coverage should the upgrade is approved. Thus you are not paying for 2 benefits.

The COI (Cost of Insurance) for both Standalone and ILP increases overtime, with the exception that ILP already factored in the COI payable into it's overall yearly annual premium contribution. Hence as a consumer, you only pay the same premium year by year without feeling the pinch of paying at an incremental rate such as the standalone medical policies.

There is really no point to show any example / comparisons if you understand the above actually. But I'll attach one for educational purposes.



This post has been edited by lifebalance: Oct 30 2020, 03:35 PM

The new AIA medical rider is A-Plus Health.
Yeah, better coverage, of course premium will increase. However, for a lot of us between 25 to 40 (depending) the increase in premium on the old rider vs opting for the new rider is relatively the same. So then we have the option between upgrading or staying with the old coverage, and pay the extra premium.

ILP or not, the coverage is the same, unless company offer some extra benefits (usually to ILP).

In ILP, there are 2 things to look at: the premium and the cost of insurance.
The premium is to cover the cost of insurance and also to solicit for some market returns.
ILP is called a Level premium product, which means the premium is kept at a constant level.
Considering the COI rate remains unchanged (rising according to projection), the premium coupled with the expected market returns should sustain the policy to age 70/80/100, whatever is chosen during application.

ILP is just unit trust + medical.

It doesn't deter the medical cost premium or COI increases.

While the unit trust or investment portion is not guaranteed to make a profit.
It can result in losses as well especially in current equities market condition.

Those projection in the proposed illustration is made based historical data, it doesn't means future the investment return will be the same, nor guaranteed to make a profit.

ILP premium is structured and projected to the same if COI + investment return come in as projection, by drawing down the investment portion to compensate the rise of COI.
Just like one pay extra more compared to standalone especially in early year, then latter years, the extra portion + investment return (if) is used to cushion the rise of COI.

One can always check the ILP portion or specific unit trust invested fund fact sheet to know whether the investment is making money or not.
If it makes a lot of money, then probably can cushion the rise of COI.
While if makes a loss, then double whammy situation, rise in COI + loss in investment.

Ya for me it is even better to pay monthly because I do not have to pay a lump sum in one shot and also able to do cost averaging into the investment fund

The transaction fees you mean, referring to credit card % charged to merchant? If so it is a fixed % whereby in the end is the same amount in absolute MYR isn't it? Or you are referring to another thing?

The policy is more than 10 years so it has been increasing due to medical cost inflation rather than tekan agent for lower


One more thing, say we want to pay the coming premium and we have cashflow problem. Are we able to withdraw cash from our cash value / investment linked fund? Rather than letting it grow until like 5x my annual premium value there

No, that's the policy charges from the insurance company.

You are allowed to withdraw the fund at any time with min RM1k balance in the account.

You may be required to top up once there is insufficient in the policy to sustain the policy.

The purpose of the money is in the policy is for the insurance company to reinvest the amount. Whatever you plan to do may defeat the purpose.

I apologize if I overstepped any lines. Totally was just sharing an example.
There is a premium holiday option for all ILP policies.
How it works is you stop payment, and the policy continues by charging the COI to the fund value.
One thing to pay attention to when exercising this option is to ensure that the premium holiday option allows the company to charge the COI for policy riders (such as medical rider) as well.
You can also withdraw from your fund value at any time too, according to the minimum balance, minimum withdrawal amounts set by the company.

Someone by the name of tyenfei explained the concept. Not sure if it's fully digestable. But there's actually no real monetary impact of annual vs monthly from charges point of view usually. of course there's that, do monthly, dollar cost averaging old story, that still serve as many people's guiding principle

EXCEPT, there is another thing. Something called policy fee. Actually some insurance companies charge HIGHER policy fee for monthly, example RM8 a month because you pay monthly but may charge you RM7 a month if you pay annual.

So this can be, but MAY NOT be the reason. i recalled checking out GE, dont have this but i can be wrong. so maybe just additional theories for other who have ILP who may ask this.

PS: the above applies to IL only.

I used this many many times before in my previous explanation. You can view ILP + medical as chicken + rice in the chicken rice.

Chicken being the medical, rice being the ILP life portion. For customers who buy chicken rice, i give them chicken drumstick (best part). but those who come to buy chicken only, i give chicken wing (the "worst part") only.

of course the price of chicken rice > chicken only.

over the years, it is likely the total cost of chicken rice is likely to be higher. but the thing is, you will notice all the standalone medical are chicken wing. can't really compare chicken wing and chicken drumstick. if you want to compare ILP and standalone, this require alot of work, which i'm not sure even any agent can objectively do the comparison for you. they know drumstick is better. but they probably can't tell you wings is cheaper by how much, if at all cheaper although in theory it should be cheaper.

not that easy to compare, you pay me, i compare and do independence advice for you la. PS, i bukan agent yo.

This post has been edited by adele123: Oct 30 2020, 04:22 PM

Actually this is the 2nd increase since i bought it about 7 years ago meaning will expect premium increment every 3-4 years time?
Given this year economic situation but how about the first time increase 3-4 years ago?

