Friday, 6 May 2016

Investment Link Plans, Buy or Bye

I personally don't like the Investment Link Products (ILP) offered by the insurance companies. I took the illustrations of benefits page and compared with my formula of compounding effects, the returns are almost the same. Perhaps the main difference is my method doesn't have the "effects of deduction" and "cost of distribution" column which will be deducted from the returns, in which means their fees and commissions in my layman terms.

Moreover, I don't think the portfolio will be maintained by those high-profile funds managers. It could be some normal staffs, or even grads with only few years of experience, maybe? There is no guaranteed one can make profits from ILP. Under worst case scenario, why let others (strangers) to lose your hard-earned money? Why not believe in yourself and start investing? More or less the same logic as what they are doing.
In my view, insurance companies are meant for insurance products. As for the investments products, I am not saying that you shouldn't buy it, but do your own homework first if you choose to buy.

Unfortunately, I have two of these kinds of policies which I had bought 10 years ago. The returns have not break-even yet, regretted buying them though, but let's moved on.

P.s. You would feel so much better if the money is lose by yourself rather than letting some strangers to lose your money. *touch wood*

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