ILP policy takes away most of the premiums

Dear Mr. Tan,

I've bought an ILP policy. My premiums are $1200 per year and have paid it for two years. I has cash value of about $310 now. The sum insured is 100k. It is a yearly premium and the third one is going to be due soon.

After reading about the charges and feasibility of ILPs, I'm sceptical that I should keep this policy. Would you advise me to give it up or continue with it?

REPLY

I suggest that you ask the insurance company about the charges for the next three years, i.e. what percentage of your premium will be invested. If the charges are small, it is probably better for you to continue the policy, as you have already incurred most of the front end charges.

It is quite sad that an insurance company can take away so much of a person's savings. You should tell your family and friends to avoid this type of policy in the future.

I intend to get a new life insurance company to introduce an ILP that has no front end charge. 100% of the premium will be invested. Tentativelyly, this is called the Wealth Accumulator.

Read this FAQ:
http://www.tankinlian.com/faq/low.html