Malaysia Real Estate

yowchuan · Joined: 06 Jun 2006 Posts: 15 Location: Malaysia

I have written a series of articles on how ILP works. Interested individuals might want to give it a read (it's a bit long Razz

)

Investment-Linked Insurance Policy: An Overview- Part 1
Investment-Linked Insurance Policy: How Mutual Fund Works- Part 2
Investment-Linked Insurance Policy: Premium Allocation- Part 3
Investment-Linked Insurance Policy: Insurance Charges- Final Part

Enjoy and hopefully you will find it useful!
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gavinykw · Joined: 18 Apr 2006 Posts: 107

Whats the advantage of parking my money in an investment linked policy?
My main aim is to accumulate cash sufficient to finance my kiddo"s edu in 14 years time.
Having gone thru the many forms of investment available... I thought mutual funds are quite good.
With a rm500 investment each month, i could get better returns with MF if compared to an ILP. Please comment. Thank you.
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gavinykw · Joined: 18 Apr 2006 Posts: 107

Sorry forgot this one..
Talking abut insurance, if I die or incapacitated... they can use my insurance claim for edu purpose. Bought a separate WL insurance for that.
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tengster · Joined: 19 Jan 2006 Posts: 1033

I belonged to the category that wont link insurance and investment in a jug....

Insurance for protection of your loved one......

Investment is for generating income......

Buying such policies will tie you up with committed amount for investment......

why not buy some reputable Unit Trust for investment....while sing up some good child education policies (to reduce taxes) and life policies (for loved one)......

Tat's my 2cents......I do not think investment link policy is bad but it go against my principle of dividing investment and protection.

yowchuan · Joined: 06 Jun 2006 Posts: 15 Location: Malaysia

An education fund is normally a good mix of Mutual Fund and a steady growing Endowment Plan. Depending on how much time you have left prior to your child's tertiary education and your risk profile, your allocation in Mutual Fund and Endowment would be different.

Like what tengster has pointed out, if possible, do not buy an ILP based on the projected returns that your agent shows you. There's no such thing as projected returns when it comes to investment, and surely I hope you do not bet your children's future in mere voodoo numbers. Razz

Yes, even with Mutual Fund, you should also diversify your risk between agressive and balanced portfolios just to cushion against market correction which happened in '97. Many parents who were looking forward to send their kids overseas that year end up having to squeeze them in local colleges.

Cheers,
Yow Chuan
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calvinkong · Joined: 29 Aug 2006 Posts: 3

Hi All,

I am new to this forum, would like to participate to thread.

I have something to share with you. Through my experience.

For education, i wont suggest you to get ILP, simply, because you need that kind of money for the education later on. There is very high risk of not getting the figure later on. As what our friend here yowchuan mentioned, the projected value is not guarentee. You can consider the guarentee return or at least some percentage of return (endownment plan).

Tengster had very good point here, if you would like to do Investment, you can actually seperate it (solely UT fund and Insurance Policy), don't mix it up.

ILP is for those who needs insurance coverage with fixed monthly or yearly commitment and hope that one day in future, there is some return (not expecting good return). Of course, if it is good, then you will be happy, but if not, then treat is as some saving loh.

If you are low risk taker and expect there is a return in future, then consider traditional/endownment plan insurance where by there is a little bit of growth in return (1-5%) depending the company performance. There are such policy that giving out guarentee return with certain percentage or at least guarentee capital paid. I don't want to go into that detail at this point. This policy might be expensive in long run (because the insurance fees will be difference from time to time).

If you are good in doing investment, then you can just get a term insurance whereby there is no return at all (it is much cheaper) and use the balance money to invest (of course you have to be good at it) in property, UT, business, and so on.

Feel free to comment.

Warmest Regards,
cK

gavinykw · Joined: 18 Apr 2006 Posts: 107

Hello guys. Thanks for your comments.
Another plan my prudential agent recommended, the prusaver plan. On top of my prulink + CI rider plan I could make ad hoc monthly contributions to the same plan. Thus prulink + CI rider + prusaver.
The prusaver allows me to allocate 95% of my ad hoc into the pru equity UT. How about that?
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gch · Joined: 14 Feb 2008 Posts: 2

With Prusaver, it is solely focus on the company investment in the Prulink account. but they will charge a 5% service fee. The company will buy units lots with the 95% of the premium you added and it will work like UT.

gavinykw · Joined: 18 Apr 2006 Posts: 107

hello again. I had initially thought of going into pru saver but alas taken a step backward when I got to know the unit price is at its all time high ie 2.60 from a launch at 1.00 ( some 5 years ago)
Now, why would I want to spend the same amt of money to buy less units? Anyway the agent didnt look pleased when I suddenly lost interest.

Now, should I just concentrate on new funds where the opening price are still low...
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LeoWong · Joined: 26 Mar 2008 Posts: 1 Location: Petaling Jaya

Hi guys

,
I am newbie in this forum. However, after i read those reply tat is interesting and meaningful. so pls dun mind i give some of my opinion.

Actually, i am just joining insurance field - hong leong assurance.

Some of opinion regarding education fund for children or investment, is tat investment link policy good for tat?...

For my opinion, why we want to buy an insurance? just for protection(for lover and family) and hedge our risk (protect our wealth or slightly increase our wealth with guarantee).

Thus, when people are preparing education fund for child we should to make sure 2 thing is "maintain and take risk".

1. Yourself (guarantee fund/maintain) - because you are the income provider if you are not around who are going to provide income preparing child education fund and family future. Therefore, we need a life insurance with high cash value in 15 or 20yrs. Benefits: life assure confirm your saving for child education (certain/minimum amount) + surrender value with slight higher than what the premium you have paid.

2. Efficient education fund?(not guarantee fund/take risk) - Due to inflation and our limited salary that make us hard to save a very sufficient fund for child education therefore we need some investment by using our money to generate money.
So what kind of investment we should invest? I will suggest invest in Mutual fund company like Public mutual, maybank mutual or other specialized mutual fund company. But i will not so recommend invest in investment link. you know y? Because this is not a guarantee return therefore we should seek those more specialize in this area. Like Public mutual they have their own Fund manager and their staffs to help us do research to make sure those funds have a good performance. some more, they have trustee from different company to protect investor benefit. For insurance company, investment link (mutual fund) maybe their structure are not so specialize like mutual fund company.

Therefore, it should have life insurance + investment. and this is exactly like investment link policy's purpose. However, if we have choice to diversify our portfolios maybe this a good choice?

Thanks.

Scott123 · Joined: 25 May 2008 Posts: 45

Thanks for the information , i will definitely watch your site that you have provide through the URL.
thanks

burn0004 · Joined: 14 Aug 2009 Posts: 1

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klang-valley · Joined: 11 Jun 2009 Posts: 121 Location: Petaling Jaya

There are no best plan to suit everybody. Some people don't like ILP because they are savvy enough to invest their money themselves in unit trust, stocks, property.

While others prefer to lump it together in ILP and make a single payment annually.

The most important thing is to get your insurance agent to sit down with you and listen to your requirement and concern. Then decide wisely based on the option available.
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enlightenedwealthinstitut · Joined: 22 Jul 2010 Posts: 1

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