Investment Link Product - Are you ready to pay for the price?

I was going through my family insurance policy over the past few weeks and reviewing the protection structure among them including myself. I noticed there is a kind of investment link insurance which is very popular now.

My initial ideal on the policy is by paying the regular monthly premium, part of the premium will be paid for the insurance coverage while the balance is going into investment (by buying the selected unit trust). However, after going into all the details of the policies, the structure as per chart showing below...



There're few possible charges in the investment link insurance:
(1) Net Sales Charges
100% of the premiums will be used to purchase the UnitTrust (at offer price) before paying for the premium of insurance protection. By purchasing the UnitTrust (UT), an Net Sales Charges will occurs.

(2) Continuing Investment Charges
Normally about 0.1% to 2% p.a., this charges was reflected in the price difference between offer and bid price.

(3) Initial Investment Charge
Mnthly premium paid and used to purchase the UT will be impost by a certain percentage (some companies are harging about 5%), this charges was reflected in the price difference between offer and bid price.

(4) Administration Charges
Charges for your protection coverage (death, permanent and total disability, critical illness, terminal illness) which was charged on monthly basis by selling your existing UT's units (base on bid price). normally about few dollars per months.

(5) Assurance Charges
Charges for your protection coverage which was charged on monthly basis by selling your existing UT's units (base on bid price). This charges are growing rapidly (scary figure) as you get older. You can calculate it based on the rate indicated in your policy. Rates are not guarantee which mean the insurance company may increase the rate any time by giving sufficient notice period as indicated in the policy.

By selling ur existing unit to pay for charges (4) & (5), you're paying the charges (1), (2) & (3) indirectly just to get your protection apart from invesment.

While you get older, the assurance charges will get higher than your monthly premium. There are few options at that stage:
(I) Reduce sum assured to mantain the same premium
(II) Increase premium to maintain same sum assured
(III) Maintain same premium and sum assured by deducting more existing units which was purchase previously.

For options (III), your UT's units will gradually reduced to sufficient the cost of your protection (administration and assurance charges), expecially during the market trumble, value of the UTs are drop sharly which mean more unit will be deducted (you're forced to sell) and you're suffering a loss from your preious investment.

** Please correct me if my understanding are not correct.

There is an forum discussion on this issuse too...
http://sgforums.com/forums/10/topics/117370