Facts to note before investing in investment linked policy (ILP)

An Investment-related policy (ILP) is a hybrids product with two different elements insurance and unit trust funds. ILPs, especially in the 20s and early 30s, are very cost-effective. They are popular because you can combine and match various types of insurance to provide your best insurance policy with a lump sum for death, disability, illness, accidents, and hospitalization. For all the combination of insurance check out this guide.

Your premium is fixed, but there is no charge:

ILP policyholders are aware of premium adjustments. However, many of them do not know that the actual insurance costs are fixed. For more information about ILP insurance cost  check out this guide. The actual cost of your insurance is low. In this way, your mutual fund will receive most of the premiums. We hope that its value will increase over time. Now, He is 50 years old, and 30 years later. Your insurance costs are higher than your standard ILP premium.

How to make up for the deficit?

It is deducted from the current investment value of the mutual fund. In this way, even if your actual insurance costs increase, you can retain the standard ILP premiums.

What if you have used up the trust funds of all business units? Non-performing investments in the escrow unit or a significant increase in insurance costs may deplete your entire investment value. If the insurance company agrees to pay extra, everything will be fine. ILP is still valid. ILP will be discontinued,

Minimum Allocation Ratio (MAR):

The BNM that changes the IDA ILP on July 1, 2019, will be classified as reserved and non-exclusive. The minimum rate for deducting insurance premiums or MAR from ILP premiums is before July 1, 2019: BNM MAR applicable to BNP is on July 1, 2019. Your ILP rewards classify as reserved and non-exclusive. Therefore, ILPs purchased after July 1, 2019, are more expensive than previous ILPs.

Payment verification options:

If you purchased ILP before July 1, 2019, you may have two options to confirmed or add complex illness, health insurance, or accident insurance.

Option 1 You can buy a new ILP, but the change of PNM will increase its price.

Option 2 The amount confirmed in your existing ILP may increase. It may be cheaper because the new BNM MAR is an additional cost to you. Compare the two best options and find the one that suits you best.

How to get the lowest premium?

The insurance agent provides you with a quotation for the software. It is the best insurance contract. Your broker provides you with ILP guaranteed monthly premiums of SGD 250 and SGD 250,000. There are two ways to obtain revenue:

Option 1 Get a guaranteed SGD300,000 from your agent. The monthly software fee of SGD150 can still generate premiums, but the margin increased to SGD 300,000. In this case, if the software cannot charge a fee, the maximum is SGD 350,000 or higher. The program does not provide an offer of 350,000 SGDs. We can say. Reduce until you find a comfortable person, SGD 345,000 and SGD 340,000. You may receive more confirmation letters than the scheduled SGD 250,000.

Option 2 If your agent requires SGD 250,000, please select this option. Get a monthly agent premium discount of up to SGD 120. If the software is not priced, please increase the monthly fee to SGD 130 and SGD 140. We can say that you can get an insurance policy every month for 130 SGDs. It is 13% of the initial premium, saving SGD 20 per month.