Misconceptions of Investment-Linked Plans (ILP)

Investors who are more senior in age may naturally think that buying an Investment-Linked Plan (ILP) is not worthwhile, as a larger portion of the premium(s) and/or subsequent fund earnings would be used towards the insurance coverage.

Facts for investors: Beyond the usual 5% premium charge, there are ILPs available that provide insurance coverage at no extra cost. This allows investors to maximise their investment potential while benefiting from insurance coverage. For some ILPs, the Death / Terminal Illness Benefit (before reaching 99 years of age), is the higher of 101% to 105% of the Total Premiums or the Policy Value. Furthermore, some ILPs offer an Accidental Death Benefit for policy holders. This means investors are protected against downside losses in the event of death or terminal illness, while still benefiting from the potential upsides of their investments. Insurers may also offer Start-up Bonuses for regular premium ILPs, which can help offset the premium charges.

Disclaimers:

This blog is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the products mentioned. Investments in investment-linked plans (ILP) are subject to investment risks including the possible loss of the principal amount invested. The value of the units and the income from them may fall as well as rise. Past performance is not indicative of future results. This publication has not been reviewed by the Monetary Authority of Singapore. The information provided on this blog page is accurate as of the date of posting.