Uneasy about two insurance products

Mr. Tan,
As I read your blog, I began to feel very uneasy about the two products that I purchased recently. I hope that you could advice me, because I feel apprehensive of what insurance agents are telling me now.

Recently, because of the low fixed desposit interest rate, we invested our hard-earned savings of $40K in a unit trust (100% on GROWTH combined fund). We were also advised by the agent to purchase a life insurance plan VIVOLIFE for my son.

I like your advice on the following:-
a) Is it really necessary for me to insure my son now? Does he needs it anyway?
b) Is the unit trust considered as an "Investment linked policy"?

REPLY
I usually advice parents not to take life insurance for their child. It is not needed. It is better for a parent to save for a child in a low cost investment fund. This is described in the following FAQ:
http://www.tankinlian.com/faq/child.html

Your investment in the Growth Combined Fund is made through a single premium policy, i.e. the Flexi-Link. The upfront charge is 3%. The annual charge is about 1%. I think that these charges are all right. An alternative is for you to invest in the STI ETF (StateStreet Trakker fund), where the upfront and annual charge is 0.3%.

The Flexi Link is an ILP. However, as it is a single premium, the charge is acceptable. You should avoid the regular premium ILP, where the charges are very high.

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

I hope that they help you to make the right decisions.