2. FLEXIBLE
Next key element of ILP is Flexibility, we will highlight a few points that contribute to flexibility of an ILP. We know that Insurance Needs change with time. When you are single, when you are married, when you have new financial commitment, when you retire, when you hit a jackpot, when you move from employment to owning a business and many more. Therefore, flexibility is always an advantage.
Flexibility to REMOVE/ADD* rider(s) when Insurance Needs Change.
When planning to purchase of an ILP, you can decide what riders you want to add to the plan and what is not needed. When you find that you no longer need the protection, you can choose to drop the riders and vice versa.
Flexibility to REDUCE/INCREASE* Sum Assured
It is also true when you want to reduce or increase sum assured.
Why do we highlight on the addition of rider and increment of Sum Assured? With our experience, we note that this seldom happens. In order for you to make addition of rider or increment of sum assured you will need to be in good health condition and need to get additional approval from insurer. Besides, products keep improving from time to time, most of the time client would like to have the whole package in the latest products with enhanced features.
Premium Holiday
ILP also provides option for premium holiday without lapsing the policy when we are facing short term financial difficulty. As long as the value in our account is sufficient, the policy will continue to be effective (in-forced). In traditional insurance plan, when a non-payment of premium takes place, it will trigger automatic premium loan (APL). During APL, it will utilise cash value to pay the premium and interest will be charged accordingly. With ILP, no additional interest will be charged to policy holders.
WITHDRAWAL of Account Value when in need of Cash
This works in the same manner as Premium Holiday discussed above. As long as the balance is enough to cover current Cost of Insurance and a specified minimum balance, you can withdraw the remaining of your cash value from the account.
However, it is extremely important to know that any of these will affect the sustainability of your policy. The ILP may not last as you initially intended. When policy holder withdraw cash and coupled with premium holiday, your policy may lapse in next 2 or 3 months.