is ilp that bad?

why don't you throw that $3k/yr into your "self-managed investment portfolio" then?

didn’t research much bad then so I thought it’s just a normal insurance! I only realised it after what it meant\~\~\~

if you can choose would you rather have more money or less money? if you need insurance just get insurance lol

Whole life is likely also gonna be coupled with investment component. It is really quite bad given what you could achieve with 3k a year... A 6% conservative estimate yield via index funds vs a 5% yield (a questionable 1% less return after accounting fees and performance), will net you 5k less in total portfolio value after 15 years if contributing 3k a year. The optimal calculation is buy term life insurance (which is cheap) till 65 years old. And invest the rest. The hope is, with the difference that you invest, you essentially self-insure after you're 65...

ooo very helpful insights thank u! I did heard a lot abt buying term but the traditional mindset in me fear having to pay for my bills after 65 hahaha

Thats why you set up a giro and it ends after 65 haha

oh oh very helpful! I think i rlly didn’t do much research and think it through bc in my brain it’s like i paid 12k and i get back 7k so its about 4+k for insurance the past 4-5 years which sounded cheap 😭😭😭

Hi Agent.

lol not an agent and will never be. I am thinking of switching out to term/whole.

You can ignore the figures and instead just look at the fees they charge that are not the fund level fees. That’s the extra price you pay to the insurer only just to package this deal.

must understand the mechanics of different types of plans. ultimately, anything you get from an insurance company will have some form of insurance, be it whole life, term life, and even ilp. 1) Whole life: Pay for fixed period eg 15y, covered for whole life, usually with a guaranteed portion after x number of years. (have to see details), but usually not much in the investment aspect so dont expect alot of returns. 2) Term: Pay for fixed period where you’re covered, pay 30 covered 30 etc, cheap and highest coverage, but ends once plan ends so if you live a long life, you won’t get anything back. 3) ILPs: Different ILPs have different purpose, some focus on insurance, some more on investment. But why it’s called ILP is most of the time bcos of the death benefit embedded in the plan. So, know the differences and see how it aligns with your short-long term goals. People will be against ILPs, but there will be people that finds it’s good for them. So do your research well

"insurance for the past 4 years" ILP typically is a life-insurance that payouts 101% to 105% of fund value which is almost worthless "some fund value" You put inside any major etf almost guarantee to get more returns, and dont have to wait 10-15 years

It’s not bad. ILP is like caifan. If you don’t know or prefer not to cook you can eat caifan. This sub has a lot of master chef. They complain about the caifan option a lot and tell everyone that they should not buy caifan but eat home cooked food. Not everyone can do that.

ILP is like tabao’ing caifan from your house downstairs to eat at MBS restaurant and paying corkage for bringing your own food in.

It’s expensive caifan for people who can’t or won’t cook. It’s not evil.

You’re missing the point… you can just eat the caifan at home without paying corkage or having xmm FA massaging your ego. If actively providing poor financial advice and causing you to be in a worse off position is not “evil”, then would you say scamming someone out of $16k is “evil”?

Hey OP, I think it is first important to understand what exactly was your intention to have this plan? \- was it for insurance or investment? \- also you mentioned that you have to pay this forever, do you mind sharing more details? \- some plans you can technically stop paying and use the account value to pay the ongoing insurance/assurance charges, as long as the account has enough returns to cover the charges then you don't have to pay anymore (you might have to top up if the account value drops and unable to pay the charges) \- some plans also come with a set payment period, e.g. pay 10 or 15 years and stop paying You could also double check the funds that your agent had selected for you previously to see if they are performing, sometimes some agents don't follow up periodically and funds that were previously performing and are not doing well now don't get switched. \- this is on the premise that you have technically paid $3K for 4 years so should have about $12K invested but only at $7.4K account value now \- even with insurance/assurance charges it should not be so far from what your total invested amount is... You also mentioned you were thinking of switching to whole life \- are the any specific reasons for you to lean towards whole life vs getting a term plan? \- like considerations for coverage in the later years etc \- because you could technically get a term plan till age 99, effectively covering you for life also \- the draw back is you must keep paying year on year (although some plans have a limited pay option) \----- If your main concern is insurance coverage and more so in the later years, I don't recommend getting a term till Age 60/65 kind and invest the rest. ***When you're in your later years, what you want is assurance that you have a payout ready, and not really hoping that your investments will "self insure" you in future*** \- if you already have an investment portfolio that is working for you then that's great, please continue to grow it well :) \- there's no harm dedicating a part of your income or funds to securing insurance for your later years Have dropped you a PM with some info, please let me know if you have any other queries. Always happy to help! :)

Ohhhhh I didn’t know buying insurance will also be able to “not lose money”?

Sorry what do you mean by buying insurance will also be able to "not lose money"? haha

idk man, my reasoning process is I paid $12k and I got back $7.4K so it’s not bad bc I paid $4+k for insurance anyways for the past few years. But by everyone’s saying so far. it seems like the money i put in shld not drop? so value should be more than $12k.

Oh!! that's what you meant! Well there are broadly two types of ILPs, Insurance ILPs and Investment ILPS Insurance ILPs focus more on protection and in the earlier years, a large chunk of the premiums paid is then given to assure the death payout \- if this is what you have, then perhaps the current value makes sense Investment ILPs focus more on investment while guranteeing 101% or 103% of total premiums paid \- basically you get your money back, and then some \- for these plans, your premiums are mostly dedicated to investment and you only need to pay the admin charges and the assurance charges along the way Apologies for not making it clear! I was under the impression it was an Investment ILP so you shouldn't have lost so much to insurance/assurance charges. \- if your death payout is way more than what you have paid then you more or less got an Insurance ILP :)

oh it’s definitely insurance ilp!!

Why your value drop instead of rise?

I believe the first few years it was paid to agent or sth lol idk

U have to check yr ilp terms. A lot of times likely 1st year only 15-20% allocated into funds and then following year 30 or so and etc. maybe 4-5th year will be full allocation

It’s usually considered a bad product because it combines life insurance with an opaque mutual fund product that has high fees. The mutual fund product erodes your personal investment returns as it has a large set of fees for management and sales distribution (aka your agent). Life insurance is also one of the more profitable products to underwrite. So it’s basically two high margin sales product combined into one and then being distributed to the financially illiterate

You put in $15k into one of the biggest bull markets, which would have returned you $24k today. So your actual loss is $16.6k. Think about that.

well now I feel bad 😭 but I’m also extremely slow to learning abt managing my own financials

No, I mean you say you don’t think it’s bad. So I have to show you the actual figures to see for yourself. Put the $3k into IBKR ACWD or VHVE, or Endowus Amundi World, or Syfe ACWD. Syfe is the most expensive at 0.65%, Endowus is 0.3%, and IBKR is practically free.

How does your ILP perform to say the SNP 500 or VWRA? You get the idea

How is the value lower than what was paid in

it’s insurance ilp! is the value supposed to go up?

You just need to go read/research how much of the premiums you pay (especially the first three years) go to the sales person. After you found out. You should ask yourself how come the insurance company is so nice to guarantee whatever amount it states on the contract, despite the massive amount of money paid as commission to the sales agent. No one can convince you. You need to be interested in the questions and want to ask the questions yourself.