Question: Wilfred, my financial adviser sold me a product called X and he told me that the insurance charges are constant throughout my entire life. My premium is $1,200 a year. However, I read in the forum that such ILPs’ insurance charges increase with age. I am confused, can you advise me how much will I be paying when I am say at 80 years old? I am a male and non-smoker.

Answer:

The relevant parameters from your policy are as follows:

Basic policy: $200,000 covering death, Terminal Illness (TI) and Total and Permanent Disability (TPD). Upon death, TI or TPD, the payout is $200,000 plus market value of the underlying unit trust.

Cost of Insurance (COI) of basic policy chosen: Yearly Renewal Term (YRT)

Rider:  $200,000 covering Critical illness accelerator.

Calculation as follows:

The monthly mortality charges covering death and TI at age 80 is $4.253 per $1,000 ...