Investment-linked plan with high distribution cost

Hi Mr. Tan

I just purchased an invesment linked plan from company X. It covers death, disability and crisis cover with terminal illness. The annual premuim is $3,000.

I want protection and saving for my retirement. I am Y yrs old and self employed with little CPF. The agent said this is the best plan out of all.

Can I take up this plan first as it is much cheaper in premium for my protection coverage and reduce it later to convert it into purely investment? The policy is now within the 14 days free look period.

REPLY

Can you find out how much of your premium is invested in the fund for the first few years, and when will 100% be invested?

I understand that the disctribution cost (to pay commission to the agent) from company X can take away 16 months of your premium. That is a lot of your savings to be taken away. You can look at this webpage, http://www.askdrmoney.com/Ins_ILP_RP.htm

I suggest that you cancel this policy immediately, i.e. within the 14 day free look period, until this matter is cleared up.