As from April 2013 my Journey in Investing is to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

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Wednesday, 10 February 2010

Is ILP a time bomb?

Read? Insurance 'time-bomb' set to explode

One blogger said: "If you do not know what you are doing with an ILP, I guess it is a time-bomb."

Well said. But, if you really know how Single Premium ILP works? 

Do you still want to purchase Single Premium ILP from an insurance company?

Read? Shocking Discovery On My ILP

Are you really smart to let insurance company keeps selling away more units in your investment part of the Single Premium ILP to keep up with the monthly premium during the bear markets while you still have enough idle cash sitting in the bank?

DIY Your ILP If You like It So Much

You can easily DIY your ILP using decreasing Term Insurance and portfolio of unit trusts and you don't really need the insurance company to do it for you.

When you DIY, you will then have the option of using cash to pay for the monthly premium when the unit price is falling too sharply during the bear markets. In this way, you can maintain more units in your portfolio for recovery in the next bull.


  1. i never liked ILP's hence never bought one although i recognise it is popular because of its flexibility and relatively lower cost compared to traditional policies.

    buying term invest the difference works only if one is savvy, have the discipline, is not emotional & have time to do it themself. quite a tall order for many.

    it would take another 10 years to see how those ILP's purchased early this century fare when mortality charges soar when the policy holder ages towards 65

  2. ILP also have to switch the funds yourself, so it's not like you don't have to do anything. If you don't even want to do such things, then get into whole life. The latter is dependent on the investment returns of the participating fund that the insurance company invests on your behalf, so really just pay and let them invests for you.

    Actually the greatest problems come when you don't want to invest yourself (or don't know how) yet you want to get high returns, haha :) Doomed for failure

  3. Ha..uncle..

    Like i mentioned before in one of my postings, Buy Term Invest the Rest (BTIR) strategy goes down well with me intellectually.

    Emotionally and practically, I don't really know how to implement it though.

    Let's say I need an average of $400K coverage, it means I would be spending around $60 to $70 per month on term insurance.

    I am not sure how to invest the remaining hundred dollars or so.. Use Philips SBP? But only can be exposed to Singapore stocks. Use Fundsupermart...will I keep buying if the stock price goes down.

    I am not too disciplined so I prefer to keep it automated. But that's just me =) I am sure other people have implemented the BTIR strategy pretty well. It just doesn't suit me at the moment so I stick to ILP.


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