Thats why agent wont show comparison..

Just wondering since during quotation time agent song song show the premium chart showing steady same premium for 30 years (ofcourse got fine wording says premium may be revised according to market price) but im expecting maybe 10 years increase once or maybe none.
So what i wonder is, ILP quotation also has premium chart showing the premium amount every year. Does that amount also may be revised according to market later or fixed as per the quotation?
Because if standalone premium is fixed as per quotation it looks like standalone is much cheaper in the long run.

Actually our agency do this all the time.

Klo nak, I tunjuk u lah

Standalone premium also not fixed. In the find print, it will always say company reserve the right to adjust the premium, and have to give 3 months notice to the insured by way of a written letter.

This post has been edited by JIUHWEI: Oct 30 2020, 05:52 PM

Understand but with the increasing annual premium we have burden paying it

So with the pool of fund at RM30k++ I am thinking why not take out like RM2k per year to ease the burden rather than seeing the pool grow there

And with only RM2k per year we can continue to withdraw to compensate the premium for more than 15 years while the policy is expiring in 10 years++

Afterall just finding a way to help easing the stress to fork out more to sustain my mom's policy but thanks for your input too

eh no need to apologise I am also exploring the options to continue paying the increasing premium while income has been stagnant or even reduced
Thanks!

Alright, 👍

Unless I read wrongly, you are implying that you want to withdraw just to top up the increased premium. If that is the case, it may not be necessary. Any shortfall in your premium to pay the monthly/annual Cost of Insurance, will be auto deducted from your 'pool of fund's. That's the basic principle of a investment linked policy, you top up today for tomorrow's increase in cost. Just need to take care, don't run out of the pool of money/cash value before your expiry of the policy.

Yes you got what I wanted to do right

eg. premium now RM5000 and revised to RM5600 in 2021 so I plan to take RM1000 ~ RM2000 from fund depending on how much next year income from other sources

But when I asked the agent the answer is you need to pay the premium as stipulated in the letter of revised premium, no way to change so only can withdraw to use the fund

oops, i think i got reported because i was "soliciting" business.

I think it's not fair to ask sales agent to to compare and make the chicken wing look like drumstick. maybe i'm wrong to said what i said previously but most people like chicken drumstick right, so they ok to eat chicken rice not just chicken? <-- back to my chicken rice analogy

i actually dont understand your question but i think in part you haven't fully be able to visualise the ILP plan. even cherroy's unit trust + medical does not seem quite easily understood by most people.

to keep it simple, you may be quoted RM2400 per year and you are expected to pay this same amount every year. Despite best effort from agents and insurance company, this 2400 may not be sufficient to last you until the end of the coverage term.

one of the most common event is medical repricing. HOWEVER, even if i own a policy that does not have medical, it is still no guarantee. bad market return, couple with late payment or mispayment, you may receive a letter next year from the insurance company, you may need to increase to 2700 per year.

Think for a moment, imagine, if you stop paying your house loan during your moratorium and you will want your loan to finish within the same period, what do you think you need to do? you gotta increase your installment.

as for standalone medical plan, the premium quoted is likely based on current experience and assumption, few years later, the pricing that you see, will no longer be applicable and will go up. it's not fair to merely say standalone cheaper in the long run without looking at other things. If really want to save money, buy co-insurance/deductible. frequency of happening is definitely lower



i dunno how to explain in the simplest manner. Imagine you have RM10000 in your cash value now. You Pay RM5000 every year. the medical COI is RM6000 every year. and you have 11 years left until the coverage end. assume cash value grow at 0%.

so year 1, you pay RM5000. your total cash value now is RM15000, your COI is RM6000, so your cash value will decrease to RM9000
year 2, rinse, repeat, decrease to 8000
year 10, decrease to 0
year 11, no coverage because decreased to zero. To avoid this, you can immediately pay 6000 before the insurance company terminate your coverage and you still can enjoy coverage for year 11 despite no cash value. because you have enough charges for year 11.

What happen in year 1 and year 2, is automatic. that "Withdrawal" of RM1000 in depleting your cash value happens automatically and does not need any explicit action from you.

that's the beauty of investment linked plan.

This post has been edited by adele123: Oct 30 2020, 09:37 PM

Check with your agent again.


This post has been edited by Cyclopes: Oct 31 2020, 02:20 PM

Hi Adele, yes I understood the concept from what you had explained earlier

However, since Prudential had sent the letter informing the premium is gonna get revised in 2021 to RM5600 I wonder I can continue paying RM5000 and whether Prudential will charge the balance from the fund

Your case I supposed the Insurance company did not write you a letter saying the premium is revised

In my case, Prudential had sent the letter informing the premium is gonna get revised in 2021 to RM5600 I wonder I can continue paying the old amount and whether Prudential will charge the balance from the fund

As I am paying online, the epay system will die die state the premium amount decided and I can only pay that amount

If the company die die want u to pay the amount eg 416 to 466. Then ur will have debt Of arm 50monthly. They will use ur fund to pay the difference since u r using online banking.