[caption id="attachment_3174" align="alignright" width="150" caption="Photo by striatic"][/caption]
Investment-linked products beneficial in the long term
I REFER to last Saturday's Forum Online letter by Mr Larry Haverkamp, 'Cheaper to invest in unit trust than regular-premium investment-linked products'.
It is true that all front-end loaded investment-linked products (ILPs) will invest only a small percentage of premiums paid in the initial years of the policy.
But it is also true that some ILPs do invest more of the premiums paid over the years, even exceeding the premiums paid in later years.
Mr Haverkamp focused all attention on the ILP charges, as well as the single benefit of investing in unit trusts, that is, incurring much lower charges.
But he failed to mention or realise the valuable insurance benefit the plan provides, which is the other reason why ILPs are an attractive product, as opposed to buying a standalone term policy and investing in unit trusts.